<PAGE>
As filed with the Securities and Exchange Commission on May 26, 2000
Registration No. 33-64881
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SECURITIES AND EXCHANGE COMMISION
WASHINGTON, D.C. 20549
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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
----------------------
A. Exact Name of Trust:
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
B. Name of depositor:
PRUDENTIAL SECURITIES INCORPORATED
C. Complete address of depositor's principal executive office:
One Seaport Plaza
199 Water Street
New York, New York 10292
D. Name and complete address of agent for service:
Copy to:
LEE B. SPENCER, JR., ESQ. KENNETH W. ORCE, ESQ.
PRUDENTIAL SECURITIES INCORPORATED CAHILL GORDON & REINDEL
One Seaport Plaza 80 Pine Street
199 Water Street New York, New York 10005
New York, New York 10292
It is proposed that this filing will become effective (check appropriate box).
__
/__/ immediately upon filing on (date) pursuant to paragraph (b);
__
/X_/ on May 31, 2000 pursuant to paragraph (b);
__
/__/ 60 days after filing pursuant to paragraph (a);
__
/__/ on (date) pursuant to paragraph (a) of Rule 485.
<PAGE>
CUSIP: 383741881R
Government Securities Equity Trust Series 9
(LOGO)
- --------------------------------------------------------------------------------
The objectives of the Trust are to attempt to obtain safety of capital through
investment in stripped United States Treasury issued notes or bonds paying no
current interest and to attempt to provide for capital appreciation through
investment in Class A shares of the Alliance Technology Fund, Inc., an open-end,
diversified, registered management investment company.
The investment objective of the Alliance Technology Fund (the 'Fund') is growth
of capital. Current income is only an incidental consideration. The Fund may
seek income by writing listed call options. The Fund invests primarily in
securities of companies expected to benefit from technological advances and
improvements (i.e., companies that use technology extensively in the development
of new or improved products or processes). The Fund will normally have at least
80% of its assets invested in the securities of these companies. The Fund
normally will have substantially all its assets invested in equity securities,
but it also invests in debt securities offering an opportunity for price
appreciation. The Fund will invest in listed and unlisted securities, in U.S.
securities and up to 10% of its total assets in foreign securities. The Fund's
policy is to invest in any company and industry and in any type of security with
potential for capital appreciation. It invests in well-known and established
companies and in new and unseasoned companies. The Fund may also (i) write and
purchase exchange-listed call options and purchase listed put options, including
exchange-traded index put options; (ii) invest up to 10% of its total assets in
warrants; and (iii) make loans of portfolio securities of up to 30% of its total
assets. There can be no assurance that the Fund or the Trust will achieve its
objectives. Units of the Trust may be suited for purchase by Individual
Retirement Accounts, Keogh Plans and other tax-deferred retirement plans.
- --------------------------------------------------------------------------------
Sponsor:
Prudential Securities (LOGO)
- --------------------------------------------------------------------------------
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.
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Please read and retain Prospectus dated
this Prospectus for future reference May 31, 2000
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[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
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This Prospectus does not contain all the information with respect to the
investment company set forth in its registration and exhibits relating thereto
which have been filed with the Securities and Exchange Commission, Washington,
D.C. under the Securities Act of 1933 and the Investment Company Act of 1940,
and to which reference is hereby made.
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The Trust
Government Securities Equity Trust Series 9 consists of one underlying unit
investment trust (the 'Trust' or 'GSET' as the context requires) composed of
stripped United States Treasury issued notes or bonds bearing no current
interest (the 'Treasury Obligations') and shares of Class A common stock ('Fund
Shares') of the Alliance Technology Fund, Inc. (the 'Fund'), an open-end,
diversified, registered management investment company, or contracts and funds
for the purchase thereof (the Treasury Obligations and the Fund Shares,
collectively, the 'Securities'). The Trust contains Treasury Obligations
maturing in approximately 6 years and Fund Shares.
The objectives of the Trust are to attempt to obtain safety of capital
through investment in stripped United States Treasury issued notes or bonds
paying no current interest and to attempt to provide for capital appreciation
through investment in shares of the Fund. The investment objective of the Fund
is growth of capital. There is, of course, no assurance that the objectives of
the Fund or the Trust will be achieved.
The Trust is structured to contain a sufficient amount of Treasury
Obligations to insure that an investor will receive, at the maturity of such
Trust, $15.00 per Unit. However, an investor holding his Units to Trust maturity
may suffer a loss to the extent the investor's purchase cost of a Unit exceeds
$15.00 since the capital protection is limited to the aggregate maturity value
per Unit of Treasury Obligations. An investor who sells his Units prior to Trust
maturity may suffer a loss to the extent that the price he receives upon the
sale of his units is less than the purchase price of his Units. The price paid
for a Unit may differ from that set forth herein due to changes in the value of
the Securities in the portfolio. There is no assurance that a purchaser of Units
on the date of the Prospectus or subsequent to such date will receive, upon
termination, the purchase price per Unit. The Fund has not been structured to
generate dividends and therefore dividend distributions by the Trust are likely
to be insignificant. The maximization of dividend income is not an objective of
the Trust. The Trust is 'concentrated' in Fund Shares, so investors should be
aware that the potential for capital appreciation is directly related to the
investment performance of the Fund itself.
Subsequent to the Date of Deposit the Sponsor may, from time to time,
deposit additional Treasury Obligations and Fund Shares in the Trust while
maintaining the proportionate relationship between the maturity amount of the
Treasury Obligations and the number of Fund Shares immediately prior to such
deposit. Any additional Treasury Obligations added to the Trust will be United
States Treasury notes or bonds substantially identical to those then held in the
Trust.
The Fund
The Fund emphasizes growth of capital and invests for capital appreciation.
Current income is an incidental consideration. The Fund may seek to earn income
by writing listed call options. The Fund invests primarily in securities of
companies that are expected to benefit from technological advances and
improvements (i.e., companies that use technology extensively in the development
of new or improved products or processes). The Fund will normally have at least
80% of its assets invested in the securities of these companies. There can be,
of course, no assurance that the Fund's investment objective will be achieved,
and the nature of the Fund's investment objective and policies may involve a
somewhat greater degree of risk than would be present in a more conservative
approach. See 'The Trust--Fund Risk Factors' in Part B.
The Fund will normally have substantially all of its assets invested in
equity securities (common stocks or securities convertible into common stocks or
rights or warrants to subscribe for or purchase common stocks). The Fund at
times may also invest in debt securities and preferred stocks offering an
opportunity for price appreciation (e.g., convertible debt securities).
The Fund will invest in listed and unlisted securities, in U.S. securities
and up to 10% of its total assets in foreign securities.
The Fund's policy is to invest in any company and industry and in any type
of security with potential for capital appreciation. It invests in well-known
and established companies and in new and unseasoned companies.
A-i
<PAGE>
Critical factors that will be considered in the selection of securities will
include the economic and political outlook, the value of individual securities
relative to other investment alternatives, trends in the determinants of
corporate profits, and management capability and practices. Generally speaking,
disposal of a security will be based upon factors such as (i) actual or
potential deterioration of the issuer's earning power which the Fund believes
may adversely affect the price of its securities, (ii) increases in the price
level of the security or of securities generally which the Fund believes are not
fully warranted by the issuer's earning power, and (iii) changes in the relative
opportunities offered by various securities.
Companies in which the Fund will invest include those whose processes,
products or services are anticipated by Alliance Capital Management L.P., the
Fund's investment adviser (the 'Investment Adviser'), to be significantly
benefited by the utilization or commercial application of scientific discoveries
or developments in such fields as, for example, aerospace, aerodynamics,
astrophysics, biochemistry, chemistry, communications, computers, conservation,
electricity, electronics (including radio, television and other media), energy
(including development, production and service activities), geology, health
care, mechanical engineering, medicine, metallurgy, nuclear physics,
oceanography and plant physiology.
The Fund will endeavor to invest in companies where the expected benefits to
be derived from the utilization of technology will significantly enhance the
prospects of the company as a whole (including, in the case of a conglomerate,
affiliated companies). The Fund's investment objective permits the Fund to seek
securities having potential for capital appreciation in a variety of industries.
Certain of the companies in which the Fund invests may allocate greater than
usual amounts to research and product development. The securities of such
companies may experience above-average price movements associated with the
perceived prospects of success of the research and development programs. In
addition, companies in which the Fund invests could be adversely affected by
lack of commercial acceptance of a new product or products or by technological
change and obsolescence.
Except as otherwise indicated, the investment policies of the Fund are not
'fundamental policies' and may be changed by the Board of Directors without a
Fund shareholder vote. However, the Fund will not change its investment policies
without written notice to its shareholders. The Fund's investment objective, as
well as the Fund's 80% investment policy, may not be changed without shareholder
approval.
Investment Risks
Investors should be aware of the risks which an investment in Units of the
Trust may entail. During the life of the Trust, the value of the portfolio
Securities and hence the Units will fluctuate and therefore the Public Offering
Price and Redemption Price per Unit may be more or less than the price paid by
the investor.
The value of the Treasury Obligations will fluctuate inversely with change
in interest rates and the value of Fund Shares will vary as the value of the
underlying portfolio securities of the Fund increases or decreases. See 'The
Trust--Fund Risk Factors' in Part B. The Treasury Obligations are subject to
substantially greater price fluctuations during periods of changing interest
rates than securities of comparable quality which make periodic interest
payments. See 'The Trust--Stripped U.S. Treasury Obligations.'
Among the principal risks of the Fund is market risk, which is the risk of
losses from adverse changes in the stock market. Because the Fund invests
primarily in technology companies, factors affecting these companies could have
a significant effect on the Fund's net asset value. In addition, the Fund's
investments in technology stocks, especially those of smaller, less-seasoned
companies, tend to be more volatile than other companies. To the extent the Fund
invests in debt and foreign securities, your investment has interest rate risk,
credit risk, foreign risk and currency risk. See 'The Trust--General Information
Regarding the Fund--Additional Investment Policies and Practices--Fundamental
Investment Policies.' FOR ADDITIONAL RISK FACTORS RELATING TO INVESTMENT IN THE
FUND, SEE PART B OF THIS PROSPECTUS.
Although the Trust is structured to return to an initial Unit Holder his
purchase cost of a Unit through the distribution of the Treasury Obligations'
maturity value on the mandatory termination date of the Trust, an investor will
have included the accrual of original issue discount on such Treasury
Obligations in income for federal income tax purposes and will have paid federal
income tax on such accrual. An investor holding his Units to Trust maturity may
suffer a loss to the extent the investor's purchase cost of a Unit exceeds
$15.00 since the capital protection is limited to the aggregate maturity value
per Unit of Treasury Obligations. Similarly, an investor who sells his Units
prior to Trust
A-ii
<PAGE>
maturity may suffer a loss to the extent that the price he receives upon the
sale of his Units is less than the purchase price of his Units.
Distributions
Distributions, if any, of dividends, 12b-1 fee amounts received by the Trust
from the Sponsor in respect of Fund Shares (net of Trust expenses),
distributions of any net capital gains and net investment income received in
respect of Fund Shares, and proceeds of the sale of Fund Shares not used to
redeem Units will be made quarterly on or shortly after the Quarterly
Distribution Date to Unit Holders of record on the Quarterly Record Date
immediately preceding such Quarterly Distribution Date. No distribution will be
made if the amount available for distribution is less than $2.50 per 100 Units
(see 'Rights of Unit Holders--Distributions'). Alternatively, Unit Holders may
have their distributions reinvested by purchasing Fund Shares directly from the
Fund at net asset value (see 'Reinvestment of Trust Distributions'). Accrual of
original issue discount on the Treasury Obligations will not be distributed on a
current basis, although Unit Holders will be subject to income tax at ordinary
income rates as if a current distribution of such amounts had been made (see
'Tax Status of the Trust'). Upon termination of the Trust, the Trustee will
distribute, upon surrender of Units for cancellation, to each Unit Holder, his
pro rata share of such Trust's net assets including the proceeds of Fund Shares
sold unless a Unit Holder elects to receive Fund Shares pursuant to an 'in kind'
distribution of the number of Fund Shares attributable to his Units, in the
manner set forth under 'Amendment and Termination of the
Indenture--Termination.' Upon termination, a Unit Holder may invest the proceeds
from the Treasury Obligations in Fund Shares by purchasing Fund Shares directly
from the Fund at net asset value.
Public Offering Price
The Public Offering Price of the Units during the initial offering period is
equal to the aggregate offering side evaluation of the underlying Treasury
Obligations and the net asset value of the Fund Shares (excluding any sales
charge), divided by the number of Units outstanding plus the sales charge equal
to 5.00% of the Public Offering Price (5.263% of the net amount invested) per
Unit. (See Part B--'Public Offering of Units--Public Offering Price.') After the
initial public offering period, the Public Offering Price of the Units is
computed by adding to the aggregate bid side evaluation of the Treasury
Obligations the aggregate net asset value of Fund Shares in the Trust, dividing
such sum by the number of Units outstanding and then adding a sales charge of
5.00% of the Public Offering Price (5.263% of the net amount invested). Any
money in the Income and Principal Accounts other than money required to redeem
tendered Units will be added to the Public Offering Price. The sales charge is
reduced on a graduated scale for sales involving at least $100,000 (see 'Public
Offering of Units--Volume Discount'). The minimum purchase is 100 Units except
the minimum purchase is 25 Units in the case of Individual Retirement Accounts,
Keogh Plans and other tax-deferred retirement plans.
Secondary Market
The Sponsor, although not obligated to do so, presently intends to maintain
a secondary market to repurchase the Units based on the aggregate bid side
evaluation of the Treasury Obligations and the net asset value of the Fund
Shares. If such market is not maintained, a Unit Holder will be able to dispose
of his Units through redemption at prices based on the aggregate bid side
evaluation of the Treasury Obligations and the net asset value of the Fund
Shares (see 'Rights of Unit Holders--Redemption'). Market conditions may cause
such prices to be greater or less than the amount paid for Units and may result
in a loss to a Unit Holder upon the disposition of a Unit.
Special Risk Considerations
An investment in Units of the Trust should be made with an understanding of
the risks entailed in an investment in (i) the stripped United States Treasury
issued notes or bonds bearing no current interest (see 'The Trust--Stripped U.S.
Treasury Obligations' on page B-2) and (ii) a mutual fund which invests in the
type of securities in which the Fund invests (see 'The Trust--Additional
Investment Policies and Practices' and 'The Trust--Fund Risk Factors' in Part
B). The Trust's objectives are to attempt to obtain safety of capital through
investment in the stripped United States Treasury issued notes or bonds paying
no current interest and to attempt to provide for capital appreciation through
an investment in Fund Shares. The Trust is 'concentrated' in Fund Shares so
investors should be aware that the potential for capital appreciation is
directly related to the investment performance of the Fund itself. Additionally,
changes in the price of the Treasury Obligations and changes in the net asset
value of the Fund Shares will affect the price of the Trust's Units.
A-iii
<PAGE>
Portfolio Summary
$24,000,000 face amount of Treasury Obligations maturing on August 15, 2010
and 207,286 Fund Shares were held in the Trust on May 2, 2000. The Treasury
Obligations and the Fund Shares represented 29.2% and 70.8%, respectively, of
the total of the aggregate bid side evaluation of Treasury Obligations and the
aggregate value of Fund Shares in the Trust on May 2, 2000.
A-iv
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
As of May 2, 2000
<TABLE>
<S> <C>
AGGREGATE MATURITY VALUE OF TREASURY OBLIGATIONS........................................... $24,000,000.00
AGGREGATE NUMBER OF FUND SHARES............................................................ 207,286
NUMBER OF UNITS............................................................................ 1,600,000
FRACTIONAL UNDIVIDED INTEREST IN THE TRUST REPRESENTED BY EACH UNIT........................ 1/1,600,000th
Aggregate offering side evaluation of Treasury Obligations in the Trust.................. $12,344,160.00
Aggregate value of Fund Shares(2)........................................................ 29,892,714.06
Cash value............................................................................... (924,087.32)
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Aggregate value of Securities in the Trust............................................... 41,312,786.74
Divided by 1,600,000 Units............................................................... $ 25.82
Plus sales charge of 5.00% of Public Offering Price (5.263% of net amount invested)(4)... $ 1.36
--------------
Public Offering Price per Unit(3)........................................................ $ 27.18
--------------
--------------
REDEMPTION AND SPONSOR'S SECONDARY MARKET REPURCHASE PRICE PER UNIT(6) (based on the bid
side evaluation underlying Treasury Obligations and net asset value of the Fund Shares,
$1.36 less than the Public Offering Price per Unit)(2)................................... $ 25.82
QUARTERLY RECORD DATES: February 1, May 1, August 1, November 1
QUARTERLY DISTRIBUTION DATES: February 15, May 15, August 15, November 15, or as soon
thereafter as possible.
MINIMUM PRINCIPAL DISTRIBUTION: No distribution need be made from the Principal Account if
the balance therein is less than $2.50 per 100 Units.
TRUSTEE'S ANNUAL FEE AND ESTIMATED EXPENSES (including Evaluator's fee) $1.67 per 100
Units(5).
ORGANIZATIONAL EXPENSES: $1.91 per 100 Units(7).
EVALUATOR'S FEE FOR EACH EVALUATION OF TREASURY OBLIGATIONS: $5.00
EVALUATION TIME: 4:00 P.M. New York Time or close of regular trading on the New York Stock
Exchange
MANDATORY TERMINATION DATE: August 15, 2010(6).
MINIMUM VALUE OF TRUST: The Indenture may be terminated if the value of Trust is less than
$21,300,000
DATE OF DEPOSIT; February 6, 1996(1)
</TABLE>
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(1) The Date of Deposit is the date on which the Trust Indenture and
Agreement was signed and the initial deposit of Securities with the
Trustee was made.
(2) Calculated by multiplying aggregate Fund Shares by the current net asset
value per share (excluding any sales load on the Fund Shares).
(3) This price is computed as of May 2, 2000 and may vary from the Public
Offering Price on the date of this Prospectus or any subsequent date.
(4) Certain transactions are entitled to a reduced Sales Charge. (See
'Public Offering of Units--Volume Discount.')
(5) See: 'Expenses and Charges' herein. The fee and the organizational costs
accrue quarterly and are payable on each Distribution Date. Estimated
distributions from the Fund on the Fund Shares are expected by the
Sponsor to be sufficient to pay the estimated expenses of the Trust.
(6) The Trust may be terminated prior to the Termination Date. See Part
B--'Amendment and Termination of the Indenture--Termination.'
(7) See Fee Table and Part B--'Expenses and Charges--Expenses.'
