File No. 333-40777 CIK #910929
Securities and Exchange Commission
Washington, D. C. 20549
Post-Effective
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933
of Securities of Unit Investment Trusts Registered
on Form N-8B-2
Ranson Unit Investment Trusts Series 61
Name and executive office address of Depositor:
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Name and complete address of agent for service:
Robin Pinkerton
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
( X ) Check box if it is proposed that this filing will become
effective at 2:00 p.m. on April 28, 1999 pursuant to paragraph (b) of
Rule 485.
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RANSON UNIT INVESTMENT TRUSTS, SERIES 61
Nasdaq Financial Index Trust, Series 1 (the "Trust") was formed with the
investment objective of obtaining capital appreciation through investment in a
portfolio of equity securities of the companies which comprise the Nasdaq
Financial Index. By investing in substantially all of the common stocks, in
substantially the same proportions, which comprise the Nasdaq Financial Index,
the Trust seeks to produce investment results that generally correspond to the
price and yield performance of the equity securities represented by the Nasdaq
Financial Index over the term of the Trust. See "The Trust Portfolio." The
Trust is not sponsored, endorsed or promoted by or affiliated with The Nasdaq
Stock Market, Inc. or the National Association of Securities Dealers, Inc.
There is, of course, no assurance that the Trust will achieve its objective.
Units of the Trust are not deposits or obligations of, or guaranteed by, any
bank and the Units are not federally insured or otherwise protected by the
Federal Deposit Insurance Corporation and involve investment risk including loss
of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus consists of two parts.
This Prospectus Part One may not be distributed unless accompanied by Part Two.
The investor is advised to read and retain this Prospectus for future reference.
THIS PROSPECTUS IS DATED AS OF THE DATE OF PROSPECTUS PART TWO.
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NASDAQ(REGISTERED TRADEMARK) INDEX LICENSING AGREEMENT
The Sponsor has entered into a license agreement with The Nasdaq Stock Market,
Inc. (the "License Agreement"), under which the Trust (through the Sponsor) is
granted licenses to use the trademark and tradenames "Nasdaq" and "Nasdaq
Financial Index" solely in materials relating to the creation and issuance,
marketing and promotion of the Trust and in accordance with any applicable
federal and state securities law to indicate the source of the Nasdaq Financial
Index as a basis for determining the composition of the Trust's portfolio. As
consideration for the grant of the license, the Trust will pay to The Nasdaq
Stock Market, Inc. an annual fee equal to that amount described under "Expenses
of the Trust." If the Nasdaq Financial Index ceases to be compiled or made
available or the anticipated correlation between Trust and the Nasdaq Financial
Index is not maintained, the Sponsor may direct that the Trust continue to be
operated using the Nasdaq Financial Index as it existed on the last date on
which it was available or may direct that the Trust Agreement be terminated (see
"Administration of the Trust-Amendment and Termination").
Neither the Trust nor the Unitholders are entitled to any rights whatsoever
under the foregoing licensing arrangements or to use any of the covered
trademarks or to use the Nasdaq Financial Index, except as specifically
described herein or as may be specified in the Trust Agreement.
The Trust is not sponsored, endorsed, sold or promoted by The Nasdaq Stock
Market, Inc. (including its affiliates) (the "Corporations"). The Corporations
have not passed on the legality or suitability of, or the accuracy or adequacy
of descriptions and disclosures relating to, the Trust or Units of the Trust.