For an explanation of the management fees paid by the Fund (approximately
1.00% on an annual basis of the Fund average net assets), see pages B-11 and
B-12.
A-v
<PAGE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
THE UNIT HOLDERS, SPONSOR AND TRUSTEE
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
We have audited the statement of financial condition, including the schedule
of portfolio securities, of the Government Securities Equity Trust Series 9
as of January 31, 2000 and the related statements of operations and changes
in net assets for each of the three years in the period then ended. These
financial statements are the responsibility of the Trustee (see Footnote
(a)(1)). Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 the
securities owned as of January 31, 2000 by correspondence with The Chase
Manhattan Bank, the Trustee. An audit also includes assessing the
accounting principles used and the significant estimates made by the
Trustee, 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 financial statements referred to above present fairly,
in all material respects, the financial position of the Government
Securities Equity Trust Series 9 as of January 31, 2000, and the results of
its operations and the changes in its net assets for each of the three years
in the period then ended in accordance with accounting principles generally
accepted in the United States of America.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
New York, New York
May 12, 2000
A-1
</AUDIT-REPORT>
<PAGE>
STATEMENT OF FINANCIAL CONDITION
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
January 31, 2000
TRUST PROPERTY
<TABLE>
<S> <C>
Investments in Securities at market value (amortized cost $22,572,956
including accretion of $4,574,237) (Note (a) and Schedule of
Portfolio Securities Notes (4) and (5)) $40,093,638
Other receivable 22,594
Deferred organization costs 15,284
Capital gain distribution receivable 941,637
Cash 181,798
Total 41,254,951
LIABILITIES AND NET ASSETS
Less Liabilities:
Organization costs payable 46,009
Accrued Trust fees and expenses 3,747
Redemptions payable 1,159,500
Total liabilities 1,209,256
Net Assets:
Balance applicable to 1,700,000 Units of fractional
undivided interest outstanding (Note (c)):
Capital, plus net unrealized market appreciation
of $17,520,682 $40,093,638
Excess distributed principal and net investment income
(Note (b)) (47,943)
Net assets $40,045,695
Net asset value per Unit ($40,045,695 divided by 1,700,000 Units) $ 23.5563
</TABLE>
See notes to financial statements
A-2
<PAGE>
STATEMENTS OF OPERATIONS
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
<TABLE>
<CAPTION>
For the years ended January 31,
2000 1999 1998
<S> <C> <C> <C>
Investment income:
Interest $ 950,770 $ 1,148,944 $1,420,087
Other income 59,865 52,052 64,806
Total income 1,010,635 1,200,996 1,484,893
Less expenses:
Amortization of organization costs 15,284 15,284 18,573
Trust fees and expenses 26,540 33,319 35,564
Total expenses 41,824 48,603 54,137
Investment income - net 968,811 1,152,393 1,430,756
Net gain on investments:
Capital gain distributions
received 941,637 1,457,511 239,869
Realized gain on securities sold or redeemed 2,910,214 3,309,265 1,156,965
Unrealized market appreciation 3,155,707 8,335,788 2,447,946
Net gain on investments 7,007,558 13,102,564 3,844,780
Net increase in net assets resulting from
operations $7,976,369 $14,254,957 $5,275,536
</TABLE>
See notes to financial statements
A-3
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
<TABLE>
<CAPTION>
For the years ended January 31,
2000 1999 1998
<S> <C> <C> <C>
Operations:
Investment income - net $ 968,811 $ 1,152,393 $ 1,430,756
Capital gain distributions
received 941,637 1,457,511 239,869
Realized gain on securities sold or
redeemed 2,910,214 3,309,265 1,156,965
Unrealized market appreciation 3,155,707 8,335,788 2,447,946
Net increase in net assets
resulting from operations 7,976,369 14,254,957 5,275,536
Less Distributions to Unit Holders:
Principal (968,400) (1,429,750) (217,984)
Investment income - net - - (6,557)
Total distributions (968,400) (1,429,750) (224,541)
Capital Share Transactions:
Redemption of 400,000 Units, 950,000
Units and 500,000 Units, respectively (7,928,899) (15,003,541) (7,086,278)
Net investment loss(income distribution)
on redemption 546 (2,128) (1,557)
Net capital share transactions (7,928,353) (15,005,669) (7,087,835)
Net decrease in net assets (920,384) (2,180,462) (2,036,840)
Net assets:
Beginning of year 40,966,079 43,146,541 45,183,381
End of year (including (excess distributed)
undistributed principal and net investment
income of $(1,934), $(72,623) and $4,994,
respectively) $40,045,695 $40,966,079 $43,146,541
</TABLE>
See notes to financial statements
A-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
January 31, 2000
(a) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of the significant
accounting policies of the Trust:
(1) Basis of Presentation
The Trustee has custody of and responsibility for all accounting
and financial books, records, financial statements and related data
of the Trust and is responsible for establishing and maintaining a
system of internal controls directly related to, and designed to
provide reasonable assurance as to the integrity and reliability
of, financial reporting of the Trust. The Trustee is also
responsible for all estimates and accruals reflected in the Trust's
financial statements. The Evaluator determines the price for each
underlying Security included in the Trust's Schedule of Portfolio
Securities on the basis set forth in Part B of this Prospectus,
"Public Offering of Units - Public Offering Price". Under the
Securities Act of 1933 ("the Act"), as amended, the Sponsor is
deemed to be an issuer of the Trust Units. As such, the Sponsor
has the responsibility of an issuer under the Act with respect to
financial statements of the Trust included in the Registration
Statement under the Act and amendments thereto.
(2) Investments
Investments are stated at market value as determined by the
Evaluator based on the bid side evaluations of the Zero Coupon
Treasury Obligations, and by calculations based on the net asset
value per share of the mutual fund, on the last day of trading
during the period. The value on the date of initial deposit
(February 6, 1996) represents the cost of investments to the Trust
based on the offering side evaluations and the net asset value per
share, of the Treasury Obligations and mutual fund shares,
respectively, as of the close of business on the date of initial
deposit. The cost of investments purchased subsequent to the date
of initial deposit is based on the offering side evaluations and
the net asset value per share, respectively, at the date of
purchase. The difference between the initial cost and face amount
of the Treasury Obligations at the date of purchase is being
amortized over the period of its maturity date using the interest
method.
(3) Income Taxes
The Trust is not an association taxable as a corporation for
Federal income tax purposes; accordingly, no provision is required
for such taxes.
(4) Expenses
The Trust pays an annual Trustee's fee, estimated expenses,
Evaluator's fees, and an annual Sponsor's portfolio supervision
fee, and may incur additional charges as explained under "Expenses
and Charges" in Part B of this Prospectus. A portion of the
Trust's organizational costs will be paid by the Trust and is being
amortized over a period of five years.
A-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
January 31, 2000
(b) DISTRIBUTIONS
Distributions from the income and principal accounts, if any, received
by the Trust are made to Unit Holders on a quarterly basis and
distributions of any net capital gains received in respect of the mutual
fund shares will be made at least annually to Unit Holders of record.
Income from the amortization of original issue discount on the Zero
Coupon Treasury Obligations will not be distributed on a current basis.
Upon termination of the Trust, the Trustee will distribute, upon
surrender of Units for cancellation, to each Unit Holder his pro rata
share of the Trust's assets, less expenses, in the manner set forth
under "Amendment and Termination of the Trust - Termination" herein.
(c) COST TO INVESTORS
The cost to investors represents the aggregate initial public offering
price as of the respective dates of deposit exclusive of accrued
interest.
A reconciliation of the cost of Units to investors to the net amount
applicable to investors as of January 31, 2000 follows:
<TABLE>
<C> <S>
Cost to investors at dates of deposit $42,346,005
Less: Gross underwriting commissions (sales charge) (2,117,239)
Net cost to investors 40,228,766
Cost of securities sold or redeemed, including
interest accretion of $348,157, net of
deferred sales charges (22,578,204)
Net unrealized market appreciation 17,520,682
Accumulated interest accretion 4,922,394
Net amount applicable to investors $40,093,638
</TABLE>
(d) OTHER INFORMATION
Selected data for a Unit of the Trust during each year:
<TABLE>
<CAPTION>
For the years ended January 31,
2000 1999 1998
<S> <C> <C> <C>
Principal distributions during year $ .5380 $ .6650 $ .0715
Net investment income distribu-
tions during year $ - $ - $ .0022
Net asset value at end of year $23.5563 $19.5077 $14.1512
Trust Units outstanding at end
of year 1,700,000 2,100,000 3,050,000
</TABLE>
A-6
<PAGE>
SCHEDULE OF PORTFOLIO SECURITIES
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
January 31, 2000
<TABLE>
<CAPTION>
Port-
folio Name of Issuer/ Face Amount/ Market Value
No. Title of Portfolio Security <F1> Number of Shares <F4><F5>
<C> <S> <C> <C>
1. Stripped United States Treasury Obligations maturing
on August 15, 2010 <F2> $25,500,000 $12,625,305
2. Class A shares of the Alliance Technology Fund, Inc.
($124.72 per Fund Share) <F3> 220,240 27,468,333
$40,093,638
</TABLE>
See notes to schedule of portfolio securities
A-7
<PAGE>
NOTES TO SCHEDULE OF PORTFOLIO SECURITIES
GOVERNMENT SECURITIES EQUITY TRUST SERIES 9
January 31, 2000
<F1> None of the Securities is redeemable by operation of optional call
provisions.
<F2> The Zero Coupon Treasury Obligations have been purchased at a
discount from their par value because there is no stated interest
income thereon (such Securities are often referred to as zero
coupon securities). Over the life of the Treasury Obligations such
discount accrues and upon maturity thereof the holders will receive
100% of the Treasury Obligation maturity amount thereof.
<F3> The Fund's investment advisor is Alliance Capital Management L.P.
<F4> The market value of the Treasury Obligations as of January 31, 2000
was determined by the Evaluator on the basis of bid side
evaluations for the Securities at such date. The market value of
the mutual fund shares was calculated by multiplying the aggregate
number of shares by the current net asset value per share as of the
same date.
<F5> At January 31, 2000, the net unrealized market appreciation of
Securities was comprised of the following:
<TABLE>
<S> <C>
Gross unrealized market appreciation $17,801,812
Gross unrealized market depreciation (281,130)
Net unrealized market appreciation $17,520,682
</TABLE>
The amortized cost of the Securities for Federal income tax
purposes was $22,572,956 at January 31, 2000.
A-8
<PAGE>
PART B
GOVERNMENT SECURITIES EQUITY TRUST
SERIES 9
------------------------
THE TRUST
The Government Securities Equity Trust Series 9 (the 'Trust' or 'GSET' as
the context requires) was created under the laws of the State of New York,
pursuant to a Trust Indenture and Agreement and a related Reference Trust
Agreement dated the Date of Deposit (collectively, the 'Indenture')* among
Prudential Securities Incorporated (the 'Sponsor' or 'Prudential Securities'),
The Chase Manhattan Bank (the 'Trustee') and Kenny S&P Evaluation Services, a
division of J.J. Kenny Co., Inc. (the 'Evaluator'). The Sponsor is a wholly
owned, indirect subsidiary of The Prudential Insurance Company of America.
The objectives of the Trust are to attempt to obtain safety of capital
through investment in stripped United States Treasury issued notes or bonds
paying no current interest (the 'Treasury Obligations') and to attempt to
provide for capital appreciation through investment in shares of Class A common
stock ('Fund Shares') of Alliance Technology Fund, Inc. (the 'Fund'), an
open-end, diversified, registered management investment company (the Treasury
Obligations and Fund Shares hereinafter, collectively, referred to as
'Securities'). There is of course no assurance that the Trust's or the Fund's
objectives will be achieved.
Trust Formation
On the Date of Deposit, the Sponsor deposited with the Trustee the
underlying Securities or confirmations of contracts for the purchase of such
Securities at prices equal to the evaluation of the Treasury Obligations on the
offering side of the market on the Date of Deposit as determined by the
Evaluator and the net asset value of the Fund Shares (see 'Schedule of Portfolio
Securities'). The Trust was created simultaneously with the deposit of the
Securities with the Trustee and the execution of the Indenture. The Trustee then
immediately delivered to the Sponsor certificates of beneficial interest (the
'Certificates') representing the units (the 'Units') comprising the entire
ownership of the Trust. Through this Prospectus, the Sponsor is offering the
Units for sale to the Public. The holders of Units (the 'Unit Holder' or 'Unit
Holders' as the context requires) will have the right to have their Units
redeemed at a price based on the aggregate bid side evaluation of the Treasury
Obligations as determined by the Evaluator and the net asset value of the Fund
Shares (the 'Redemption Price'), if the Units cannot be sold in the secondary
market which the Sponsor, although not obligated to, presently intends to
maintain. The Trust has a mandatory termination date set forth under 'Summary of
Essential Information,' but may be terminated prior thereto upon the occurrence
of certain events (see 'Amendment and Termination of the
Indenture--Termination'), including a reduction in the value of the Trust below
the value set forth under 'Summary of Essential Information.'
With the deposit of the Securities in the Trust on the Date of Deposit, the
Sponsor established a proportionate relationship between the maturity amounts of
Treasury Obligations and the number of Fund Shares in the Portfolio. Subsequent
to the initial deposit of Securities on the Date of Deposit, the Sponsor may,
but is not obligated to, deposit additional Securities (including contracts
together with an irrevocable letter of credit for the purchase thereof) in the
Trust, to receive in exchange therefor additional Units and to offer such Units
to the public by means of this Prospectus. A subsequent deposit by the Sponsor
of Treasury Obligations and Fund Shares will maintain the proportionate
relationship between the maturity amount of Treasury Obligations and the number
of Fund Shares immediately prior to such deposit, the deposited Treasury
Obligations will be substantially identical to those held in the Trust
immediately prior to the subsequent deposit. Each Unit owned by each Unit Holder
will represent the same proportionate interest in the Trust. As additional Units
are issued by the Trust as a result of the deposit of additional Securities by
the Sponsor, the aggregate value of the Securities in the Trust will be
increased and the fractional undivided interest in the Trust represented by each
Unit will be decreased.
The Trust Portfolio has been structured so that a Unit Holder will receive,
at the Mandatory Termination Date of the Trust, an amount per Unit at least
equal to $15.00 even if the value of the Fund Shares were to decline to zero. Of
course, whether or not a Unit Holder makes a profit or suffers a loss depends on
whether his purchase price was less than or
- ------------
* Reference is hereby made to said Indenture and any statements contained
herein are qualified in their entirety by the provisions of said Indenture.
B-1
<PAGE>
exceeded $15.00 per Unit. A Unit Holder selling his Units prior to the Mandatory
Termination Date may suffer a loss to the extent the sale price of his Units is
less than the purchase price. Because certain of the Securities from time to
time may be sold under circumstances described herein and because additional
Securities may be deposited into the Trust from time to time, the Trust is not
expected to retain its present size and composition. If any Units are redeemed
by the Trustee, the number of Securities in the Trust will be reduced by an
amount allocable to redeemed Units and the fractional undivided interest in such
Trust represented by each unredeemed Unit will be increased. Units will remain
outstanding until redeemed upon tender to the Trustee by any Unit Holder (which
may include the Sponsor) or until the termination of the Trust pursuant to the
Indenture.
Units will be sold to investors at the Public Offering Price next computed
after receipt of the investor's order to purchase Units, if Units are available
to fill orders on the day that such price is set. If Units are not available or
are insufficient to fill the order (e.g., if demand for Units exceeds the Units
available for sale and the Sponsor is not yet able to create additional Units)
the investor's order will be rejected by the Sponsor. The number of Units
available may be insufficient to meet demand because of the Sponsor's inability
to or decision not to purchase and deposit Treasury Obligations of the required
type and/or Fund Shares in amounts sufficient to maintain the proportionate
relationship between maturity values of Treasury Obligations and numbers of Fund
Shares of the Fund required to create additional Units. The Sponsor may, if
unable to accept orders on any given day, offer to execute the order as soon as
sufficient Units can be created. An investor will be deemed to place a new order
for that number of Units each day until that order is accepted. The investor's
order will then be executed, when Units are available, at the Public Offering
Price next calculated after such continuing order is accepted. The investor
will, of course, be able to revoke his purchase offer at any time prior to
acceptance by the Sponsor. The Sponsor will execute orders to purchase in the
order it determines that they are received, i.e., orders received first will be
filled first.
On a recent date the Trust consisted of the Securities listed under
'Schedule of Portfolio Securities.' Neither the Sponsor nor any affiliate of the
Sponsor will be liable in any way for any default, failure or defect in any
Securities.
Securities Selection
In selecting Treasury Obligations for deposit in the Trust, the following
factors, among others, were considered by the Sponsor: (i) the prices and yields
of such securities and (ii) the maturities of such securities. In selecting the
Fund Shares for deposit in the Trust, the following factors, among others, were
considered by the Sponsor: (i) the historical performance of the Fund and (ii)
the nature of the underlying Fund portfolio.
The Trust consists of such of the Securities listed under 'Schedule of
Portfolio Securities' herein as may continue to be held from time to time in the
Trust, newly deposited Securities meeting requirements for creation of
additional Units and undistributed cash receipts from the Fund and proceeds
realized from the disposition of Securities.
Stripped U.S. Treasury Obligations
The Treasury Obligations in the portfolio consist of United States Treasury
Obligations which have been stripped by the United States Treasury of their
unmatured interest coupons or such stripped coupons or receipts or certificates
evidencing such obligations or coupons. The obligor with respect to the Treasury
Obligations is the United States Government. Such Treasury Obligations may
include certificates that represent rights to receive the payments that comprise
a U.S. Government bond.
U.S. Treasury bonds evidence the right to receive a fixed payment at a
future date from the U.S. Government, and are backed by the full faith and
credit of the U.S. Government. The Treasury Obligations can be purchased at a
deep discount because the buyer receives only the right to receive one fixed
payment at a specific date in the future and does not receive any periodic
interest payments. The effect of owning deep discount obligations which do not
make current interest payments is that a fixed yield is earned not only on the
original investment but also, in effect, on all discount earned during the life
of the discount obligation. This implicit reinvestment of earnings at the same
rate eliminates the risk of being unable to reinvest the income on such
obligations at a rate as high as the implicit yield on the discount obligation,
but at the same time eliminates the holder's ability to reinvest at higher rates
in the future. For this reason, the Treasury Obligations are subject to
substantially greater price fluctuations during periods of changing market
interest rates than are securities of comparable quality which pay interest on a
current basis. Investors should be aware that income in respect of the accrual
of original issue discount on the Treasury Obligations, although not distributed
on a current basis, will be subject to income tax on a current basis at ordinary
income tax rates (see 'Tax Status of the Trust').
B-2
<PAGE>
The following disclosure concerning the Fund and its affiliates has been
provided by Alliance Fund Distributors, Inc., the Fund's principal underwriter.
While the Sponsor has not independently verified this information it has no
reason to believe that such information is not correct in all material respects.
No representation is made herein as to the accuracy or adequacy of such
information.
Alliance Technology Fund, Inc.
The portfolio of the Trust also contains the Fund's Class A shares (the
'Fund Shares'). On November 30, 1999, the net assets of the Fund were
approximately $7.3 billion. The investment adviser of the Fund is Alliance
Capital Management L.P. (the 'Investment Adviser'). The Fund's principal
underwriter is Alliance Fund Distributors, Inc. ('AFD').
The Fund intends for each taxable year to qualify to be treated as a
'regulated investment company' under the Internal Revenue Code of 1986, as
amended (the 'Code'). Such qualification relieves the Fund of Federal income tax
liability on the part of its investment company taxable income and net realized
capital gains which it timely distributes to its shareholders. Such
qualification does not, of course, involve governmental supervision of
management or investment practices or policies. Unit Holders should consult
their own counsel for a complete understanding of the requirements the Fund must
meet to qualify to be treated as a 'regulated investment company.'
It is the present policy of the Fund to distribute to shareholders all net
investment income and to distribute realized capital gains. However there is no
fixed dividend rate and there can be no assurance that the Fund will pay any
dividends or realize any capital gains. The amount of any dividend or
distribution paid on shares of the Fund must necessarily depend upon the
realization of income and capital gains from the Fund's investments.
The Fund intends to declare and distribute dividends in the amounts and at
the times necessary to avoid the application of the 4% Federal excise tax
imposed on certain undistributed income of regulated investment companies.
The State Street Bank and Trust Company (the 'Custodian') is the custodian
of the Fund's assets. Alliance Fund Services, Inc (the 'Transfer and Dividend
Disbursing Agent') serves as the Fund's dividend disbursing and transfer agent.
The Fund's prospectus is available to persons interested in purchasing Units of
the Trust upon request.
General Information Regarding the Fund
Any dividend or distribution by the Fund has the effect of reducing the net
asset value per share on the ex-dividend date by the amount of the dividend or
distribution (see 'Net Asset Value of The Fund Shares').
B-3
<PAGE>
FINANCIAL HIGHLIGHTS OF THE FUND
(for a share outstanding throughout the periods indicated)
The following financial highlights contain selected data for a Fund Share,
total investment return, ratios to average net assets and other supplemental
data for the periods indicated. The information is based on data contained in
the financial statements.
<TABLE>
<CAPTION>
Net Asset Net Gains Distributions
Value Net or Losses on Dividends in Excess of
Beginning Investment Securities Total from from Net Net Invest-
of Income (both realized Investment Investment ment
Fiscal Year or Period Period (Loss) and unrealized) Operations Income Income
- --------------------- --------- ---------- --------------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Year ended
11/30/99............ $ 68.60 (.99) $ 49.02 $ 48.03 $ 0.00 $ 0.00
Year ended
11/30/98............ 54.44 (.68)(b) 15.42 14.74 0.00 0.00
Year ended
11/30/97............ 51.15 (.51)(b) 4.22 3.71 0.00 0.00
Year ended
11/30/96............ 46.64 (.39)(b) 7.28 6.89 0.00 0.00
Year ended
11/30/95............ 31.98 (.30)(b) 18.13 17.83 0.00 0.00
<CAPTION>
Net
Net Assets, Ratio of Ratio of
Asset End Expenses Net
Total Value, of to Income
Distributions Dividends End Period Average (Loss) to
from Capital and of Total (000's Net Average
Fiscal Year or Period Gains Distributions Period Return(a) omitted) Assets Net Assets
- --------------------- -------------- ------------- -------- ---------- ---------- -------- -----------
<S> <C>
Year ended
11/30/99............ $(5.17) $ (5.17) $111.46 74.67% $2,167,060 1.68% (1.11)%
Year ended
11/30/98............ (.58) (.58) 68.60 27.36 824,636 1.66 (1.13)
Year ended
11/30/97............ (.42) (.42) 54.44 7.32 624,716 1.67 (.97)
Year ended
11/30/96............ (2.38) (2.38) 51.15 16.05 594,861 1.74 (87)
Year ended
11/30/95............ (3.17) (3.17) 46.64 61.93 398,262 1.75% (.77)
<CAPTION>
Portfolio
Turnover
Fiscal Year or Period Rate
- --------------------- --------
Year ended
11/30/99............ 54%
Year ended
11/30/98............ 67
Year ended
11/30/97............ 51
Year ended
11/30/96............ 30
Year ended
11/30/95............ 55
</TABLE>
- ---------------
(a) Total investment return is calculated assuming an initial investment made at
the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at the net asset value during the period, and a
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total
investment return. Total investment return calculated for a period of less
than one year is not annualized.
(b) Based on average shares outstanding.
B-4
<PAGE>
Additional Investment Policies and Practices of the Fund
Options. In seeking to attain its investment goal of capital appreciation,
the Fund may supplement customary investment practices by writing and purchasing
call options listed on one or more national securities exchanges and purchasing
listed put options, including put options on market indices. Upon payment of a
premium, a put option gives the buyer of such option the right to deliver a
specified number of shares of a stock to the writer of the option on or before a
fixed date, at a predetermined price. A call option gives the purchaser of the
option, upon payment of a premium, the right to call upon the writer to deliver
a specified number of shares of a specified stock on or before a fixed date, at
a predetermined price, usually the market price at the time the contract is
negotiated.
The writing of call options will involve a potential loss of opportunity to
sell securities at higher prices. In exchange for the premium received, the
writer of a fully collateralized call option assumes the full downside risk of
the securities subject to such option. In addition, the writer of the call gives
up the gain possibility of the stock protecting the call. Generally the
opportunity for profit from the writing of options is higher, and consequently
the risks are greater, when the stocks involved are lower priced or volatile, or
both. While an option that has been written is in force, the maximum profit that
may be derived from the optioned stock is the premium less brokerage commissions
and fees. The actual return earned by the Fund from writing a call option
depends on factors such as the amount of the transaction costs and whether or
not the option is exercised. Option premiums vary widely depending primarily on
supply and demand.
Writing and purchasing options are highly specialized activities and entail
greater than ordinary investment risks. If an option purchased by the Fund is
not sold and is permitted to expire without being exercised, its premium would
be lost by the Fund. When calls written by the Fund are exercised, the Fund will
be obligated to sell stocks below the current market price.
The Fund will not write a call unless the Fund at all times during the
option period owns either (a) the optioned securities, or securities convertible
into or carrying rights to acquire the optioned securities, or (b) an offsetting
call option on the same securities. It is the Fund's policy not to write a call
option if the premium to be received by the Fund in connection with such option
would not produce an annualized return of at least 15% of the then current
market value of the securities subject to option (without giving effect to
commissions, stock transfer taxes and other expenses of the Fund which are
deducted from premium receipts). The actual return earned by the Fund from
writing a call depends on factors such as the amount of the transaction costs
and whether or not the option is exercised. Calls written by the Fund will
ordinarily be sold either on a national securities exchange or through put and
call dealers, most, if not all, of whom are members of a national securities
exchange on which options are traded, and will in such cases be endorsed or
guaranteed by a member of a national securities exchange or qualified
broker-dealer, which may be Donaldson Lufkin & Jenrette Securities Corporation,
an affiliate of the Investment Adviser. The endorsing or guaranteeing firm
requires that the option writer (in this case the Fund) maintain a margin
account containing either corresponding stock or other equity as required by the
endorsing or guaranteeing firm.
In purchasing a call option, the Fund would be in a position to realize a
gain if, during the option period, the price of the security increased over the
strike price by an amount in excess of the premium paid and commissions payable
on exercise. It would realize a loss if the price of the security declined or
remained the same or did not increase over the strike price during the period by
more than the amount of the premium and commissions payable on exercise. By
purchasing a put option, the Fund would be in a position to realize a gain, if
during the option period, the price of the security declined below the strike
price by an amount in excess of the premium paid and commissions payable on
exercise. It would realize a loss if the price of the security increased or
remained the same or did not decrease below the strike price during that period
by more than the amount of the premium and commissions payable on exercise. If a
put or call option purchased by the Fund were permitted to expire without being
sold or exercised, its premium would represent a realized loss to the Fund.
If the Fund desires to sell a particular security from its portfolio on
which it has written an option, the Fund seeks to effect a 'closing purchase
transaction' prior to, or concurrently with, the sale of the security. A closing
purchase transaction is a transaction in which an investor who is obligated as a
writer of an option terminates his obligation by purchasing an option of the
same series as the option previously written. (Such a purchase does not result
in the ownership of an option.) The Fund may enter into a closing purchase
transaction to realize a profit on a previously written option or to enable the
Fund to write another option on the underlying security with either a different
exercise price or expiration date or both. The Fund realizes a profit or loss
from a closing purchase transaction if the cost of the
B-5
<PAGE>
transaction is less or more than the premium received from the writing of the
option. The Fund may not, however, effect a closing purchase transaction with
respect to an option after it has been notified of the exercise of such option.
The Fund may dispose of an option which it has purchased by entering into a
'closing sale transaction' with the writer of the option. A closing sale
transaction terminates the obligation of the writer of the option and does not
result in the ownership of an option. The Fund realizes a profit or loss from a
closing sale transaction if the premium received from the transaction is more
than or less than the cost of the option.
The Fund will not write a call option if, as a result, the aggregate of the
Fund's portfolio securities subject to outstanding call options (valued at the
lower of the option price or market value of such securities) would exceed 15%
of the Fund's total assets. The Fund will not sell any call option if such sale
would result in more than 10% of the Fund's assets being committed to call
options written by the Fund which, at the time of sale by the Fund, have a
remaining term of more than 100 days. The aggregate cost of all outstanding
options purchased and held by the Fund will at no time exceed 10% of the Fund's
total assets.
The Fund may purchase or write options on securities of the types in which
it is permitted to invest in privately negotiated (i.e., over-the-counter)
transactions. The Fund will effect such transactions only with investment
dealers and other financial institutions (such as commercial banks or savings
and loan institutions) deemed creditworthy by the Investment Adviser, and the
Investment Adviser has adopted procedures for monitoring the creditworthiness of
such entities.
Options on Market Indices. Options on securities indices are similar to
options on a security except that, rather than the right to take or make
delivery of a security at a specified price, an option on a securities index
gives the holder the right to receive, upon exercise of the option an amount of
cash if the closing level of the chosen index is greater than (in the case of a
call) or less than (in the case of a put) the exercise price of the option.
Through the purchase of listed index options, the Fund could achieve many of
the same objectives as through the use of options on individual securities.
Price movements in the Fund's portfolio securities probably will not correlate
perfectly with movements in the level of the index, and therefore, the Fund
would bear a risk of loss on index options purchased by it if favorable price
movements of the hedged portfolio securities do not equal or exceed losses on
the options or if adverse price movements of the hedged portfolio securities are
greater than gains realized from the options.
Warrants. The Fund may invest up to 10% of its total assets in warrants
which entitle the holder to buy equity securities at a specific price for a
specific period of time. Warrants may be considered more speculative than
certain other types of investments in that they do not entitle a holder to
dividends or voting rights with respect to the underlying securities nor do they
represent any rights in the assets of the issuing company. Also, the value of a
warrant does not necessarily change with the value of the underlying securities
and a warrant ceases to have value if it is not exercised prior to the
expiration date.
Convertible Securities. Prior to conversion, convertible securities have the
same general characteristics as non-convertible debt securities, which generally
provide a stable stream of income with yields that are generally higher than
those of equity securities of the same or similar issuers. The price of a
convertible security will normally vary with changes in the price of the
underlying equity security, although the higher yield tends to make the
convertible security less volatile than the underlying equity security. As with
debt securities, the market value of convertible securities tends to decrease as
interest rates rise and increase as interest rates decline. While convertible
securities generally offer lower interest or dividend yields than
non-convertible debt securities of similar quality, they offer investors the
potential to benefit from increases in the market price of the underlying common
stock. Convertible debt securities that are rated 'Baa' or lower by Moody's or
'BBB' or lower by S&P, Duff & Phelps or Fitch and comparable unrated securities
as determined by the Investment Adviser may share some or all of the risks of
non-convertible debt securities with those ratings. See 'Securities Ratings' on
page B-8.
Depository Receipts and Securities of Supranational Entities. Depository
receipts may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted. In addition, the issuers
of the stock of unsponsored depository receipts are not obligated to disclose
material information in the United States and, therefore, there may not be a
correlation between such information and the market value of the depository
receipts. ADRs are depository receipts typically issued by a U.S. bank or trust
company that evidence ownership of underlying securities issued by a foreign
corporation. GDRs and other types of depository receipts are typically issued by
foreign banks or trust companies and evidence ownership of underlying securities
issued by either a foreign or a U.S. company. Generally,
B-6
<PAGE>
depository receipts in registered form are designed for use in the U.S.
securities markets, and depository receipts in bearer form are designed for use
in foreign securities markets. For purposes of determining the country of
issuance, investments in depository receipts of either type are deemed to be
investments in the underlying securities.
A supranational entity is an entity designed or supported by the national
government of one or more countries to promote economic reconstruction or
development. Examples of supranational entities include, among others, the World
Bank (International Bank for Reconstruction and Development) and the European
Investment Bank. A European Currency Unit is a basket of specified amounts of
the currencies of the member states of the European Economic Community.
'Semi-governmental securities' are securities issued by entities owned by either
a national, state or equivalent government or are obligations of one of such
government jurisdictions which are not backed by its full faith and credit and
general taxing powers.
Foreign Securities. Investing in securities of non-U.S. companies which are
generally denominated in foreign currencies involves certain considerations
comprising both risk and opportunity not typically associated with investing in
United States companies. These considerations include changes in exchange rates
and exchange control regulation, political and social instability,
expropriation, imposition of foreign taxes, less liquid markets and less
available information than are generally the case in the United States, higher
transaction costs, less government supervision of exchanges and brokers and
issuers, difficulty in enforcing contractual obligations, lack of uniform
accounting and auditing standards and greater price volatility. Additional risks
may be incurred in investing in particular countries. The Fund will not purchase
a foreign security if such purchase would cause 10% or more of the value of the
Fund's total assets to be invested in foreign securities.
The securities markets of many foreign countries are relatively small, with
the majority of market capitalization and trading volume concentrated in a
limited number of companies representing a small number of industries.
Consequently, to the extent the Fund's investment portfolio includes such
securities it may experience greater price volatility and significantly lower
liquidity than a portfolio invested solely in equity securities of U.S.
companies. These markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading significant
blocks of securities, than is usual in the United States. Securities settlements
may in some instances be subject to delays and related administrative
uncertainties. Certain foreign countries require governmental approval prior to
investments by foreign persons or limit investment by foreign persons to only a
specified percentage of an issuer's outstanding securities or a specific class
of securities which may have less advantageous terms (including price) than
securities of the company available for purchase by nationals. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the costs and expenses of the Fund. In addition, the
repatriation of investment income, capital or the proceeds of sales of
securities from certain countries is controlled under regulations, including in
some cases the need for certain advance government notification or authority,
and if a deterioration occurs in a country's balance of payments, the country
could impose temporary restrictions on foreign capital remittances.
The Fund could be adversely affected by delays in, or a refusal to grant,
any required governmental approval for repatriation, as well as by the
application to it of other restrictions on investment. Investing in local
markets may require the Fund to adopt special procedures, which may involve
additional costs to the Fund. The liquidity of the Fund's investments in any
country in which any of these factors exists could be affected and the
Investment Adviser will monitor the effect of any such factor or factors on the
Fund's investments. Furthermore, transaction costs including brokerage
commissions for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the United States.
Issuers of securities in foreign jurisdictions are generally not subject to
the same degree of regulation as are U.S. issuers with respect to such matters
as insider trading rules, restrictions on market manipulation, shareholder proxy
requirements and timely disclosure of information. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases significantly,
from U.S. standards in important respects and less information may be available
to investors in foreign securities than to investors in U.S. securities.
Substantially less information is publicly available about certain non-U.S.
issuers than is available about U.S. issuers.
The economies of individual foreign countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product or gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position. Nationalization,
expropriation or confiscatory taxation, currency blockage, political changes,
government regulation, political or social instability or diplomatic
developments could affect adversely the economy of a foreign country or the
Fund's investments in such country. In the event of expropriation,
B-7
<PAGE>
nationalization or other confiscation, the Fund could lose its entire investment
in the country involved. In addition, laws in foreign countries governing
business organizations, bankruptcy and insolvency may provide less protection to
security holders such as the Fund than that provided by U.S. laws.
Illiquid Securities. The Fund may invest up to 10% of its net assets in
illiquid securities. Illiquid securities generally include (i) direct placements
or other securities that are subject to legal or contractual restrictions on
resale or for which there is no readily available market (e.g., when trading in
the security is suspended or, in the case of unlisted securities, when market
makers do not exist or will not entertain bids or offers), including many
individually negotiated currency swaps and any assets used to cover currency
swaps and most privately negotiated investments in state enterprises that have
not yet conducted an initial equity offering, (ii) over-the-counter options and
assets used to cover over-the-counter options, and (iii) repurchase agreements
not terminable within seven days.
Because of the absence of a trading market for illiquid securities, the Fund
may not be able to realize its full value upon sale. The Investment Adviser will
monitor the liquidity of the Fund's investments in illiquid securities. Rule
144A securities will not be treated as 'illiquid' for purposes of this limit on
investments.
The Fund may not be able to readily sell its investments. Such securities
are unlike securities that are traded in the open market and can be expected to
be sold immediately if the market is adequate. The sale price of illiquid
securities may be lower or higher than the Investment Adviser's most recent
estimate of their fair value. Generally, less public information is available
about the issuers of such securities than about companies whose securities are
traded on an exchange. To the extent that these securities are foreign
securities, there is no law in many of the countries in which the Fund may
invest similar to the Securities Act requiring an issuer to register the sale of
securities with a governmental agency or imposing legal restrictions on resales
of securities, either as to length of time the securities may be held or manner
of resale. However, there may be contractual restrictions on resales on
non-publicly traded foreign securities.