The Corporations make no representation or warranty, express or implied to the
owners of Units of the Trust or any member of the public regarding the
advisability of investing in securities generally or in Units of the Trust
particularly or the ability of the Nasdaq Financial Index to track general stock
market performance. The Corporations' only relationship to the Sponsor
("Licensee") and the Trust is in the licensing of certain trademarks, service
marks, and trade names of the Corporations and the use of the Financial Index
which is determined, composed and calculated by Nasdaq without regard to the
Licensee, the Trust or Unitholders of the Trust. Nasdaq has no obligation to
take the needs of the Licensee or the owners of the Trust into consideration in
determining, composing or calculating the Nasdaq Financial Index. The
Corporations are not responsible for and have not participated in the
determination of the timing of, prices at, or quantities of the Units of the
Trust to be issued or in the determination or calculation of the equation by
which the Units of such Trust are to be converted into cash. The Corporations
have no liability in connection with the administration or operations of the
Trust, marketing or trading of Units of the Trust.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION
OF THE NASDAQ FINANCIAL INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS
MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE,
OWNERS OF UNITS OF THE TRUST, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
NASDAQ FINANCIAL INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO
EXPRESS OR IMPLIED WARRANTIES, AND
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EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE WITH RESPECT TO THE NASDAQ FINANCIAL INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE
CORPORATIONS HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
THE TRUST FUND
Ranson Unit Investment Trusts, Series 61 (the "Fund") includes one underlying
unit investment trust designated as Nasdaq Financial Index Trust, Series 1 (the
"Trust"). The Fund was created under the laws of the State of New York pursuant
to a trust indenture (the "Trust Agreement") dated the "Initial Date of Deposit"
between Ranson & Associates, Inc. (the "Sponsor") and The Bank of New York (the
"Trustee").*
The Trust contains common stocks issued by substantially all of the companies
which comprise the Nasdaq Financial Index. As used herein, the term
"Securities" means the common stocks (including contracts for the purchase
thereof) initially deposited in the Trust and described in the portfolio and any
additional common stocks acquired and held by the Trust pursuant to the
provisions of the Trust Agreement.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in the Trust. The Sponsor
intends to maintain a Trust portfolio which duplicates, to the extent
practicable, the weightings of stocks which comprise the index. The Sponsor
anticipates that the Trust will comprise the stocks in the index in
substantially the same weightings as in such index. In connection with any
deposit of Securities, purchase and sale transactions will be effected in
accordance with computer program output showing which Securities are under- or
over-represented in the Trust portfolio. Neither the Sponsor nor the Trustee
will exercise any investment discretion in connection with such transactions.
Precise duplication of the relationship among the Securities in the index may
not be achieved because it may be economically impracticable or impossible to
acquire very small numbers of shares of certain stocks and because of other
procedural policies of the Trust, but correlation between the performance of the
index and the Trust portfolio is expected to be between .97 and .99. See "The
Trust Portfolio."
By investing in substantially all of the common stocks, in substantially the
same proportions, which comprise the Nasdaq Financial Index, the Trust seeks to
produce investment results that generally correspond to the price and yield
performance of the equity securities represented by such index over the term of
the Trust. Due to various factors discussed below, there can be no assurance
that this objective will be met. An investment in Units of the Trust should be
made with an understanding that the Trust includes payments of a sales charge,
fees and expenses which may not be considered in public statements of the total
return of the index.
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* Reference is made to the Trust Agreement and any statement contained herein is
qualified in its entirety by the provisions of the Trust Agreement.
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Subsequent to the Initial Date of Deposit, the Sponsor may deposit additional
Securities in the Trust, contracts to purchase additional Securities along with
cash (or a bank letter of credit in lieu of cash) to pay for such contracted
Securities or cash (including a letter of credit) with instructions to purchase
additional Securities, maintaining, as closely as practicable the same
proportionate relationship among the Securities in the portfolio as reflected in
the index. Thus, although additional Units will be issued, each Unit of the
Trust will continue to represent approximately a weighting of the then current
components of the index at any such deposit. Precise duplication of the
relationship among the Securities in the Trust may not be achieved because it
may be economically impracticable as a result of certain economic factors and
procedural policies of the Trust such as (1) price movements of the various
Securities will not duplicate one another, (2) the Sponsor's current intention
is to purchase shares of the Securities in round lot quantities only, (3)
reinvestment of excess proceeds not needed to meet redemptions of Units may not
be sufficient to acquire equal round lots of all the Securities in the Trust and
(4) reinvestment of proceeds received from Securities which are no longer
components of the index might not result in the purchase of an equal number of
shares in any replacement Security. In addition, investors should be aware that
the Trust may not invest more than 5% of its assets in the stock of any issuer
that derives more than 15% of its revenues from securities-related activities
due to restrictions imposed by the Investment Company Act of 1940. Accordingly,
the Trust may not be able to replicate the weighting of certain stocks in the
Nasdaq Financial Index. To the extent the Trust is limited by this restriction
with respect to a stock, the Trust will seek to invest up to 5% of its assets in
such stock and increase the investment in all other issuers equally. If the
Sponsor deposits cash with instructions to purchase Securities, existing and new
investors may experience a dilution of their investments and a reduction in
their anticipated income because of fluctuations in the prices of the Securities
between the time of the cash deposit and the purchase of the Securities and
because the Trust will pay the associated brokerage fees. To minimize this
effect, the Trust will attempt to purchase the Securities as close to the
Evaluation Time or as close to the evaluation prices as possible.
The Trust consists of (a) the Securities listed under "Portfolio" in Part Two as
may continue to be held from time to time in the Trust (b) any additional
Securities acquired and held by the Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the Income and Capital Accounts of the
Trust. Neither the Sponsor nor the Trustee shall be liable in any way for any
failure in any of the Securities. However, should any contract for the purchase
of any of the Securities initially deposited hereunder fail, the Sponsor will,
unless substantially all of the moneys held in the Trust to cover such purchase
are reinvested in substitute Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract to all
Unitholders on the next distribution date.
THE TRUST PORTFOLIO
The Trust portfolio will consist of as many of the Nasdaq Financial Index stocks
as is feasible in order to achieve the Trust's objective of attempting to
provide investment results that duplicate substantially the total return of the
Nasdaq Financial Index. The Trust is expected to be invested in no less than
95% of the stocks comprising the index. Although it may be impracticable for
the Trust to own certain of such stocks at any time, the Sponsor expects to
maintain a correlation between the performance of the Trust portfolio and that
of the
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Nasdaq Financial Index of between .97 and .99. Adjustments to the Trust
portfolio will be made on an ongoing basis in accordance with the computer
program output to match the weightings of the Securities as closely as is
feasible with their weightings in the index as the Trust invests in new
Securities in connection with the creation of additional Units, as companies are
dropped from or added to such index or as Securities are sold to meet
redemptions. These adjustments will be made on the business day following the
relevant transaction in accordance with computer program output showing which of
the Securities are under- or over-represented in the Trust portfolio.
Adjustments may also be made from time to time to maintain the appropriate
correlation between the Trust and the index. The proceeds from any sale will be
invested in those Securities which the computer program indicates are most
under-represented in the portfolio. See "Investment Supervision."
Due to changes in the composition of the Nasdaq Financial Index, adjustments to
the Trust portfolio may be made from time to time. It is anticipated that most
of such changes in the Nasdaq Financial Index will occur as a result of merger
or acquisition activity. In such cases, the Trust, as a shareholder of an
issuer which is the object of such merger or acquisition activity, will
presumably receive various offers from potential acquirers of the issuer. The
Trustee is not permitted to accept any such offers until such time as the issuer
has been removed from the Nasdaq Financial Index. Since, in most cases, an
issuer is removed from the index only after the consummation of a merger or
acquisition, it is anticipated that the Trust will generally acquire, in
exchange for the stock of the deleted issuer, the consideration that is being
offered to shareholders of that issuer who have not tendered their shares prior
to that time. Any cash received as consideration in such transactions will be
reinvested in the most under-represented Securities as determined by the
computer program output. Any securities received as consideration which are not
included in the index will be sold as soon as practicable and will also be
reinvested in the most under-represented Securities as determined by the
computer program output.
In attempting to duplicate the proportionate relationships represented by the
index, the Sponsor does not anticipate purchasing or selling stock in quantities
of less than round lots (100 shares). In addition, certain Securities may not
be available in the quantities specified by the computer program. For these
reasons, among others, precise duplication of the proportionate relationships in
the index may not be possible but will continue to be the goal of the Trust in
connection with acquisitions or dispositions of Securities. See "Investment
Supervision." As the holder of the Securities, the Trustee will have the right
to vote all of the voting stocks in the Trust portfolio and will vote such
stocks in accordance with the instructions of the Sponsor.