Loans of Portfolio Securities. The risks in lending portfolio securities as
with other extensions of credit, consist of possible loss of rights in the
collateral should the borrower fail financially. In determining whether to lend
securities to a particular borrower, the Investment Adviser will consider all
relevant facts and circumstances, including the creditworthiness of the
borrower. While securities are on loan, the borrower will pay the Fund any
income earned and earn additional income or receive an agreed upon amount of
income from a borrower who has delivered equivalent collateral. The Fund will
have the right to regain record ownership of loaned securities or equivalent
securities in order to exercise ownership rights such as voting rights,
subscription rights and rights to dividends, interest or distributions. The Fund
may pay reasonable finders', administrative and custodial fees in connection
with a loan.
Portfolio Turnover. The portfolio turnover rate for the Fund is included in
the Financial Highlights section. The Fund is actually managed and, in some
cases in response to market conditions, the Fund's portfolio turnover may exceed
100%. A higher rate of portfolio turnover increases brokerage and other
expenses, which must be borne by the Fund and its shareholders. Higher portfolio
turnover also may result in the realization of substantial net short-term
capital gains, which when distributed, are taxable to shareholders.
Securities Ratings. The ratings of securities by S&P, Moody's, Duff & Phelps
and Fitch are a generally accepted barometer of credit risk. They are, however,
subject to certain limitations from an investor's standpoint. The rating of an
issuer is heavily weighted by past developments and does not necessarily reflect
probable future conditions. There is frequently a lag between the time a rating
is assigned and the time it is updated. In addition, there may be varying
degrees of difference in credit risk of securities within each rating category.
Securities rated 'Aaa' by Moody's and 'AAA' by S&P, Duff & Phelps and Fitch
are considered to be of the highest quality; capacity to pay interest and repay
principal is extremely strong. Securities rated 'Aa' by Moody's and 'AA' by S&P,
Duff & Phelps and Fitch are considered to be high quality; capacity to repay
principal is considered very strong, although elements may exist that make risks
appear somewhat larger than exist with securities rated 'Aaa' or 'AAA'.
Securities rated 'A' are considered by Moody's to possess adequate factors
giving security to principal and interest. S&P, Duff Phelps and Fitch consider
such securities to have a strong capacity to pay interest and repay principal.
Such securities are more susceptible to adverse changes in economic conditions
and circumstances than higher-rated securities.
Securities rated 'Baa' by Moody's and 'BBB' by S&P, Duff & Phelps and Fitch
are considered to have an adequate capacity to pay interest and repay principal.
Such securities are considered to have speculative characteristics and share
some of the same characteristics as lower-rated securities. Sustained periods of
deteriorating economic conditions or of rising interest rates are more likely to
lead to a weakening in the issuer's capacity to pay interest and repay principal
than
B-8
<PAGE>
in the case of higher-rated securities. Securities rated 'Ba' by Moody's and
'BB' by S&P, Duff & Phelps and Fitch are considered to have speculative
characteristics with respect to capacity to pay interest and repay principal.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Securities rated 'Caa' by Moody's and 'CCC' by S&P, Duff & Phelps and Fitch
are of poor standing and there is a present danger with respect to payment of
principal or interest. Securities rated 'Ca' by Moody's and 'CC' by S&P and
Fitch are minimally protected, and default in payment of principal or interest
is probable. Securities rated 'C' by Moody's, S&P and Fitch are in imminent
default in payment of principal or interest and have extremely poor prospects of
ever attaining any real investment standing. Securities rated D by S&P and Fitch
are in default. The issuer of securities rated 'DD' by Duff Phelps is under an
order of liquidation.
Investment in Lower-Rated Fixed-lncome Securities. Lower-rated securities
i.e., those rated 'Ba' and lower by Moody's or 'BB' and lower by S&P, Duff &
Phelps or Fitch, are subject to greater risk of loss of principal and interest
than higher-rated securities. They are also generally considered to be subject
to greater market risk than higher-rated securities, and the capacity of issuers
of lower-rated securities to pay interest and repay principal is more likely to
weaken than is that of issuers of higher-rated securities in times of
deteriorating economic conditions or rising interest rates. In addition,
lower-rated securities may be more susceptible to real or perceived adverse
economic conditions than investment grade securities.
The market for lower-rated securities may be thinner and less active than
that for higher-rated securities, which can adversely affect the prices at which
these securities can be sold. To the extent that there is no established
secondary market for lower-rated securities, the Fund may experience difficulty
in valuing such securities and, in turn, the Fund's assets. In addition, adverse
publicity and investor perceptions about lower-rated securities, whether or not
factual, may tend to impair their market value and liquidity.
The Investment Adviser will try to reduce the risk inherent in investment in
lower-rated securities through credit analysis, diversification and attention to
current developments and trends in interest rates and economic and political
conditions. However, there can be no assurance that losses will not occur. Since
the risk of default is higher for lower-rated securities, the Investment
Adviser's research and credit analysis are a correspondingly more important
aspect of its program for managing the Fund's securities than would be the case
if the Fund did not invest in lower-rated securities.
In seeking to achieve the Fund's investment objective, there will be times,
such as during periods of rising interest rates, when depreciation and
realization of capital losses on securities in the Fund's portfolio will be
unavoidable. Moreover, medium- and lower-rated securities and non-rated
securities of comparable quality may be subject to wider fluctuations in yield
and market values than higher-rated securities under certain market conditions.
Such fluctuations after a security is acquired do not affect the cash income
received from that security but are reflected in the net asset value of the
Fund.
Certain lower rated securities may contain call or buy-back features that
permit the issuers thereof to call or repurchase such securities. Such
securities may present risks based on prepayment expectations. If an issuer
exercises such a provision, the Fund may have to replace the called security
with a lower-yielding security, resulting in a decreased rate of return to the
Fund.
Temporary Defensive Position. For temporary defensive purposes, the Fund may
invest in certain types of short-term, liquid, high grade debt securities. These
securities may include U.S. Government securities, qualifying bank deposits,
money market instruments, prime commercial paper, other types of short-term debt
securities including notes and bonds and short-term, foreign-currency
denominated securities of the type mentioned above issued by foreign
governmental entities, companies and supranational organizations. While the Fund
is investing for temporary defensive purposes, it may not meet its investment
objectives.
Future Developments. The Fund may, following written notice to its
shareholders, take advantage of other investment practices that are not
currently contemplated for use by the Fund, or are not available but may yet be
developed, to the extent such investment practices are consistent with the
Fund's investment objective and legally permissible for the Fund. Such
investment practices, if they arise, may involve risks that exceed those
involved in the activities described above.
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<PAGE>
Fundamental Investment Policies
The following restrictions may not be changed without approval of a majority
of the outstanding voting securities of the Fund, which means the vote of (i)
67% or more of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented or (ii) more than 50% of the outstanding
shares, whichever is less.
To maintain portfolio diversification and reduce investment risk, as a
matter of fundamental policy, the Fund may not:
(i) with respect to 75% of its total assets, have such assets
represented by other than: (a) cash and cash items, (b) securities issued or
guaranteed as to principal or interest by the U.S. Government or its
agencies or instrumentalities, or (c) securities of any one issuer (other
than the U.S. Government and its agencies or instrumentalities) not greater
in value than 5% of the Fund's total assets, and not more than 10% of the
outstanding voting securities of such issuer;
(ii) purchase the securities of any one issuer, other than the U.S.
Government and its agencies or instrumentalities, if immediately after and
as a result of such purchase (a) the value of the holdings of the Fund in
the securities of such issuer exceeds 25% of the value of the Fund's total
assets, or (b) the Fund owns more than 25% of the outstanding securities of
any one class of securities of such issuer;
(iii) concentrate its investments in any one industry, but the Fund has
reserved the right to invest up to 25% of its total assets in a particular
industry;
(iv) invest in the securities of any issuer which has a record of less
than three years of continuous operation (including the operation of any
predecessor) if such purchase at the time thereof would cause 10% or more of
the value of the total assets of the Fund to be invested in the securities
of such issuer or issuers;
(v) make short sales of securities or maintain a short position or write
put options;
(vi) mortgage, pledge or hypothecate or otherwise encumber its assets,
except as may be necessary in connection with permissible borrowings
mentioned in investment restriction (xiv) listed below;
(vii) purchase the securities of any other investment company or
investment trust, except when such purchase is part of a merger,
consolidation or acquisition of assets;
(viii) purchase or sell real property (including limited partnership
interests but excluding readily marketable interests in real estate
investment trusts or readily marketable securities of companies which invest
in real estate), commodities or commodity contracts;
(ix) purchase participations or other direct interests in oil, gas, or
other mineral exploration or development programs;
(x) participate on a joint or joint and several basis in any securities
trading account;
(xi) invest in companies for the purpose of exercising control;
(xii) purchase securities on margin, but it may obtain such short-term
credits from banks as may be necessary for the clearance of purchases and
sales of securities;
(xiii) make loans of its assets to any other person, which shall not be
considered as including the purchase of portion of an issue of
publicly-distributed debt securities, except that the Fund may purchase
non-publicly distributed securities subject to the limitations applicable to
restricted or not readily marketable securities and except for the lending
of portfolio securities in certain circumstances;
(xiv) borrow money except for the short-term credits from banks referred
to in paragraph (xii) above and except for temporary or emergency purposes
and then only from banks and in an aggregate amount not exceeding 5% of the
value of its total assets at the time any borrowing is made. Money borrowed
by the Fund will be repaid before the Fund makes any additional investments;
(xv) act as an underwriter of securities of other issuers, except that
the Fund may acquire restricted or not readily marketable securities under
circumstances where, if sold, the Fund might be deemed to be an underwriter
for purposes of the Securities Act of 1933 (the Fund will not invest more
than 10% of its net assets in aggregate in restricted securities and not
readily marketable securities); and
B-10
<PAGE>
(xvi) purchase or retain the securities of any issuer if, to the
knowledge of the Fund's management, those officers and directors of the
Fund, and those employees of the Investment Adviser, who each owns
beneficially more than one-half of 1% of the outstanding securities of such
issuer together own more than 5% of the securities of such issuer.
Whenever any investment policy or restriction states a minimum or maximum
percentage of the Fund's assets which may be invested in any security or other
asset, it is intended that such minimum or maximum percentage limitation be
determined immediately after and as a result of the Fund's acquisition of such
security or other asset. Accordingly, any later increase or decrease in
percentage beyond the specified limitations resulting from a change in values or
net assets will not be considered a violation of this percentage limitation. In
the event that the aggregate of restricted and not readily marketable securities
exceeds 10% of the Fund's net assets, the management of the Fund will consider
whether action should be taken to reduce the percentage of such securities.
In connection with the qualification or registration of the Fund's shares
for sale under the securities laws of certain sates, the Fund has agreed, in
addition to the foregoing investment restrictions, that it will not invest in
the securities of any issuer which has a record of less than three years of
continuous operation (including the operation of any predecessor) if such
purchase at the time thereof would cause more than 5% of the value of the Fund's
total assets to be invested in the securities of such issuer or issuers. The
Fund may not purchase or sell real property (including limited partnership
interests but excluding readily marketable interests in real estate investment
trusts, or readily marketable securities of companies which invest in real
estate) commodities or commodity contracts. In addition, the Fund may not invest
in mineral leases.
Net Asset Value of the Fund Shares
The Fund's net asset value or NAV is calculated at 4:00 p.m., Eastern Time,
each day the Exchange is open. The Fund's NAV is calculated by dividing the
value of the Fund's total assets, less its liabilities, by the total number of
its shares then outstanding. A Fund business day is any weekday on which the
Exchange is open for trading.
The Fund values its portfolio securities at their current market value or,
if such quotations are not readily available, such other methods as the Fund's
Board of Directors believes accurately reflect fair value. The Board of
Directors has delegated to the Investment Adviser certain of the Board's duties
with respect to the following procedures. Readily marketable securities listed
on the Exchange or on a foreign securities exchange (other than foreign
securities exchanges whose operations are similar to those of the United States
over-the-counter market) are valued, except as indicated below, at the last sale
price reflected on the consolidated tape at the close of the Exchange or, in the
case of a foreign securities exchange, at the last quoted sale price, in each
case on the business day as of which such value is being determined. If there
has been no sale on such day, the securities are valued at the mean of the
closing bid and asked prices on such day. If no bid or asked prices are quoted
on such day, then the security is valued in good faith at fair value by, or in
accordance with procedures established by, the Board of Directors. Readily
marketable securities not listed on the Exchange or on a foreign securities
exchange but listed on other United States national securities exchanges or
traded on The Nasdaq Stock Market, Inc. are valued in like manner. Portfolio
securities traded on the Exchange and on one or more foreign or other national
securities exchanges are valued in accordance with these procedures by reference
to the principal exchange on which the securities are traded.
Readily marketable securities traded in the over-the-counter market,
securities listed on a foreign securities exchange whose operations are similar
to those of the United States over-the-counter market, and securities listed on
a U. S. national securities exchange whose primary market is believed to be
over-the-counter (but excluding securities traded on The Nasdaq Stock Market,
Inc.), are valued at the mean of the current bid and asked prices as reported by
Nasdaq or, in the case of securities not quoted by Nasdaq, the National
Quotation Bureau or another comparable sources.
Listed put or call options purchased by the Fund are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day.
Open futures contracts and options thereon will be valued using the closing
settlement price or, in the absence of such a price, the most recent quoted bid
price. If there are no quotations available for the day of valuations, the last
available closing settlement price will be used.
U.S. Government securities and other debt instruments having 60 days or less
remaining until maturity are valued at amortized cost if their original maturity
was 60 days or less, or by amortizing their fair value as of the 61st day prior
to maturity if their original term to maturity exceeded 60 days (unless in
either case the Board of Directors determines that this method does not
represent fair value).
B-11
<PAGE>
Fixed-income securities may be valued on the basis of prices provided by a
pricing service when such prices are believed to reflect the fair market value
of such securities. The prices provided by pricing service take into account
many factors, including institutional size trading in similar groups of
securities and any developments related to specific securities.
All other assets of the Fund are valued in good faith at fair value by, or
in accordance with procedures established by, the Board of Directors.
Trading in securities on Far Eastern and European securities exchanges and
over-the-counter markets is normally completed well before the close of business
of each Fund business day. In addition, trading in foreign markets may not take
place on all Fund business days. Furthermore, trading may take place in various
foreign markets on days that are not Fund business days. The Fund's calculation
of the net asset value per share, therefore, does not always take place
contemporaneously with the most recent determination of the prices of portfolio
securities in these markets. Events affecting the values of these portfolio
securities that occur between the time their prices are determined in accordance
with the above procedures and the close of the Exchange will not be reflected in
the Fund's calculation of net asset value unless it is believed that these
prices do not reflect current market value, in which case the securities will be
valued in good faith by, or in accordance with procedures established by, the
Board of Directors at fair value.
The Board of Directors may suspend the determination of the Fund's, net
asset value (and the offering and sale of shares), subject to the rules of the
Commission and other governmental rules and regulations, at a time when: (1) the
Exchange is closed, other than customary weekend and holiday closings, (2) an
emergency exists as a result of which it is not reasonably practicable for the
Fund to dispose of securities owned by it or to determine fairly the value of
its net assets, or (3) for the protection of shareholders, the Commission by
order permits a suspension of the right of redemption or a postponement of the
date of payment on redemption.
For purposes of determining the Fund's NAV, all assets and liabilities
initially expressed in a foreign currency will be converted into U.S. dollars at
the mean of the current bid and asked prices of such currency against the U.S.
dollar last quoted by a major bank that is a regular participant in the relevant
foreign exchange market or on the basis of a pricing service that takes into
account the quotes provided by a number of such major banks. If such quotations
are not available as of the close of the Exchange, the rate of exchange will be
determined in good faith by, or under the direction of, the Board of Directors.
The Fund's Management
The Fund's Investment Adviser is Alliance Capital Management L.P., which is
a Delaware limited partnership with principal offices at 1345 Avenue of the
Americas, New York, NY 10105 and a New York Stock Exchange listed company. The
Investment Adviser has been retained under an investment advisory agreement (the
'Advisery Agreement') to provide investment advice and, in general, to conduct
the management and investment program of the Fund under the supervision and
control of the Fund's Board of Directors.
Alliance is a leading international investment manager supervising client
accounts with assets as of December 31, 1999 totaling more than $368 billion (of
which approximately $168 billion represented the assets of investment
companies). As of December 31, 1999, Alliance managed retirement assets for many
of the largest public and private employee benefit plans (including 31 of the
nation's Fortune 100 companies), for public employee retirement funds in 31
states, for investment companies, and for foundations, endowments, banks and
insurance companies worldwide. The 52 registered investment companies managed by
Alliance comprising 105 separate investment portfolios currently have
approximately 5 million shareholder accounts.
Alliance Capital Management Corporation ('ACMC') is the general partner of
the Adviser and a wholly owned subsidiary of The Equitable Life Assurance
Society of the United States ('Equitable'). Equitable, one of the largest life
insurance companies in the United States, is the beneficial owner of an
approximately 55.4% partnership interest in the Adviser. Alliance Capital
Management Holding L.P. ('Alliance Holding') owns an approximately 41.9%
partnership interest in the Adviser. Equity interests in Alliance Holding are
traded on the New York Stock Exchange in the form of units. Approximately 98% of
such interests are owned by the public and management or employees of the
Adviser and approximately 2% are owned by Equitable. Equitable is a wholly owned
subsidiary of AXA Financial, Inc. ('AXA Financial'), a Delaware corporation
whose shares are traded on the New York Stock Exchange. AXA Financial serves as
the holding company for the Adviser, Equitable and Donaldson, Lufkin & Jenrette,
Inc., an integrated investment and merchant bank. As of June 30, 1999, AXA, a
French insurance holding company, owned approximately 58.2% of the
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<PAGE>
issued and outstanding shares of common stock of AXA Financial. Until October
29, 1999, Alliance Holding served as the investment adviser to the Fund. On that
date, Alliance Holding reorganized by transferring its business to the Adviser.
Prior thereto, the Adviser had no material business operations. One result of
the organization was that the Advisery Agreement, then between the Fund and
Alliance Holding, was transferred to the Adviser by means of a technical
assignment, and ownership of Alliance Fund Distributors, Inc. and Alliance Fund
Services, Inc., the Fund's principal underwriter and transfer agent,
respectively, also was transferred to the Adviser.
Alliance provides investment advisory and order placement facilities for the
Fund. Under its Advisery Agreement, the Fund paid Alliance as a percentage of
average daily net assets 1.10% for the fiscal year ending November 30, 1999.
The Fund pays a quarterly advisory fee of 1/4 of 1.00% of the first $10
billion, 1/4 of .975% of the next $2.5 billion, 1/4 of .95% of the next $2.5
billion, 1/4 of .925% of the next $2.5 billion, 1/4 of .90% of the next $2.5
billion, 1/4 of .875% of the next $2.5 billion and 1/4 of .85% of such assets in
excess of $22.5 billion.