Investors should note that the Trust is not sponsored, endorsed or promoted by
or affiliated with The Nasdaq Stock Market, Inc. and The Nasdaq Stock Market,
Inc. makes no representation, express or implied, to the Trust or Unitholders
regarding the advisability of investing in an index investment or unit
investment trusts generally or in the Trust specifically or the ability of the
index to track general stock market performance.
Although there can be no assurance that such Securities will appreciate in value
over the life of the Trust, over time stock investments have generally out-
performed most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the value of an
investment can decrease (see "Risk Factors-Certain Investment Considerations"),
and past performance is no guarantee of future results.
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THE NASDAQ FINANCIAL INDEX
The Nasdaq Financial Index is composed of 100 of the largest financial Nasdaq
National Market common stocks. Nasdaq, which represents the fastest growing
stock market in the U.S., is also one of the first fully electronic stock
markets in the world. This modern-day securities market began operations in
1971 and today lists more companies than any other market in the U.S. The
Nasdaq Financial Index is limited to one issue per company. Only domestic
issues are included. In the event a security is deleted from the Nasdaq
Financial Index, the largest financial issue not then in the Nasdaq Financial
Index which meets the applicable criteria will be substituted. The Nasdaq Stock
Market, Inc. has established procedures for, and controls over, substitutions of
securities and may periodically, at its discretion, make changes in component
stocks so that the index will more accurately reflect the overall composition of
the financial sector of The Nasdaq Stock Market. Each security in the Nasdaq
Financial Index is represented by its market capitalization in relation to the
total market value of the Nasdaq Financial Index. Companies are selected using
criteria that includes company trading volume, company visibility, and
continuity of the components in the Nasdaq Financial Index.
The Nasdaq Financial Index is market value weighted. The representation of each
security in the Nasdaq Financial Index is proportional to its last sale price
times the total number of shares outstanding, in relation to the total market
value of the Nasdaq Financial Index. The level of the Nasdaq Financial Index is
calculated as follows:
Nasdaq Financial Index Level = Current Market Value X 250
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Adjusted Base Period
Market Value
Adjusted Base Period = Current Market Value X Previous Base
After Adjustments Period Market Value
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Current Market Value
Before Adjustments
The numeric value level of the Nasdaq Financial Index was established at 250
prior to the opening of the market on February 1, 1985. The level of the Nasdaq
Financial Index will only change as a result of the price changes occurring
between the opening and closing of the market. Adjustments for securities being
added to or deleted from the Nasdaq Financial Index, or capitalization changes
of adjustments, will take place during the system maintenance process which
occurs after the market has closed. These adjustments will result in value
changes to the current market value and adjusted base period market value, but
will not in and of themselves alter the level of the Nasdaq Financial Index.
The Nasdaq Financial Index is also adjusted to account for stock splits and
stock dividends during the system maintenance process. The system makes a price
adjustment, however, to account for the increased number of shares outstanding
from such an action with the result being that the current market value does not
change.
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In case of cash dividends other than extraordinary dividends, no system
adjustment is made. The Nasdaq Financial Index formula relies on market forces
to determine the level of the Nasdaq Financial Index. Neither the current
market value nor the adjusted base period market value are adjusted to reflect
ordinary cash dividends. At its discretion, The Nasdaq Stock Market, Inc. may
temporarily suspend Nasdaq Financial Index securities from the calculation of
the Nasdaq Financial Index or adjust the Nasdaq Financial Index divisor in those
instances where an unusual cash dividend or spin-off might unduly influence the
level of the Nasdaq Financial Index. The Nasdaq Stock Market, Inc. disseminates
calculations of the Nasdaq Financial Index via Level 2 and Level 3 Nasdaq
service and makes the index calculation available to information vendors and the
print media.
RISK FACTORS
General. An investment in Units of the Trust should be made with an
understanding of the risks inherent in an investment in equity securities,
including the risk that the financial condition of issuers of the Securities may
become impaired or that the general condition of the stock market may worsen
(both of which may contribute directly to a decrease in the value of the
Securities and thus, in the value of the Units) or the risk that holders of
common stock have a right to receive payments from the issuers of those stocks
that is generally inferior to that of creditors of, or holders of debt
obligations issued by, the issuers and that the rights of holders of common
stock generally rank inferior to the rights of holders of preferred stock.
Common stocks are especially susceptible to general stock market movements and
to volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises.
Because the Nasdaq Financial Index generally includes a concentration of
financial and financial related companies, an investment in Units of the Trust
should be made with an understanding of the characteristics of the financial
industry and the risks which such an investment may entail. Banking
institutions and thrift institutions are especially subject to the adverse
effects of economic recession, volatile interest rates, portfolio concentrations
in geographic markets and in commercial and residential real estate loans, and
competition from new entrants in their fields of business. Economic conditions
in the real estate markets can have a significant effect upon banking
institutions and thrift institutions because they generally have a substantial
percentage of their assets invested in loans secured by real estate. Banking
institutions and thrift institutions are subject to extensive federal regulation
and, when such institutions are state-chartered, to state regulation as well.
Regulatory actions, such as increases in the minimum capital requirements
applicable to commercial banks and thrifts and increases in deposit insurance
premiums required to be paid by commercial banks and thrifts to the FDIC, can
negatively impact earnings and the ability of an institution to pay dividends.
Furthermore, neither federal insurance of deposits nor governmental regulation,
however, ensures the solvency or profitability of banking institutions or thrift
institutions, or insures against any risk of investment in the securities issued
by such institutions.
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Financial institutions and their holding companies are extensively regulated
under federal and state laws. As a result, the business, financial condition
and prospects of banks and thrifts can be materially affected not only by
management decisions and general economic conditions, but also by applicable
statutes and regulations and other regulatory pronouncements and policies
promulgated by regulatory agencies with jurisdiction over the banks and thrifts,
such as the Board of Governors of the Federal Reserve System ("FRB"), the Office
of the Comptroller of the Currency ("OCC"), the Office of Thrift Supervision
(the "OTS"), the Federal Deposit Insurance Corporation ("FDIC") and the state
banking regulators. The effect of such statutes, regulations and other
pronouncements and policies can be significant, cannot be predicted with a high
degree of certainty and can change over time. Furthermore, such statutes,
regulations and other pronouncements and policies are intended to protect
depositors and the FDIC's deposit insurance funds, not to protect stockholders.
Bank and thrift holding companies as well as their subsidiary banks and thrifts
are subject to enforcement actions by their regulators for regulatory
violations. In addition to compliance with statutory and regulatory limitations
and requirements concerning financial and operating matters, regulated financial
institutions must file periodic and other reports and information with their
regulators and are subject to examination by each of their regulators.
The statutory requirements applicable to and regulatory supervision of bank and
thrift holding companies and their subsidiary banks and thrifts have increased
significantly and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act ("FIRREA"), enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), enacted in
December 1991, and the regulations promulgated under FIRREA and FDICIA. The
impact of regulations promulgated pursuant to FDICIA on the business and
financial condition and prospects of banks and thrifts cannot be predicted with
certainty. Banks and thrifts currently face significant competition from other
financial institutions such as mutual funds, securities and brokerage companies,
credit unions, mortgage banking corporations and insurance companies, and
increased competition may result from broadening national interstate banking
powers and liberalization of certain restrictions on the activities of nonbank
subsidiaries of banks and thrifts. Many of these competitors are much larger in
total assets and capitalization, have greater access to capital markets and
offer a broader array of financial services than the issuers of the Securities.
There can be no assurance that such issuers will be able to compete effectively
in their markets, and the results of operations could be adversely affected if
circumstances affecting the nature or level of competition change.