The Fund has, under the Advisery Agreement, assumed the obligation for
payment of all of its other expenses. As to the obtaining of services other than
those specifically provided to the Fund by the Investment Adviser, the Fund may
employ its own personnel. For such services, it also may utilize personnel
employed by the Investment Adviser or its affiliates and, in such event, the
services will be provided to the Fund at cost and the payments therefor must be
specifically approved by the Fund's Board of Directors.
For the fiscal years ended November 30, 1999, 1998 and 1997 the Investment
Adviser received from the Fund advisory fees of $52,868,775, $24,166,681 and
$17,970,061, respectively.
The following table lists the person or persons who are primarily
responsible for the day-to-day management of the Fund's portfolio, the length of
time that each person has been primarily responsible, and each person's
principal occupation during the past five years.
<TABLE>
<CAPTION>
Principal occupation during
Employee; year; title the past five years
- ------------------------------------------------- -------------------------------------------------
<S> <C>
Peter Anastos since 1992--Senior Vice President Associated with the Investment Adviser.
of ACMC
Gerald T. Malone since 1992--Senior Vice Associated with the Investment Adviser.
President of ACMC
</TABLE>
The Fund's Plan of Distribution
The Fund has entered into a Distribution Services Agreement (the
'Agreement') with Alliance Fund Distributors, Inc., the Fund's principal
underwriter ('AFD') to permit AFD to distribute the Fund's shares and to permit
the Fund to directly or indirectly pay distribution service fees to defray
expenses associated with the distribution of its shares in accordance with a
plan of distribution which is included in the Agreement and has been duly
adopted and approved in accordance with Rule 12b-1 adopted by the Securities and
Exchange Commission under the Act (the 'Plan').
The Plan provides that AFD will use the distribution services fee received
from the Fund in its entirety for payments (i) to compensate broker-dealers or
other persons for providing distribution assistance, (ii) to otherwise promote
the sale of shares of the Fund, and (iii) to compensate broker-dealers,
depository institutions and other financial intermediaries for providing
administrative, accounting and other services with respect to the Fund's
shareholders. In this regard, some payments under the Plan are used to
compensate financial intermediaries with trail or maintenance commissions in an
amount equal to .25%, annualized, with respect to Fund Shares of the assets
maintained in the Fund by their customers. The Plan also provides that the
Investment Adviser may use its own resources to finance the distribution of the
Fund's shares.
The Fund is not obligated under the Plan to pay any distribution services
fee in excess of the amounts set forth above. With respect to Fund Shares,
distribution expenses accrued by AFD in one fiscal year may not be paid from
distribution services fees received from the Fund in subsequent fiscal years.
The Plan is in compliance with rules of the National Association of
Securities Dealers, Inc. which effectively limit the annual asset-based sales
charges and service fees that a mutual fund may pay on a class of shares to .75%
and .25%, respectively, of the average annual net assets attributable to that
class. The rules also limit the aggregate of all front-end,
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<PAGE>
deferred and asset-based sales charges imposed with respect to a class of shares
by a mutual fund that also charges a service fee of 6.25% of cumulative gross
sales of shares of that class, plus interest at the prime rate plus 1% per
annum.
Under the Agreement, the Treasurer of the Fund reports the amounts expended
under the Plan and the purposes for which such expenditures were made to the
Directors of the Fund on a quarterly basis. Also, the Agreement provides that
the selection and nomination of Directors who are not interested persons of the
Fund (as defined in the Act) are committed to the discretion of such
disinterested Directors then in office.
During the Fund's fiscal year ended November 30, 1999, the Fund paid
distribution services fees for expenditures under the Agreement to AFD with
respect to Fund Shares in amounts aggregating $4,273,345, which constituted .30%
annualized of the Fund's aggregate average daily net assets attributable to the
Fund Shares during the period, and the Investment Adviser made payments from its
own resources aggregating $3,020,454. Of the $7,293,799 paid by the Fund and the
Investment Adviser under the Agreement, $159,482 was spent on advertising,
$90,244 on the printing and mailing of prospectuses for persons other than
current shareholders, $4,041,870 for compensation to broker-dealers and other
financial intermediaries (including $450,771 to AFD), $1,130,533 for
compensation to sales personnel and $1,871,670 was spent on printing of sales
literature, due diligence, travel, entertainment and other promotional expenses.
Fund Risk Factors
The Fund's Shares may appreciate or depreciate in value (or pay dividends)
depending on the full range or economic and market influences affecting the
securities in which the Fund is invested and the success of the Fund's
management in anticipating or taking advantage of such opportunities as they may
occur. In addition, in the event of the inability of the investment adviser to
act and/or claims or actions against the Fund by regulatory agencies or other
persons or entities, the value of the Fund Shares may decline thereby causing a
decline in the value of Units. Termination of the Fund prior to the Termination
Date of the Trust may result in the termination of the Trust sooner than
anticipated. Prior to a purchase of Units, investors should determine that the
aforementioned risks are consistent with their investment objectives.
The price of the Fund Shares will fluctuate as the daily prices of the
individual securities in which it invests fluctuate, so that Fund Shares, when
redeemed, may be worth more or less than their original cost. With respect to
investments in foreign currency denominated securities, these fluctuations may
be magnified by changes in foreign exchange rates. Investment in the Fund
involves risks not associated with funds that invest solely in securities of
U.S. issuers. While the Fund invests principally in common stocks and other
equity securities, in order to achieve its investment objective the Fund may at
times use certain types of investment derivatives, such as options, futures,
forwards and swaps. These involve risks different from, and, in certain cases,
greater than, the risks presented by more traditional investments.
All Fund investments involve risk and there can be no guarantee against loss
resulting from an investment in the Fund, nor can there be any assurance that
the Fund's investment objective will be attained. As with any investment in
securities, the value of, and income from, an investment in the Fund can
decrease as well as increase, depending on a variety of factors which may affect
the values and income generated by the Fund's portfolio securities, including
general economic conditions, market factors and currency exchange rates.
Additionally, investment decisions made by the Fund's investment adviser will
not always be profitable or prove to have been correct. The Fund is not intended
as a complete investment program.
Risk of Investment in Units
The net asset value of the Fund's Shares, like the value of the Treasury
Obligations, will fluctuate over the life of the Trust and may be more or less
than the price paid therefor by the Trust. An investment in Units of the Trust
should be made with an understanding of the risks inherent in ownership of Fund
Shares and Treasury Obligations. However, the Sponsor believes that, upon
termination of the Trust on the mandatory termination date, even if the Fund
Shares are worthless, the Treasury Obligations will provide sufficient cash at
maturity to equal $15.00 per Unit. Part of such cash will, however, represent
the accrual of taxable original issue discount on the Treasury Obligations.
The Sponsor will receive a sales charge on all Units sold. In addition, the
Indenture requires the Trustee to vote all Fund Shares held in the Trust in the
same manner and ratio on all proposals as the vote of owners of Fund Shares not
held by the Trust.
A UNIT HOLDER PURCHASING A UNIT ON THE DATE OF THIS PROSPECTUS OR THEREAFTER
MAY RECEIVE TOTAL DISTRIBUTIONS, INCLUDING DISTRIBUTIONS MADE UPON TERMINATION
OF THE TRUST, THAT ARE LESS THAN THE AMOUNT PAID FOR A UNIT.
B-14
<PAGE>
Sales of Securities in the Portfolio under certain permitted circumstances
may result in an accelerated termination of the Trust. It is also possible that,
in the absence of a secondary market for the Units or otherwise, redemptions of
Units may occur in sufficient numbers to reduce the portfolio to a size
resulting in such termination. In addition, the Trust may be terminated if the
net aggregate value of the Trust is less than 40% of the aggregate maturity
values of the Treasury Obligations calculated immediately after the most recent
deposit of Treasury Obligations in the Trust (see 'Amendment and
Termination--Termination'). Early termination of the Trust may have important
consequences to the Unit Holder; e.g., to the extent that Units were purchased
with a view to an investment of longer duration, the overall investment program
of the investor may require readjustment; or the overall return on investment
may be less than anticipated, and may result in a loss to a Unit Holder.
In the event of the early termination of the Trust, the Trustee will cause
the Fund Shares to be sold and the proceeds thereof distributed to the Unit
Holders in proportion to their respective interests therein, unless a Unit
Holder elects to receive Fund Shares 'in kind' (see 'Amendment and Termination
of the Indenture--Termination'). Proceeds from the sale of the Treasury
Obligations will be paid in cash.
The Trustee will have no power to vary the investments of the Trust, i.e.,
the Trustee will have no managerial power to take advantage of market variations
to improve a Unit Holder's investment but may dispose of Securities only under
limited circumstances (see 'Sponsor--Responsibility').
To the best of the Sponsor's knowledge there was no litigation pending in
respect of any Security which might reasonably be expected to have a material
adverse effect on the Trust. At any time after the date hereof, litigation may
be instituted on a variety of grounds with respect to the Securities. The
Sponsor is unable to predict whether any such litigation may be instituted, or
if instituted, whether such litigation might have a material adverse effect on
the Trust.
The Units
On a recent date, each Unit represented a fractional undivided interest in
the Securities and the net income of the Trust set forth under 'Summary of
Essential Information.' Thereafter, if any Units are redeemed by the Trustee,
the amount of Securities in the Trust will be reduced by amounts allocable to
redeemed Units, and the fractional undivided interest represented by each Unit
in the balance will be increased, although the actual interest in the Trust
represented by each Unit will remain unchanged. Units will remain outstanding
until redeemed upon tender to the Trustee by any Unit Holder (which may include
the Sponsor) or until the termination of the Trust itself (see 'Rights of Unit
Holders--Redemption' and 'Amendment and Termination of the
Indenture--Termination').
TAX STATUS OF THE TRUST
In the opinion of Messrs. Cahill Gordon & Reindel, counsel for the Sponsor,
under existing law:
The Trust is not an association taxable as a corporation for United
States federal income tax purposes and income of the Trust will be treated
as income of the Unit Holders in the manner set forth below. Each Unit
Holder will be considered the owner of a pro rata portion of each asset of
the Trust under the grantor trust rules of Sections 671-678 of the Internal
Revenue Code of 1986, as amended (the 'Code').
Each Unit Holder will be required to include in his gross income, as
determined for federal income tax purposes, original issue discount with
respect to his pro rata portion of the Treasury Obligations held by the
Trust at the same time and in the same manner as though the Unit Holder were
the direct owner of such pro rata portion. Each Unit Holder will be
considered to have received the distributions paid on his pro rata portion
of the Fund Shares held in the Trust (including such portion of such
distributions used to pay fees and expenses of the Trust) when such
distributions are received or deemed to be received by the Trust. An
individual Unit Holder who itemizes deductions will be entitled to an
itemized deduction for his pro rata share of fees and expenses paid by the
Trust as though such fees and expenses were paid directly by the Unit
Holder, but only to the extent that this amount together with the Unit
Holder's other miscellaneous deductions exceeds 2% of his adjusted gross
income. A corporate Unit Holder will not be subject to this 2% floor. The
proceeds received by a Unit Holder upon termination of the Trust,
redemptions of Units or sales of Fund Shares will reflect the actual amounts
paid to them, net of the Deferred Sales Charge and organizational costs. The
relevant tax reporting forms sent to Unit Holders will reflect the actual
amount paid to them net of the Deferred Sales Charge and organizational
costs. Accordingly, Unit Holders should not increase the total cost for
their Units by the amount of the Deferred Sales Charge or organizational
costs.
B-15
<PAGE>
Each Unit Holder will have a taxable event when a Security is disposed
of (whether by sale, exchange, redemption, or payment at maturity) or when
the Unit Holder redeems or sells his Units. The total tax cost of each Unit
(including the Initial Sales Charge) to a Unit Holder must be allocated
among the assets held in the Trust in proportion to the relative fair market
values thereof on the date the Unit Holder purchases his Units.
The tax basis of a Unit Holder with respect to his interest in a Treasury
Obligation will be increased by the amount of original issue discount thereon
properly included in the Unit Holder's gross income as determined for federal
income tax purposes.
The amount of gain recognized by a Unit Holder on a disposition of Fund
Shares or Treasury Obligations by the Trust will be equal to the difference
between such Unit Holder's pro rata portion of the gross proceeds realized by
the Trust on the disposition and the Unit Holder's tax basis in his pro rata
portion of the Fund Shares or Treasury Obligation disposed of, determined as
described in the preceding paragraphs. Any such gain recognized on a sale or
exchange and any such loss will be capital gain or loss, except that gain or
loss recognized by a financial institution with respect to a Treasury Obligation
or by a dealer with respect to Fund Shares or Treasury Obligations will be
ordinary income or loss. Any capital gain or loss arising from the disposition
of a Unit Holder's pro rata interest in a Security will be long-term capital
gain or loss if the Unit Holder has held his Units and the Trust has held the
Security for more than one year. A capital loss due to sale or redemption of a
Unit Holder's interest with respect to Fund Shares held in the Trust will be
treated as a long-term capital loss to the extent of any long-term capital gains
derived by the Unit Holder from such interest if the Unit Holder has held such
interest for six months or less. The holding period for this purpose will be
determined by applying the rules of Sections 246(c)(3) and (4) of the Code.
Under the Code, capital gain of individuals, estates and trusts from Securities
held for more than 1 year is subject to a maximum nominal tax rate of 20%. Net
capital gain may result in a disallowance of itemized deductions and/or affect a
personal exemption phase-out.
If the Unit Holder sell or redeems a Unit for cash he is deemed thereby to
have disposed of his entire pro rata interest in all Trust assets represented by
the Unit and will have taxable gain or loss measured by the difference between
his per Unit tax basis for such assets, as described above, and the amount
realized.
Each Unit Holder's interest in each Treasury Obligation is treated as an
interest in an original issue discount obligation. The original issue discount
on each Treasury Obligation will be taxed as ordinary income for federal income
tax purposes and will be equal to the excess of the maturity value of the Unit
Holder's interest in the Treasury Obligation over its cost to the Unit Holder. A
Unit Holder will be required to include in gross income for each taxable year a
portion of this original issue discount and will be subject to income tax
thereon even though the income is not disturbed. Original issue discount is
treated for federal income tax purposes as income earned under a constant
interest formula which takes into account the semi-annual compounding of accrued
interest, resulting in an increasing amount of original issue discount accruing
in each year.
A Unit Holder who is neither a citizen nor a resident of the United States
and is not a United States domestic corporation (a 'foreign Unit Holder') will
not generally be subject to United States federal income taxes, including
withholding taxes, on his pro rata share of the original issue discount on the
Treasury Obligations held in the Trust, any gain from the sale or other
disposition of his, her or its pro rata interest in a Treasury Obligation or
Fund Share held in the Trust, any undistributed gain retained by the Fund and
designated by the Fund to be taken into account by its shareholders or any
capital gain dividend received by the Trust from the Fund, which original issued
discount is not effectively connected with the conduct by the foreign Unit
Holder of a trade or business within the United States and which gain is either
(I) not from sources within the United States or (II) not so effectively
connected, provided that:
(a) with respect to original issue discount (i) the Treasury Obligations
are in registered form and were issued after July 18, 1984, and (ii) the
foreign Unit Holder is not a controlled foreign corporation related (within
the meaning of Section 864(d)(4) of the Code) to The Prudential Insurance
Company of America;
(b) with respect to any U.S. -source capital gain, the foreign Unit
Holder (if an individual) is not present in the United States for 183 days
or more during his or her taxable year in which the gain was realized and so
certifies; and
(c) the foreign Unit Holder provides the required certifications
regarding (i) his, her or its status, (ii) in the case of U.S. source
income, the fact that the original issue discount or gain is not effectively
connected with the conduct by the foreign Unit Holder of a trade or business
within the United States, and (iii) if determined to be required, the
controlled foreign corporation matter mentioned in clause (a)(ii) above.
B-16
<PAGE>
Fund distributions paid to foreign Unit Holders either directly or through the
Trust and not constituting income effectively connected with the conduct of a
trade or business within the United States by the distributee will be subject to
United States federal withholding taxes at a 30% rate or a lesser rate
established by treaty unless the Fund distribution is a capital gain dividend.
Foreign Unit Holders should consult their own tax counsel with respect to United
States tax consequences of ownership of Units.
Each Unit Holder (other than a foreign Unit Holder who has properly provided
the certifications described in the preceding paragraph) will be requested to
provide the Unit Holder's taxpayer identification number to the Trustee and to
certify that the Unit Holder has not been notified that payments to the Unit
Holder are subject to back-up withholding. If the taxpayer identification number
and an appropriate certification are not provided as required, a 31% back-up
withholding will apply.
The Fund has elected to qualify for and intends to remain qualified as a
regulated investment company under the Code and to meet applicable requirements
with respect to its gross income, diversification of holdings and distributions
so that the Fund (but not the Trust Unit Holders) will be relieved of federal
income tax on the amounts distributed by the Fund to the Trust. Such
distributions may include taxable net investment income and net capital gain
from sales of securities held by the Fund. It is also possible for the Fund to
retain net capital gains from investments, in which event the Fund will be
subject to Federal income tax on the retained amount; but may, as a regulated
investment company, designate the retained amount as undistributed capital gains
in a notice to those persons who were its shareholders (including the Trust and
thus its Unit Holders) at the close of the Fund's taxable year.
If the Fund were to so retain any net capital gains for investment, its
shareholders (including Trust Unit Holders) (a) would be required to include in
gross income for tax purposes, as long-term capital gains, their proportionate
shares of the undistributed net capital gain of the Fund, and (b) would be
deemed to have paid their proportionate shares of the tax paid by the Fund on
the undistributed net capital gain so that the amount of tax deemed paid by each
such shareholder would be credited against the shareholder's United States
federal income tax liability and a refund could be claimed to the extent that
credits exceeded such liability. For United States federal income tax purposes,
the basis of shares of the Fund owned by a shareholder of the Fund (including a
Trust Unit Holder) would be increased by an amount equal to the difference
between the amount of undistributed capital gains required to be so included in
computing such Fund shareholder's long-term capital gains and the tax deemed
paid on such undistributed capital gains by such shareholder in respect of such
shares.
Capital gain distributions, if any, made by the Fund, as a regulated
investment company, are taxable as long-term capital gain, regardless of how
long the Fund shareholder (including a Trust Unit Holder) has held the Fund's
shares, and are not eligible for the dividends received deduction available to
corporations. Other dividend distributions by the Fund may, depending upon the
circumstances, be eligible for such dividends received deduction, in whole or in
part.