Federal legislation became effective in 1995 which serves to lessen or remove
certain legal barriers to interstate banking and branching by financial
institutions. The legislation may result in an increase in the nationwide
consolidation activity occurring among financial institutions by facilitating
interstate bank operations and acquisitions. The legislation does, however,
allow states to "opt out" of interstate branching and certain states have opted
out of the legislation. The effects of changes in interstate banking cannot be
predicted, however, it is likely that there will be increased competition within
the regional banking industry which could have an adverse impact on certain
issuers. In addition, the Federal Reserve Board has approved applications by
bank holding companies to engage, through nonbank subsidiaries, in certain
securities-related activities, provided that the subsidiaries would not be
"principally engaged" in such activities for purposes of Section 20 of the
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Glass-Steagall Act. In certain situations, holding companies may be able to use
such subsidiaries to underwrite and deal in corporate debt and equity
securities. The Federal Reserve Board has recently liberalized the standards
used in determining whether a subsidiary is principally engaged in such
activities. From time to time bills have been introduced in Congress that would
remove many of the Glass-Steagall Act restraints, although no comprehensive bill
has been enacted to date. This and any future liberalization of Glass-Steagall
could result in increased competition which could have an adverse impact on
certain issuers. The Sponsor makes no prediction as to what, if any, additional
bank and thrift regulatory reform might be adopted or what ultimate effect such
reform might have on the Trust's portfolio.
The Trust also consists of companies engaged in investment banking, brokerage
and investment management. Such companies include brokerage firms,
broker/dealers, investment banks, finance companies and mutual fund companies.
Earnings and share prices of companies in this industry are quite volatile, and
often exceed the volatility levels of the market as a whole. Major determinants
of future earnings of these companies are the direction of the stock market,
investor confidence, equity transaction volume, the level and direction of long-
term and short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a serious
adverse effect on the financial stability, as well as the stock prices, of these
companies. Furthermore, there can be no assurance that the issuers of the
Securities included in the Trust will be able to respond timely to compete in
the rapidly developing marketplace. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization of
traditional businesses, new competitors, capital expenditures on new technology
and the pressures to compete globally.
Certain Investment Considerations. Holders of common stock incur more risk than
the holders of preferred stocks and debt obligations because common
stockholders, as owners of the entity, have generally inferior rights to receive
payments from the issuer in comparison with the rights of creditors of, or
holders of debt obligations or preferred stock issued by the issuer. Holders of
common stock of the type held by the Trust have a right to receive dividends
only when and if, and in the amounts, declared by the issuer's Board of
Directors and to participate in amounts available for distribution by the issuer
only after all other claims on the issuer have been paid or provided for. By
contrast, holders of preferred stock have the right to receive dividends at a
fixed rate when and as declared by the issuer's Board of Directors, normally on
a cumulative basis, but do not participate in other amounts available for
distribution by the issuing corporation. Cumulative preferred stock dividends
must be paid before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders of
cumulative preferred stock. Preferred stocks are also entitled to rights on
liquidation which are senior to those of common stocks. Moreover, common stocks
do not represent an obligation of the issuer and therefore do not offer any
assurance of income or provide the degree of protection of capital debt
securities. Indeed, the issuance of debt securities or even preferred stock
will create prior claims for payment of principal, interest, liquidation
preferences and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or the
rights of holders of common stock with respect to assets of the issuer upon
liquidation or bankruptcy. Further, unlike debt securities which typically have
a stated principal amount payable at maturity (whose value, however, will be
subject to market fluctuations prior thereto), common stocks have neither a
fixed principal amount nor a
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maturity and have values which are subject to market fluctuations for as long as
the stocks remain outstanding. The value of the Securities in the portfolios
thus may be expected to fluctuate over the entire life of the Trust to values
higher or lower than those prevailing on the Initial Date of Deposit.
Whether or not the Securities are listed on a national securities exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the
Securities may depend on whether dealers will make a market in the Securities.
There can be no assurance that a market will be made for any of the Securities,
that any market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Trust is restricted under the
Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold to meet redemptions and the value of
the Trust will be adversely affected if trading markets for the Securities are
limited or absent.