Generally, dividends paid by the Fund, as a regulated investment company,
are treated as received by the Trust, and thus its Unit Holders, in the taxable
year in which the distribution is made by the Fund; however, any dividend
declared by the Fund in October, November or December of any calendar year,
payable to shareholders of record on a specific date in such a month and
actually paid during January of the following year, will be treated as received
on December 31 of the preceding year.
Non-taxable Fund distributions reduce the Unit Holder's tax cost basis with
respect to his interest in Fund Shares held by the Trust and are treated as a
gain from the sale of such interest if and to the extent that such distributions
exceed the tax cost basis of the Unit Holder with respect to his interest in
Fund Shares held by the Trust.
Income received by the Fund may be subject to withholding and other taxes
imposed by foreign jurisdictions. In some instances, these taxes are limited by
treaty between the United States and the relevant foreign jurisdiction. Treaty
benefits may be available to the Fund to the same extent as they would be to
individual U.S. shareholders. However, in some situations the Fund will be
eligible for such benefits only if it can establish that a minimum specified
percentage of the capital of the Fund is owned directly or indirectly by
individual residents or citizens of the United States.
The Code places a floor of 2% of adjusted gross income on miscellaneous
itemized deductions, including investment expenses, of individuals (and estates
and trusts other than grantor trusts, to the extent provided in regulations).
The Code also directs the Secretary of the Treasury to issue regulations
prohibiting indirect deductions through a mutual fund or other pass-through
entity of amounts not allowable as a deduction under this rule if paid or
incurred directly by such an investor, but such regulations are not to apply to
indirect deductions through a 'publicly offered regulated investment
B-17
<PAGE>
company,' which the Fund is believed to be. The 2% floor rule will, however,
apply in any event to investment expenses of the Trust, as opposed to the Fund,
and affected Unit Holders should aggregate such expenses with their other
miscellaneous deductions in applying the 2% rule.
The Fund will file its information returns as a 'publicly offered regulated
investment company.' The Trust cannot predict whether or not the Fund will
qualify as a 'publicly offered regulated investment company' for any future
year. The term 'publicly offered regulated investment company' is defined as
meaning a regulated investment company the shares of which are 'continuously
offered' or regularly traded on an established securities market or 'held by or
for no fewer than 500 persons at all times during the taxable year.'
In addition, under the Code, the allowable amount of certain itemized
deductions claimed by individual taxpayers, including investment expenses, is
subject to an overall limitation applicable to individual taxpayers with
adjusted gross income in excess of a $117,950 threshold amount ($58,975 for a
married taxpayer filing separately). The $117,950 (or $58,975) threshold amount
will be indexed for inflation after 1996. The overall limitation reduces the
otherwise allowable amount of the affected itemized deductions by the lesser of
(i) 3% of the adjusted gross income in excess of the threshold amount or (ii)
80% of the amount of otherwise allowable affected itemized deductions. The other
limitations contained in the Code on the deduction of itemized expenses,
including the 2% floor described above, are applied prior to this overall
limitation.
The Code also imposes a 4% excise tax on untaxed undistributed income of
regulated investment companies. If the Fund distributes in each calendar year an
amount equal to the sum of a least 98% of its ordinary income for such calendar
year and 98% of its capital gain net income for the 12 month period ended on
October 31 of each calendar year (or on December 31 if the Fund qualifies to so
elect and does so) and distributes an amount equal to the 2% balances not later
than the close of the succeeding calendar year, the Fund will not be subject to
this 4% excise tax. For purposes of this excise tax, any net long-term capital
gain in excess of net short-term capital loss retained by the Fund for any
fiscal year ending on or before the close of the calendar year but designated as
undistributed capital gains taxable to shareholders as described above is
treated as if distributed to the Fund's shareholders.
The Fund may invest in passive foreign investment companies, various options
and futures contracts and hedging transactions and may write call options and
may be subject to foreign currency fluctuations, all of which have unique
federal income tax consequences. Such investments, options and currency
fluctuations may affect the character, timing and amount of gain or ordinary
income to be recognized by persons holding Fund Shares.
Interest paid by a Unit Holder other than a corporation on indebtedness
properly allocable to Units will be deductible as investment interest to the
extent permitted by Section 163(d) of the Code.
As of the end of each calendar year, the Trustee will furnish to each Unit
Holder an annual statement containing information relating to the dividends
(including capital gain dividends) received or deemed received, rebated 12b-1
fees received from the Sponsor, discount accrued on the Securities, the proceeds
received by the Trust from the disposition of any Security (resulting from
redemption or payment at maturity of any Security or the sale by the Trust of
any Security), and the fees and expenses paid by the Trust.
The foregoing discussion relates only to United States federal income taxes.
Unit Holders may be subject to state, local or foreign taxation.
Investors should consult their tax counsel for advice with respect to their
own particular tax situations.
RETIREMENT PLANS
Units in the Trust may be suitable for purchase by Individual Retirement
Accounts, Keogh Plans, pensions funds and other qualified retirement plans.
Investors considering participation in any such plan should review the laws
specifically related thereto and should consult their attorneys or advisers with
respect to the establishment and maintenance of any such plan.
B-18
<PAGE>
PUBLIC OFFERING OF UNITS
Public Offering Price
The Public Offering Price of the Units during the initial offering period is
computed by adding to the aggregate offering side evaluation of the Treasury
Obligations the aggregate net asset value of Fund Shares in the Trust, dividing
such sum by the number of Units outstanding and then adding a sales charge as
set forth in the table under 'Volume Discount,' herein. Money in the Income and
Principal Accounts other than money required to redeem previously tendered Units
will he added to the Public Offering Price.
After the initial public offering period, the Public Offering Price of the
Units will be computed by adding to the aggregate bid side evaluation of the
Treasury Obligations the aggregate net asset value of Fund Shares in the Trust,
dividing such sum by the number of Units outstanding and then adding a sales
charge as set forth in the table under 'Volume Discount,' herein. Money in the
Income and Principal Accounts other than money required to redeem previously
tendered Units will be added to the Public Offering Price.
The Public Offering Price on the date of this Prospectus or on any
subsequent date will vary from the Public Offering Price set forth in the
'Summary of Essential Information' in accordance with fluctuations in the value
of the Treasury Obligations and net asset value of the Fund Shares in the Trust.
The Public Offering Price shall be determined for the Trust by the Evaluator
in the following manner: the aggregate value of the Units shall be determined
during the initial offering period on the basis of the offering prices of the
Treasury Obligations (determined by the Evaluator) and the net asset value of
the Fund Shares as determined by the Fund, and following the initial offering
period on the basis of the bid prices for the Treasury Obligations (determined
by the Evaluator) and the net asset value of the Fund Shares as determined by
the Fund.
The sales charge consists of an Upfront Sales Charge and a Deferred Sales
Charge. The Upfront Sales Charge is computed by deducting the Deferred Sales
Charge from the aggregate sales charge. The Upfront Sales Charge is added to the
purchase price at the time of purchase. The Deferred Sales Charge will be paid
through quarterly deductions of $4.33 per 100 Units resulting from the sale of
Fund Shares on the Deferred Sales Charge Deduction Dates as shown in the Summary
of Essential Information. To the extent the entire Deferred Sales Charge has not
been so deducted at the time of repurchase, redemption or exchange of the Units,
any unpaid amount will be deduced from the proceeds or in calculating an in kind
distribution. For purchases of Units with a value of $100,000 or more, the sales
charge is the amount shown below under 'Volume Discount.' Unit Holders acquiring
Units of the Trust pursuant to an exchange of units of a different unit
investment trust will be subject to a reduced sales charge which may include an
initial sales charge at the time of the exchange and a Deferred Sales Charge.
On a recent date, the Public Offering Price per Unit (based on the offering
side evaluation of the Treasury Obligations and the net asset value of Fund
Shares in the Trust) exceeded the Redemption Price and the Sponsor's Secondary
Market Repurchase Price per Unit (each based upon the bid side evaluation of the
Treasury Obligations and the net asset value of Fund Shares in the Trust less
the Deferred Sales Charge) by the amounts set forth in 'Summary of Essential
Information.'
Public Distribution
During the initial public offering period Units will be distributed to the
public by the Sponsor and through dealers at the Public Offering Price,
calculated on each business day. The initial public offering period may be
extended by the Sponsor so long as additional deposits are being made or Units
remain unsold. Upon termination of the initial offering period, in each case,
unsold Units or Units acquired by the Sponsor in the secondary market referred
to below may be offered to the public by this Prospectus at the then current
Public Offering Price calculated daily.
The Sponsor intends to qualify Units in states selected by the Sponsor for
sale by the Sponsor and through dealers who are members of the National
Association of Securities Dealers, Inc. Sales to dealers will be made at prices
which include a concession of 65%-78% of the total sales charge per Unit, but
subject to change from time to time at the discretion of the Sponsor (such price
does not include volume purchase discounts, which are available only to
non-dealer purchasers). The Sponsor reserves the right to reject, in whole or in
part, any order for the purchase of Units.
Sales by a dealer will be aggregated with the dealer receiving the greatest
concession level for all Units sold by such dealer up to a maximum of 78% of the
sales load.
B-19
<PAGE>
Secondary Market
While not obligated to do so, it is the Sponsor's present intention to
maintain a secondary market for Units and to continuously offer to repurchase
Units from Unit Holders at the applicable Sponsor's Repurchase Price (see
'Summary of Essential Information'). The Sponsor's Repurchase Price is computed
by adding to the aggregate of the bid side evaluation of the Treasury
Obligations the net asset value of Fund Shares in the Trust, and cash on hand in
the Trust and dividends receivable on Fund Shares (other than cash deposited by
the Sponsor for the purchase of Securities), deducting therefrom amounts
required to redeem previously tendered Units and amounts required for
distribution to Unit Holders of record as of a date prior to the evaluation,
accrued expenses of the Trustee, Evaluator, and counsel, taxes and governmental
charges, if any, any Deferred Sales Charge balance and any Reserve Account and
then dividing the resulting sum by the number of Units outstanding, as of the
date of such computation. There is no sales charge incurred when a Unit Holder
sells Units back to the Sponsor other than the payment of any Deferred Sales
Charge balance payable. Any Units repurchased by the Sponsor at the Sponsor's
Repurchase Price may be reoffered to the public by the Sponsor at the then
current Public Offering Price. Any profit or loss resulting from the resale of
such Units will be for the account of the Sponsor.
If the supply of Units exceeds demand (or for any other business reason),
the Sponsor may, at any time, occasionally, from time to time, or permanently,
discontinue the repurchase of Units of this Series at the Sponsor's Repurchase
Price, without notice. In such event, although under no obligation to do so, the
Sponsor may, as a service to Unit Holders, offer to repurchase Units at the
'Redemption Price,' a price based on the current bid prices for the Treasury
Obligations and the net asset value of the Fund Shares. Alternatively, Unit
Holders may redeem their Units through the Trustee.
Profit of Sponsor
The Sponsor receives a sales charge on the Units as indicated herein in the
chart below under 'Volume Discount.' The Sponsor will receive payments from AFD
based on the amount of Units sold. On the sale of Units to dealers, the Sponsor
will retain the difference between the dealer concession and the sales charge
(see 'Public Distribution').
The Sponsor may have also realized a profit (or sustained a loss) on the
deposit of the Treasury Obligations in the Trust representing the difference
between the cost of the Treasury Obligations to the Sponsor and the cost of the
Treasury Obligations to the Trust. The Sponsor will deposit all Fund Shares into
the Trust at net asset value. During the initial offering period, to the extent
additional Units continue to be issued and offered for sale to the public, the
Sponsor may realize additional profit (or sustain a loss) due to daily
fluctuations in the offering prices of the Treasury Obligations and in the net
asset value of the Fund Shares in the Trust and thus in the Public Offering
Price of Units received by the Sponsor. Cash, if any, received by the Sponsor
from the Unit Holders prior to the settlement date for purchase of Units or
prior to the payment for Securities upon their delivery may be used in the
Sponsor's business to the extent permitted by applicable regulations and may be
of benefit to the Sponsor.
The Sponsor may also realize profits (or sustain losses) while maintaining a
secondary market in the Units, in the amount of any difference between the
prices at which the Sponsor buys Units and the prices at which the Sponsor
resells such Units or the prices at which the Sponsor redeems such Units, as the
case may be.
Volume Discount
Although under no obligation to do so, the Sponsor intends to permit volume
purchasers of Units to purchase Units at a reduced sales charge. The Sponsor may
at any time upon prior notice to Unit Holders change the amount by which the
sales charge is reduced, or may discontinue the discount altogether.
The sales charge for the Trust will be reduced pursuant to the following
schedule for sales to any person of Units with a value of $100,000 or more. The
sales charge in the secondary market consists of an Upfront Sales Charge and the
remaining portions of the Deferred Sales Charge. The sales charge will not be
less than the remaining portion of the Deferred Sales Charge.
B-20
<PAGE>
<TABLE>
<CAPTION>
Percent of Percent of
Public Offering Net Amount
Purchases Price Invested
- ---------------------------------------- --------------- ----------
<S> <C> <C>
Less than $100,000...................... 5.00%* 5.263%*
$100,000 or more........................ 4.00* 4.167*
</TABLE>
- ---------------
* The Upfront Sales Charge will equal the difference between the amount of the
total sales charge and any unpaid DSC.
The reduced sales charges as shown on the chart above will apply to such
purchases of Units in any fourteen-day period which qualify for the volume
discount by the same person, including a partnership or corporation, other than
a dealer, in the amounts stated herein, and for this purpose, purchases of Units
of this Trust will be aggregated with concurrent purchases of Units of any other
trust that may be offered by the Sponsor. Units held in the name of the
purchaser's spouse or in the name of a purchaser's child under such age of 21
are deemed for the purposes hereof to be registered in the name of the
purchaser. The reduced sales charges are also applicable to a trustee or other
fiduciary, including a partnership or corporation, purchasing Units for a single
trust estate or single fiduciary account.
Employee Discount
The Sponsor intends, at the discretion of the Sponsor, to permit employees
of Prudential Securities Incorporated and its subsidiaries and affiliates to
purchase Units of the Trust at a price based on the offering side evaluation of
such Treasury Obligations and the net asset value of Fund Shares in the Trust
plus a reduced sales charge equal to the Deferred Sales Charge per Unit, subject
to a limit of 5% of the Units.
EXCHANGE OPTION
Unit Holders may elect to exchange any or all of their Units of this Series
of the Government Securities Equity Trust for units of one or more of any other
series in the Prudential Securities Incorporated family of unit investment
trusts (except Series of Government Securities Equity Trust) or for any units of
any additional trusts that may from time to time be made available for such
exchange by the Sponsor (collectively referred to as the 'Exchange Trusts').
Such units may be acquired at prices based on reduced sales charges per unit.
The purpose of such reduced sales charge is to permit the Sponsor to pass on to
the Unit Holder who wishes to exchange Units the cost savings resulting from
such exchange of Units. The cost savings result from reductions in the time and
expense related to advice, financial planning and operational expense required
for the Exchange Option.
Exchange Trusts may have different investment objectives; a Unit Holder
should read the prospectus for the applicable Exchange Trust carefully to
determine its investment objective prior to exercise of this option.
This option will be available provided the Sponsor maintains a secondary
market in both the Units of this Series and units of the applicable Exchange
Trust and provided that units of the applicable Exchange Trust are available for
sale and are lawfully qualified for sale in the jurisdiction in which the Unit
Holder is a resident. While it is the Sponsor's present intention to maintain a
secondary market for the units of all such trusts, there is no obligation on its
part to do so. Therefore, there is no assurance that a market for units will in
fact exist on any given date on which a Unit Holder wishes to sell or exchange
his Units; thus there is no assurance that the Exchange Option will be available
to any Unit Holder. The Sponsor reserves the right to modify, suspend or
terminate this option at any time without further notice to Unit Holders (in the
case of Units subject to a DSC, sixty days' notice will be given prior to the
date of the termination of, or material amendment to, the Exchange Option except
that no notice need be given under certain circumstances). In the event the
Exchange Option is not available to a Unit Holder at the time he wishes to
exercise it, the Unit Holder will be immediately notified and no action will be
taken with respect to his Units without further instruction from the Unit
Holder.
To exercise the Exchange Option, a Unit Holder should notify the Sponsor of
his desire to exchange his Units for one or more units of the Exchange Trusts.
Upon the exchange of Units of the Trust, any Deferred Sales Charge balance will
be deducted from the exchange proceeds. If units of the applicable outstanding
series of the Exchange Trust are at that time available for sale, the Unit
Holder may select the series or group of series for which he desires his Units
to be exchanged. The Unit Holder will be provided with a current prospectus or
prospectuses relating to each series in which he indicates interest.
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Units of the Exchange Trust trading in the secondary market maintained by
the Sponsor, if so maintained, will be sold to the Unit Holder at a price equal
to the evaluation price per unit of the securities in that portfolio and the
applicable sales charge of $15* per unit of the Exchange Trust. The reduced
sales charge for units of any Exchange Trust acquired during the initial
offering period for such units will result in a price for such units equal to
the offering side evaluation per unit of the securities in the Exchange Trust's
portfolio plus accrued interest plus a reduced sales charge of $25* per Exchange
Trust unit. The reduced sales charge for a unit holder of an Exchange Trust
exchanging into this series of Government Securities Equity Trust will be $.23
per Unit for Units purchased in the secondary market and $.37 per Unit for Units
purchased during the initial offering period. Exchange transactions will be
effected only in whole units; thus, any proceeds not used to acquire whole units
will be paid to the exchanging Unit Holder unless the Unit Holder adds the
amount of cash necessary to purchase one additional whole Exchange Trust unit.
Owners of units of any registered unit investment trust, other than
Prudential Securities Incorporated sponsored trusts, which was initially offered
at a minimum applicable sales charge of 3.0% of the public offering price
exclusive of any applicable sales charge discounts, may elect to apply the cash
proceeds of sale or redemption of those units directly to acquire units of any
Exchange Trust trading in the secondary market at the reduced sales charge of
$20 per Unit, subject to the terms and conditions applicable to the Exchange
Option. To exercise this option, the owner should notify his retail broker. He
will be given a prospectus of each series in which he indicates interest, units
of which are available. The Sponsor reserves the right to modify, suspend or
terminate the option at any time without further notice, including the right to
increase the reduced sales charge applicable to this option (but not in excess
of $5 more per unit than the corresponding fee then charged for a unit of an
Exchange Trust which is being exchanged).
For example, assume that a Unit Holder, who has three units of a Trust with
a 4.25% sales charge and a current price of $1,100 per unit, sells his units and
exchanges the proceeds for units of a series of an Exchange Trust with a current
price of $950 per unit and an ordinary sales charge of 4.25%. The proceeds from
the Unit Holder's units will aggregate $3,300. Since only whole units of an
Exchange Trust may be purchased under the Exchange Option, the Holder would be
able to acquire four units in the Exchange Trust for a total cost of $3,860
($3,800 for units and $60 for the $15 per unit sales charge) by adding an extra
$560 in cash. Were the Unit Holder to acquire the same number of units at the
same time in the regular secondary market maintained by the Sponsor, the price
would be $3,968.68, [$3,800 for the units and $168.68 for the 4.25% sales charge
(4.439% of the net amount invested)].
Federal Income Tax Consequences
An exchange of Units pursuant to the Exchange Option will constitute a
'taxable event' under the Code, i.e., a Unit Holder will recognize gain or loss
at the time of the exchange except that upon an exchange of Units of this Series
of the Government Securities Equity Trust for units of any other series of the
Exchange Trusts which are grantor trusts for United States federal income tax
purposes the Internal Revenue Service may seek to disallow any loss incurred
upon such exchange to the extent that the underlying securities in each trust
are substantially identical and the purchase of units of an Exchange Trust takes
place less than thirty-one days after the sale of the Units. Unit Holders are
advised to consult their own tax advisors as to the tax consequences of
exchanging Units in their particular case. In particular, Unit Holders who
exchange Units of this Series of the Government Securities Equity Trust for
units of any other series of Exchange Trusts within 91 days of acquisition of
the Units should consult their tax advisors as to the possible application of
Section 852(f) of the Code to the exchange.
REINVESTMENT OF TRUST DISTRIBUTIONS
Distributions by the Trust, if any, of dividend income received by the
Trust, 12b-1 fee amounts paid by the Sponsor, distributions of any net capital
gains received in respect of Fund Shares and proceeds of the sale of Fund Shares
not used to redeem Units, net of Trust expenses, will be made quarterly on or
shortly after the Quarterly Distribution Date to Unit Holders of record on the
Quarterly Record Date immediately preceding such Quarterly Distribution Date. A
Unit Holder will receive such amounts in cash unless such Unit Holder directs
The Chase Manhattan Bank, acting as distribution agent, to invest such amounts
on behalf of the participating Unit Holder in Fund Shares at such shares' net
asset value, which shares will be subject to 12b-1 expenses. Investment in Fund
Shares is conditioned upon their lawful
- ------------
* In the case of Units subject to a DSC, the exchange sales charge will be
the remaining DSC if greater than the applicable reduced sales charge ($15, $20
or $25) or if the remaining DSC is less than applicable reduced sales charge,
the Unit will be subject to the remaining DSC and the sales charge payable at
the time of the exchange will be the difference between the amount of the
reduced sales charge and the remaining DSC.
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<PAGE>
qualification for sale in the jurisdiction in which the Unit Holder resides.
There can be no assurance, however, that such qualification will be obtained.
The appropriate prospectus will be sent to the Unit Holder. A Unit Holder's
election to participate in a reinvestment program will apply to all Units of the
Trust owned by such Unit Holder. The Unit Holder should read the prospectus for
the Fund carefully before deciding to participate.
EXPENSES AND CHARGES
Expenses
All or a portion of the Organizational expenses and charges incurred in
connection with the establishment of the Trust including the cost of the
preparation, printing and execution of the Indenture, Registration Statement and
other documents relating to the Trust, Federal and State registration fees and
costs, the initial fees and expenses of the Trustee, legal and auditing expenses
and other out-of-pocket expenses, will be paid by the Trust. Historically, the
costs of establishing unit investment trusts have been borne by a trust's
sponsor. Advertising and selling expenses will be paid by the Sponsor and the
underwriters, if any, at no cost to the Trust.
Fees
The Trustee will receive for its services under the Indenture an annual fee
in the amount set forth in the 'Summary of Essential Information.'
For each evaluation of the Treasury Obligations in the Trust, the Evaluator
shall receive a fee as set forth in the 'Summary of Essential Information.'
The Trustee's fees, Evaluator's fees and Trust expenses are payable
quarterly on or before each Distribution Date from the Income Account, to the
extent funds are available therein and thereafter from the Principal Account.
Any of such fees may be increased without approval of the Unit Holders 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 Agreement.
Other Charges
The following additional charges are or may be incurred by the Trust as more
fully described in the Indenture: (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 Trust and
the rights and interests of the Unit Holders, (e) indemnification of the Trustee
for any loss, liability or expenses incurred by it in the administration of the
Trust without negligence, bad faith, willful misfeasance or willful misconduct
on its part or reckless disregard of its obligations and duties, (f)
indemnification of the Sponsor for any losses, liabilities and expenses incurred
in acting as Sponsor or Depositor under the Indenture without gross negligence,
bad faith, willful misfeasance or willful misconduct or reckless disregard of
its obligations and duties, (g) expenditures incurred in contacting Unit Holders
upon termination of the Trust and (h) to the extent then lawful, expenses
(including legal, auditing and printing expenses) of maintaining registration or
qualification of the Units and/or the Trust under Federal or State securities
laws subsequent to initial registration so long as the Sponsor is maintaining a
market for the Units. The accounts of the Trust will be audited not less
frequently than annually by independent public accountants selected by the
Sponsor. The cost of such audit will be an expense of the Trust.
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<PAGE>
The fees and expenses set forth herein are payable out of the Trust and when
paid by or owing to the Trustee are secured by a lien on the Trust. If the cash
dividend, capital gains distributions and 12b-1 fee payments made by the Sponsor
to the Trust are insufficient to provide for amounts payable by the Trust, the
Trustee has the power to sell Fund Shares (not Treasury Obligations) to pay such
amounts. To the extent Fund Shares are sold, the size of the Trust will be
reduced and the proportions of the types of Securities will change. Such sales
might be required at a time when Fund Shares would not otherwise be sold and
might result in lower prices than might otherwise be realized. Moreover, due to
the minimum amount in which Fund Shares may be required to be sold, the proceeds
of such sales may exceed the amount necessary for the payment of such fees and
expenses. If the cash dividends, capital gains distributions and 12b-1 fee
payments made by the Sponsor to the Trust and proceeds of Fund Shares sold after
deducting the ordinary expenses are insufficient to pay the extraordinary
expenses of the Trust, the Trustee has the power to sell Treasury Obligations to
pay such extraordinary expenses.
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<PAGE>
Government Securities Equity Trust
REINVESTMENT APPLICATION
I/We hereby authorize and direct The Chase Manhattan Bank to apply all
distributions that I/we have elected to be reinvested as a registered
unitholder(s) of a Government Securities Equity Trust Series towards the
purchase of Class A shares of the Alliance Technology Fund, Inc.
I/We hold Government Securities Equity Trust Series 9
(This Series can only reinvest into Class A shares of the Alliance
Technology Fund, Inc.)
The authorization shall continue in effect until written notice of revocation is
given by the certificate holder or his personal representatives.
<TABLE>
<S> <C>
Name(s) in Which Unit Trust is Registered
Social Security or Tax Identification Number
Signature DATE
Signature of Joint Tenant (if any) DATE
My/Our Brokerage Firm Is:
My/Our Account Number Is:
</TABLE>
Forward application to: The Chase Manhattan Bank
P.O. Box 888--Cooper Station
New York, NY 10276
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
RIGHTS OF UNIT HOLDERS
Certificates
Ownership of Units is evidenced by registered certificates executed by the
Trustee and the Sponsor. Certificates are transferable or interchangeable upon
presentation at the corporate trust office of the Trustee, properly endorsed or
accompanied by an instrument of transfer satisfactory to the Trustee and
executed by the Unit Holder or his authorized attorney, together with the
payment of $2.00, if required by the Trustee (not currently required), or such
other amount as may be determined by the Trustee and approved by the Sponsor,
and any other tax or governmental charge imposed upon the transfer of
Certificates. The Trustee will replace any mutilated, lost, stolen or destroyed
Certificate upon proper identification, satisfactory indemnity and payment of
charges incurred. Any mutilated Certificate must be presented to the Trustee
before any substitute Certificate will be issued.
Certain Limitations
The death or incapacity of any Unit Holder will not operate to terminate the
Trust nor entitle the legal representatives or heirs of such Unit Holder to
claim an accounting or to take any other action or proceeding in any court for a
partition or winding up of the Trust.
No Unit Holder shall have the right to vote except with respect to removal
of the Trustee or amendment and termination of the Trust as prescribed in the
Indenture (see 'Administration of the Trust--Amendment' and 'Administration of
the Trust--Termination'). Unit Holders shall have no right to control the
operation or administration of the Trust in any manner.
Distributions
The terms of the Treasury Obligations do not provide for periodic payment to
the holders thereof of the annual accrual of discount. To the extent that
dividends, distributions and/or 12b-1 fee payments from the Sponsor become
payable with respect to the Fund Shares held in the Trust, the Trustee will
collect such amounts as they become payable and credit such amounts to a
separate Income Account created pursuant to the Indenture. All other moneys
received by the Trustee with respect to the Fund Shares shall be credited to the
Principal Account. Quarterly distributions to each Unit Holder of record as of
the immediately preceding Quarterly Record Date will be made on the next
following Quarterly Distribution Date and shall consist of an amount
substantially equal to such Unit Holder's pro rata share of the distributable
cash balances in the Income Account and the Principal Account, if any, computed
as of the close of business on such Quarterly Record Date. No quarterly
distribution will be made if the amount available for distribution is less than
$2.50 per 100 Units, except that, no less than once a year, on a Quarterly
Distribution Date or such other date designated by the Sponsor, the Trustee
shall distribute the entire cash balances in the Principal and Income Accounts.
All funds collected or received will be held by the Trustee in trust without
interest to Unit Holders as part of the Trust until required to be disbursed in
accordance with the provisions of the Indenture. Such funds will be segregated
by separate recordation on the trust ledger of the Trustee so long as such
practice preserves a valid preference of Unit Holders under the bankruptcy laws
of the United States, or if such preference is not preserved, the Trustee shall
handle such funds in such other manner as shall constitute the segregation and
holding thereof in trust within the meaning of the Investment Company Act of
1940, as the same may be from time to time amended. To the extent permitted by
the Indenture and applicable banking regulations, such funds are available for
use by the Trustee pursuant to normal banking procedures.
The Trustee is authorized by the Indenture to withdraw from the Principal
Account to the extent funds are not sufficient in the Income Account such
amounts as it deems necessary to pay the expenses of the Trust. (see 'Expenses
and Charges'). The Trustee may also withdraw from said accounts such amounts, if
any, as it deems necessary to establish a reserve for any taxes or other
governmental charges that may be payable out of the Trust. Amounts so withdrawn
shall not be considered a part of a Trust's assets for purposes of determining
the amount of distributions until such time as the Trustee shall return all or
any part of such amounts to the appropriate account. In addition, the Trustee
may withdraw from the Income Account, to the extent available, that portion of
the Redemption Price which represents income.
The balance paid on any redemption, including income, if any, shall be
withdrawn from the Principal Account of the Trust to the extent that funds are
available. If such available balance is insufficient, the Trustee is empowered
to sell Securities in order to provide moneys for redemption of Units tendered
(see 'Rights of Unit Holders--Redemption').
It is anticipated that the net asset value per Unit will be reduced
quarterly by the quarterly payment of the deferred sales charge. Distributions
of amounts necessary to pay the deferred portion of the sales charge will be
made to an
B-25
<PAGE>
account maintained by the Trustee for purposes of satisfying Unit Holders'
deferred sales charge obligations. Fund Shares will be sold to pay the deferred
sales charge to the Sponsor on each Deferred Sales Charge Deduction Date set
forth in the Summary of Essential Information and to pay Trust organizational
costs.
Reports and Records
With each distribution, the Trustee will furnish to the Unit Holders a
statement of the amounts of dividends and other receipts, if any, expressed in
each case as a dollar amount per Unit.
Within a reasonable time after the end of each calendar year, the Trustee
will furnish to each person who was a Unit Holder of record at any time during
the calendar year a statement setting forth: (1) as to the Income Account:
dividends and other cash amounts received, deductions for payment of applicable
taxes and for fees and expenses of the Trust, redemptions of Units, and the
balance remaining after such distributions and deductions, expressed both as a
total dollar amount and as a dollar amount representing pro rata share of each
Unit outstanding on the last business day of such calendar year; (2) as to the
Principal Account: the dates of disposition and identity of any Securities and
the net proceeds received therefrom, deductions for payments of applicable taxes
and for fees and expenses of the Trust, for payment of the Deferred Sales Charge
and redemptions of Units, 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 of each Unit outstanding on the last business
day of such calendar year; (3) a list of Securities held and the number of Units
outstanding on the last business day of such calendar year; (4) the Redemption
Price per Unit based upon the last computation thereof made during such calendar
year; (5) amounts actually distributed during such calendar year from the Income
Account and from the Principal Account, separately stated, expressed both as
total dollar amounts and as dollar amounts representing the pro rata share of
each Unit outstanding on the last business day of such calendar year; and (6) an
annual report of original issue discount accrual.
The Trustee shall keep available for inspection by Unit Holders at all
reasonable times during usual business hours books of record and account of its
transactions as Trustee, including records of the names and addresses of Unit
Holders, a current list of Securities in the portfolio and a copy of the
Indenture.
Redemption
Tender of Units
Units may be tendered to the Trustee for redemption at its unit investment
trust office at 4 New York Plaza, New York, New York 10004, upon delivery of a
request for redemption and the Certificates for the Units requested to be
redeemed and payment of any relevant tax. At the present time there are no
specific taxes related to the redemption of the Units. No redemption fee will be
charged by the Sponsor or the Trustee. Units redeemed by the Trustee will be
cancelled.
Certificates for Units to be redeemed must be properly endorsed or
accompanied by a written instrument of transfer, although redemptions without
the necessity of Certificate presentation will be effected for record Unit
Holders for whom Certificates have not been issued. Unit Holders must sign
exactly as their name appears on the face of the Certificate with the signature
guaranteed by an officer of a national bank or trust company or by a member firm
of either the New York, Midwest or Pacific Stock Exchanges or other financial
institution acceptable to the Trustee, if any. 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.
Within seven calendar days following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto, the Unit
Holder will be entitled to receive in cash an amount for each Unit tendered
equal to the Redemption Price per Unit computed as of the Evaluation Time set
forth in the 'Summary of Essential Information' on the date of tender (see
'Redemption--Computation of Redemption Price per Unit.') The 'date of tender' is
deemed to be the date on which 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 such Exchange is open for trading, and such Units will be deemed to
have been tendered to the Trustee on such day for redemption at the Redemption
Price computed on that day.
There is no sales charge incurred when a Unit Holder tenders his Units to
the Trustee for redemption, however, any unpaid DSC will reduce the redemption
proceeds. All amounts paid on redemption representing income will be withdrawn
from the Income Account to the extent moneys are available; all other amounts
will be paid from the Principal Account. The Trustee is required by the
Indenture to sell Fund Shares and Treasury Obligations, to the extent possible
in
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<PAGE>
the same ratio as the ratio of Fund Shares and Treasury Obligations then held in
the Trust, in order to provide money for redemption of Units tendered. To the
extent Securities are sold, the size of the Trust will be reduced. Such sales
could result in a loss to the Trust. The redemption of a Unit for cash will
constitute a taxable event for the Unit Holder under the Code (see 'Tax Status
of the Trust').
Purchase by the Sponsor of Units Tendered for Redemption
The Indenture requires that the Trustee notify the Sponsor of any tender of
Units for redemption. So long as the Sponsor is maintaining a bid in the
secondary market, the Sponsor, prior to the close of business on the second
succeeding business day, may purchase any Units tendered to the Trustee for
redemption at the price so bid by making payment therefor to the Unit Holder in
an amount not less than the Redemption Price and not later than the day on which
the Units would otherwise have been redeemed by the Trustee, i.e., the Unit
Holder will receive the Redemption Price from the Sponsor within 7 days of the
date of tender (see 'Public Offering of Unit--Secondary Market'). Units held by
the Sponsor may be tendered to the Trustee for redemptions as any other units.
The price of any Units resold by the Sponsor will be the Public Offering Price
determined in the manner provided in this Prospectus (see 'Public Offering of
Units--Public Offering Price'). Any profit resulting from the resale of such
Units will belong to the Sponsor, which likewise will bear any loss resulting
from a reduction in the offering or redemption price subsequent to its
acquisition of such Units (see 'Public Offering of Units--Profit of Sponsor').
Computation of Redemption Price per Unit
The Redemption Price per Unit is determined as of the Evaluation Time on the
date any such determination is made. The Redemption Price is each Unit's pro
rata share, determined by the Trustee, of the sum of:
(1) the aggregate bid side evaluation of the Treasury Obligations in the
Trust, as determined by the Evaluator, and the net asset value of the Fund
Shares in the Trust determined as of the Evaluation Time set forth in the
'Summary of Essential Information'; and
(2) cash on hand in the Trust and dividends receivable on Fund Shares
(other than cash deposited by the Sponsor for the purchase of Securities);
less amounts representing (a) accrued taxes and governmental charges payable out
of the Trust, (b) the accrued expenses of the Trust, and (c) cash held with
respect to previously tendered Units or for distribution to Unit Holders of
record as of a date prior to the evaluation, (d) any Deferred Sales Charge
balance and (e) any Reserve Account ('Redemption Price').
The right of redemption may be suspended and payment of the Redemption Price
per Unit postponed for more than seven calendar days following a tender of Units
for redemption for any period during which the New York Stock Exchange is
closed, other than for weekend and holiday closing, or trading on that Exchange
is restricted or during which (as determined by the Securities and Exchange
Commission) an emergency exists as a result of which 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. Neither the Trustee nor
the Sponsor is liable to any person or in any way for any loss or damage that
may result from any such suspension or postponement.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION PRICE
While the Public Offering Price of Units during the initial offering period
is determined on the basis of the current offering prices of the Treasury
Obligations and the net asset value for Fund Shares, the Public Offering Price
of Units in the secondary market and the Redemption Price of Units are
determined on the basis of the current bid prices of the Treasury Obligations
and the net asset value of the Fund Shares. On a recent date, the Public
Offering Price (which includes a sales charge) exceeded the Redemption Price by
the amount indicated under 'Summary of Essential Information.' The bid prices
for the Securities are expected to be less than the offering prices. The amount
realized by a Unit Holder upon any redemption of Units may be less than the
price paid by him for such Units.
SPONSOR
Prudential Securities Incorporated ('Prudential Securities') is a Delaware
corporation and is engaged in the underwriting, securities and commodities
brokerage business and is a member of the New York Stock Exchange, Inc., other
major securities exchanges and commodities exchanges and the National
Association of Securities Dealers, Inc. Prudential Securities, a wholly owned
subsidiary of Prudential Securities Group Inc. and an indirect wholly owned
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<PAGE>
subsidiary of The Prudential Insurance Company of America, is engaged in the
investment advisory business. Prudential Securities has acted as principal
underwriter and managing underwriter of other investment companies. In addition
to participating as a member of various selling groups or as an agent of other
investment companies, Prudential Securities executes orders on behalf of
investment companies for the purchase and sale of securities of such companies
and sells securities to such companies in its capacity as a broker-dealer in
securities.
Limitations on Liability
The Sponsor is liable for the performance of its obligation's arising from
its responsibilities under the Indenture, but will be under no liability to Unit
Holders for taking any action or refraining from taking any action in good faith
or for errors in judgment and will not be responsible in any way for any
default, failure of defect in any Security or for depreciation or loss incurred
by reason of the sale of any Securities, except in cases of willful misfeasance,
bad faith, gross negligence or reckless disregard for its obligations and duties
(see 'Sponsor--Responsibility').
Responsibility
The Trust is not a managed registered investment company. Securities will
not be sold by the Trustee to take advantage of ordinary market fluctuations.
Although the Sponsor and Trustee do not presently intend to dispose of
Securities, the Indenture permits the Sponsor to direct the Trustee to dispose
of any Security in the Trust for the purpose of redeeming Units tendered for
redemption and to dispose of Fund Shares to pay Trust expenses, Trust
organizational costs and the Deferred Sales Charge.
The proceeds resulting from the disposition of any Security in the Trust
will be distributed as set forth under 'Rights of Unit Holders--Distributions'
to the extent such proceeds are not utilized for the purpose of redeeming Units
or paying Trust expenses.
Resignation
If at any time the Sponsor shall resign under the Indenture or shall fail to
perform or be incapable of performing its duties thereunder or shall become
bankrupt or its affairs are taken over by public authorities, the Indenture
directs the Trustee to either (1) appoint a successor Sponsor or Sponsors at
rates of compensation deemed reasonable by the Trustee not exceeding amounts
prescribed by the Securities and Exchange Commission, (2) acts as Sponsor itself
without terminating the Trust or (3) terminate the Trust. The Trustee will
promptly notify Unit Holders of any such action.
TRUSTEE
The Trustee is The Chase Manhattan Bank, a national banking association with
its principal executive office located at 270 Park Avenue, New York, New York
10017 and its unit investment trust office at 4 New York Plaza, New York, New
York 10004. The Trustee is subject to supervision by the Comptroller of the
Currency, the Federal Deposit Insurance Corporation and the Board of Governors
of the Federal Reserve System. In connection with the storage and handling of
certain Securities deposited in the Trust, the Trustee may use the services of
The Depository Trust Company. These services may include safekeeping of the
Securities and coupon-clipping, computer book-entry transfer and institutional
delivery services. The Depository Trust Company is a limited purpose trust
company organized under the Banking Law of the State of New York, a member of
the Federal Reserve System and a clearing agency registered under the Securities
Exchange Act of 1934.
Limitations on Liability
The Trustee shall not be liable or responsible in any way for depreciation
or loss incurred by reason of the disposition of any moneys, Securities or
Certificates or in respect of any evaluation or for any action taken in good
faith reliance on prima facie properly executed documents except in cases of
willful misfeasance, bad faith, negligence or reckless disregard for its
obligations and duties. In addition, the Indenture provides that the Trustee
shall not be personally liable for any taxes or other governmental charges
imposed upon or in respect of the Trust which the Trustee may be required to pay
under current or future laws of the United States or any other taxing authority
having jurisdiction.
Responsibility
The Trustee shall not be liable for any default, failure or defect in any
Security or for any depreciation or loss by reason of any such sale of Fund
Shares or by reason of the failure of the Sponsor to give directions to the
Trustee.
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<PAGE>
Additionally, the Trustee may sell Securities designated by the Sponsor, or
if not so directed, in its own discretion, for the purpose of redeeming Units
tendered for redemption. Fund shares will be sold first unless the Sponsor is
able to sell Treasury Obligations and Fund Shares in the proportionate
relationship between the maturity values of the Treasury Obligations and the
number of Fund Shares.
Amounts received by the Trust upon the sale of any Security under the
conditions set forth above will be deposited in the Principal Account when
received and to the extent not used for the redemption of Unites or for payment
of the DSC will be distributable by the Trustee to Unit Holders of record on the
Quarterly Record Date next prior to a Quarterly Distribution Date.
For information relating to the responsibilities of the Trustee under the
Indenture, reference is also made to the material set forth under 'Rights of
Unit Holders' and 'Sponsor--Resignation.'
Resignation
By executing an instrument in writing and filing the same with the Sponsor,
the Trustee and any successor may resign. In such an event the Sponsor is
obligated to appoint a successor trustee as soon as possible. If the Trustee
becomes incapable of acting or becomes bankrupt or its affairs are taken over by
the public authorities, the Sponsor may remove the Trustee and appoint a
successor as provided in the Indenture. The Sponsor may also remove the Trustee
if it determines (i) that a material deterioration in the creditworthiness of
the Trustee or (ii) one or more negligent acts on the part of the Trustee having
a materially adverse effect has occurred such that the replacement of the
Trustee is in the best interest of the Unit Holders. Such resignation or removal
shall become effective upon the acceptance of appointment by the successor
trustee. If upon resignation of a trustee no successor has been appointed and
has accepted the appointment within thirty days after notification, the retiring
trustee may apply to a court of competent jurisdiction for the appointment of a
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. A successor trustee has the
same rights and duties as the original trustee except to the extent, if any,
that the Indenture is modified as permitted by its terms.
EVALUATOR
The Evaluator is Kenny S&P Evaluation Services, a division of J.J. Kenny
Co., Inc., with main offices located at 65 Broadway, New York, New York 10006.
Limitations on Liability
The Trustee, Sponsor and Unit Holders 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 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 Trustee, Sponsor or Unit
Holders for errors in judgement. The Evaluator shall, however, be liable for its
own willful misfeasance, bad faith, gross negligence or reckless disregard of
its obligations and duties under the Indenture.
Responsibility
The Indenture requires the Evaluator to evaluate the Treasury Obligations on
the basis of their bid prices on the last business day of June and December in
each year, on the day on which any Unit is tendered for redemption and on any
other day such evaluation is desired by the Trustee or is requested by the
Sponsor. For information relating to the responsibility of the Evaluator to
evaluate the Treasury Obligations, see 'Public Offering of Units--Public
Offering Price.'
Resignation
The Evaluator may resign or may be removed by the Sponsor, and the Sponsor
is to use its best efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment by the
successor Evaluator. If upon resignation of the Evaluator no successor accepts
appointment within thirty days after notice of resignation, the Evaluator may
apply to a court of competent jurisdiction for the appointment of a successor.
B-29
<PAGE>
AMENDMENT AND TERMINATION OF THE INDENTURE
Amendment
The Indenture may be amended by the Trustee and the Sponsor without the
consent of Unit Holders (a) to cure any ambiguity or to correct or supplement
any provision thereof which may be defective or inconsistent, (b) to change any
provision thereof as may be required by the Securities and Exchange Commission
or any successor governmental agency, and (c) to make sure other provisions as
shall not adversely affect the interest of the Unit Holders: provided that the
Indenture may also be amended by the Sponsor and the Trustee with the consent of
Unit Holders evidencing 51% of the Units at the time outstanding for the
purposes of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of modifying in any manner the rights
of Unit Holders. In no event shall the Indenture be amended so as to increase
the number of Units issuable thereunder except as the result of the additional
deposits of Securities, to permit the deposit of Securities after the Date of
Deposit except in accordance with the terms and conditions of the Indenture as
initially adopted, to permit any other acquisition of securities or other
property by the Trustee either in addition to or in substitution for any of the
Securities on hand in the Trust or to permit the Trustee to vary the investment
of the Unit Holders or to empower the Trustee to engage in business or to engage
in investment activities not specifically authorized in the Indenture as
originally adopted: or so as to adversely affect the characterization of the
Trust as a grantor trust for Federal income tax purposes. In the event of any
amendment, the Trustee is obligated to promptly notify all Unit Holders of the
substance of such amendment.
Termination
The Trust may be terminated at any time by the consent of the holders of 51%
of the Units or by the Trustee upon the direction of the Sponsor when the
aggregate net value of all Trust assets as shown by an evaluation made as
described under 'Evaluator--Responsibility' is less than 40% of the aggregate
maturity values of the Treasury Obligations deposited in the Trust on the Date
of Deposit and subsequent thereto calculated after the most recent deposit of
Treasury Obligations in the Trust or if there has been a material change in the
Fund's objectives. However, in no event may the Trust continue beyond the
Mandatory Termination Date set forth under 'Summary of Essential Information.'
In the event of termination, written notice thereof will be sent by the Trustee
to all Unit Holders.
Within a reasonable period after termination, the Trustee will sell any
Securities remaining in the Trust (other than Fund Shares for which an in kind
distribution has been requested) and, after paying all expenses and charges
incurred by the Trust, will distribute to each Unit Holder, upon surrender for
cancellation of his Certificate for Units, his pro rata share of: (i) the amount
realized upon disposition of the Fund Shares unless the Unit Holder notifies the
Trustee in writing of his preference for distribution 'in kind,' (ii) the amount
realized upon the disposition or maturity of the Treasury Obligations and (iii)
any other assets of the Trust. A Unit Holder may invest the proceeds of the
Treasury Obligations in Fund Shares at such shares' net asset value, which
shares shall be subject to 12b-1 expenses. The sale of the Securities in the
Trust upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time and, therefore, the amount
realized by a Unit Holder on termination may be less than the principal amount
of Treasury Obligations represented by the Units held by such Unit Holder.
Tax Impact of In Kind Distribution Upon Termination
Under the position taken by the Internal Revenue Service in Revenue Ruling
90-7, a distribution by the Trustee to a Unit Holder (or to his agent) of his
pro rata share of the Fund Shares in kind upon termination of the Trust will not
be a taxable event to the Unit Holder. Such Unit Holder's basis for Fund Shares
so distributed (other than any Fund Shares purchased with his pro rata share of
the proceeds of Treasury Obligations) will be equal to his basis for the same
Fund Shares (previously represented by his Units) prior to such distribution and
his holding period for such Fund Shares will be the shorter of the period during
which he held his Units and the period for which the Securities were held in the
Trust. A Unit Holder will have a taxable gain or loss, which will be a capital
gain or loss except in the case of a dealer or a financial institution, when the
Unit Holder disposes of such Securities in a taxable transfer.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005, as special counsel
for the Sponsor.
B-30
<PAGE>
INDEPENDENT AUDITORS
The Statement of Financial Condition and Schedule of Portfolio Securities of
the Government Securities Equity Trust included in this Prospectus have been
audited by Deloitte & Touche LLP, certified public accountants, as stated in
their report appearing herein, and are included in reliance upon such report
given upon the authority of that firm as experts in accounting and auditing.
B-31
<PAGE>
- --------------------------------------------------------------------------------
No person is authorized to give any information or to make any
representations with respect to this investment company not contained in this
Prospectus; and any information or representation not contained herein must not
be relied upon as having been authorized. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any state to
any person to whom it is not lawful to make such offer in such state.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES EQUITY TRUST
Series 9
Table of Contents
Page
-----
<S> <C>
Summary of Essential Information........................ A-v
Independent Auditors' Report............................ A-7
Statement of Financial Condition........................ A-8
Schedule of Portfolio Securities........................ A-9
The Trust............................................... B-1
Trust Formation..................................... B-1
Securities Selection................................ B-2
Stripped U.S. Treasury Obligations.................. B-2
Alliance Technology Fund, Inc....................... B-3
General Information Regarding the Fund.............. B-3
Additional Investment Policies and Practices of the
Fund................................................ B-5
Fundamental Investment Policies..................... B-10
Net Asset Value of the Fund Shares.................. B-11
The Fund's Investment Manager....................... B-12
The Fund's Plan of Distribution..................... B-13
Fund Risk Factors................................... B-14
Risk of Investment in Units......................... B-14
The Units........................................... B-15
Tax Status of the Trust................................. B-15
Retirement Plans........................................ B-19
Public Offering of Units................................ B-19
Public Offering Price............................... B-19
Public Distribution................................. B-19
Secondary Market.................................... B-20
Profit of Sponsor................................... B-20
Volume Discount..................................... B-20
Employee Discount................................... B-21
Exchange Option......................................... B-21
Federal Income Tax Consequences..................... B-22
Reinvestment of Trust Distributions..................... B-22
Expenses and Charges.................................... B-23
Expenses............................................ B-23
Fees................................................ B-23
Other Charges....................................... B-23
Rights of Unit Holders.................................. B-25
Certificates........................................ B-25
Certain Limitations................................. B-25
Distributions....................................... B-25
Reports and Records................................. B-26
Redemption.......................................... B-26
Comparison of Public Offering Price and Redemption
Price................................................... B-27
Sponsor................................................. B-27
Limitations on Liability............................ B-28
Responsibility...................................... B-28
Resignation......................................... B-28
Trustee................................................. B-28
Limitations on Liability............................ B-29
Responsibility...................................... B-29
Resignation......................................... B-29
Evaluator............................................... B-29
Limitations on Liability............................ B-29
Responsibility...................................... B-30
Resignation......................................... B-30
Amendment and Termination of the Indenture.............. B-30
Amendment........................................... B-30
Termination......................................... B-30
Tax Impact of In Kind Distribution Upon
Termination......................................... B-31
Legal Opinions.......................................... B-31
Independent Auditors.................................... B-31
</TABLE>
(LOGO)
Sponsor
Prudential Securities Incorporated
One Seaport Plaza
199 Water Street
New York, New York 10292
Trustee
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Evaluator
Kenny S&P Evaluation Services,
a division of
J.J. Kenny Co., Inc.
65 Broadway
New York, New York 10006
Fund Shares
Alliance Technology Fund, Inc.
<PAGE>
This Post-Effective Amendment to the Registration Statement on Form
S-6 comprises the following papers and documents:
The facing sheet on Form S-6.
The Prospectus.
Signatures.
Consent of independent public accountants and consent of evaluator;
all other consents were previously filed.
The following Exhibits:
****Ex-3.(i) - Certificate of Incorporation of Prudential Securities
Incorporated dated March 29, 1993.
***Ex-3.(ii) - Revised By-Laws of Prudential Securities Incorporated
as amended through September 28, 1998.
******Ex-4.a - Trust Indenture and Agreement dated May 16, 1989.
*Ex-23 - Consent of Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. (as evaluator)
**Ex-24 - Powers of Attorney executed by a majority of the
Board of Directors of Prudential Securities
Incorporated.
****Ex-99 - Information as to Officers and Directors of Prudential
Securities Incorporated is incorporated by reference to
Schedules A and D of Form BD filed by Prudential
Securities Incorporated pursuant to Rules 15b-1 and
15b3-1 under the Securities Exchange Act of 1934 (1934
Act File No. 8-27154).
****Ex-99.2 - Affiliations of Sponsor with other investment companies.
****Ex-99.3 - Broker's Blanket Policies, Standard Form No. 14 in the
aggregate amount of $62,500,000.
*****Ex-99.4 - Investment Advisory Agreement.
II-1
<PAGE>
- --------------------
* Filed herewith.
** Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement under the Securities Act of 1933 of National Municipal Trust,
Series 172, Registration No. 33-54681 (filed October 13, 1994), National
Equity Trust, Top Ten Portfolio Series 3, Registration No. 333-15919 (filed
January 31, 1997) and National Equity Trust, Low Five Portfolio Series 17,
Registration No. 333-44543 (filed January 20, 1998).
*** Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement under the Securities Act of 1933 of National Municipal Trust,
Series 186, Registration No. 33-54697 (filed August 9, 1996) and National
Equity Trust, S&P 500 Strategy Trust Series 2, Registration NO. 333-39521
(filed October 14, 1998).
**** Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement under the Securities Act of 1933 of National Equity Trust, Low
Five Portfolio Series 31, Registration No. 333-96071 (filed February 3,
2000).
*****Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement under the Securities Act of 1933 of National Municipal Trust,
Series 164, Registration No. 33-66108 (filed February 28, 2000).
****** Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement under the Securities Act of 1933 of Government Securities Equity
Trust Series 8, Registration No. 33-56297, (filed May 24, 2000).
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Government Securities Equity Trust Series 9 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 Registration
Statement or amendment thereto to be signed on its behalf by the undersigned
thereunto duly authorized, in the City of New York, and State of New York on the
25th day of May, 2000.
Government Securities Equity Trust Series 9
(Registrant)
By PRUDENTIAL SECURITIES INCORPORATED
(Depositor)
By the following persons,1 who
constitute a majority of the
Board of Directors of Prudential
Securities Incorporated
A. Laurence Norton, Jr.
Leland B. Paton
Martin Pfinsgraff
Vincent T. Pica II
James D. Price
Hardwick Simmons
Lee B. Spencer, Jr.
By /s/ Kenneth Swankie
(Kenneth Swankie,
Senior Vice President,
Manager - Unit Investment
Trust Department, as
authorized signatory for
Prudential Securities
Incorporated and Attorney-
in-Fact for the persons
listed above)
________________________
1 Pursuant to Powers of Attorney previously filed.
II-3
<PAGE>
CONSENT OF COUNSEL
The consent of counsel to the use of its name in the Prospectus included in
this Registration Statement is contained in its opinion filed as Exhibit 5 to
this Registration Statement.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in the Post Effective Amendment No. 5 to Registration
Statement No. 33-64881 of the Government Securities Equity Trust Series 9 of
our report dated May 12, 2000 appearing in the Prospectus, which is a part
of such Registration Statement, and to the reference to our Firm under the
heading "Auditors" in such Prospectus.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
New York, New York
May 24, 2000
II-5
<PAGE>
Letterhead of Kenny S&P Evaluation Services
(a division of J.J. Kenny Co., Inc.)
May 25, 2000
Prudential Securities Incorporated
1 New York Plaza
New York, NY 10292
Re: Government Securities Equity Trust
Post-Effective Amendment No. 4
Government Securities Equity Trust Series 9
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-64881 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Registration Statement of the references to Kenny S&P Evaluation Services, a
division of J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the respective
bonds comprising the Trust portfolio are the ratings currently indicated in our
KENNYBASE database as of the date of the evaluation report.
You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
Frank A. Ciccotto
Frank A. Ciccotto
Vice President