The Trust Agreement authorizes the Sponsor to increase the size of the Trust and
the number of Units thereof by the deposit of additional Securities, or cash
(including a letter of credit) with instructions to purchase additional
Securities, in the Trust and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, existing and new investors may
experience a dilution of their investments and a reduction in their anticipated
income because of fluctuations in the prices of the Securities between the time
of the cash deposit and the purchase of the Securities and because the Trust
will pay the associated brokerage fees. To minimize this effect, the Trust will
attempt to purchase the Securities as close to the Evaluation Time or as close
to the evaluation prices as possible.
Litigation and Legislation. From time to time Congress considers proposals to
reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time after the Initial Date of
Deposit, litigation may be initiated on a variety of grounds, or legislation may
be enacted with respect to the Securities in the Trust or the issuers of the
Securities. There can be no assurance that future litigation or legislation
will not have a material adverse effect on the Trust or will not impair the
ability of issuers to achieve their business goals.
FEDERAL TAX STATUS
The Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). If the Trust so
qualifies and timely distributes to Unitholders 90% or more of its taxable
income (without regard to its net capital gain, i. e., the excess of its net
long-term capital gain over its net short-term capital loss), it will not be
subject to Federal income tax on the portion of its taxable income (including
any net capital gain) that it distributes to Unitholders. In addition, to the
extent the Trust timely distributes to Unitholders at least 98% of its taxable
income (including any net capital gain), it will not be subject to the 4% excise
tax on certain undistributed income of "regulated investment companies."
Because the Trust intends to timely distribute its
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taxable income (including any net capital gain), it is anticipated that the
Trust will not be subject to Federal income tax or the excise tax.
Distributions to Unitholders of the Trust's income, other than distributions
which are designated as capital gain dividends, will be taxable as ordinary
income to Unitholders, except that to the extent that distributions to a
Unitholder in any year exceed the Trust's current and accumulated earnings and
profits, they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units and, to the extent that they exceed his basis,
will be treated as a gain from the sale of his Units as discussed below.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December, payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholders) on December 31 of the year such distributions are
declared.
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as long-term
capital gain, regardless of the length of time the Units have been held by a
Unitholder. A Unitholder may recognize a taxable gain or loss if the Unitholder
sells or redeems his Units. Any gain or loss arising from (or treated as
arising from) the sale or redemption of Units will generally be a capital gain
or loss, except in the case of a dealer or a financial institution. The
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that for taxpayers other than corporations, net capital gain
(which is defined as net long-term capital gain over net short-term capital loss
for the taxable year) realized from property (with certain exclusions) is
generally subject to a maximum marginal stated tax rate of 20% (10% in the case
of certain taxpayers in the lowest tax bracket). Capital gain or loss is long-
term if the holding period for the asset is more than one year, and is short-
term if the holding period for the asset is one year or less. The date on which
a Unit is acquired (i.e., the "trade date") is excluded for purposes for
determining the holding period of the Unit. Capital gains realized from assets
held for one year or less are taxed at the same rates as ordinary income. Note
that if a Unitholder holds Units for six months or less and subsequently sells
such Units at a loss, the loss will be treated as a long-term capital loss to
the extent that any long-term capital gain distribution is made with respect to
such Units during the six-month period or less that the Unitholder owns the
Units.
The Taxpayer Relief Act of 1997 includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g., short sales, offsetting notional principal contracts, futures or
forward contracts or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period. Unitholders should consult their own tax advisers with regard to any
such constructive sales rules.
In addition, it should be noted that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
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<PAGE>
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends-
received deduction, subject to the limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Trust from United States corporations (other than real
estate investment trusts) and is designated by the Trust as being eligible for
such deduction. To the extent dividends received by the Trust are attributable
to foreign corporations, a corporation that owns Units will not be entitled to
the dividends-received deduction with respect to its pro rata portion of such
dividends, since the dividends-received deduction is generally available only
with respect to dividends paid by domestic corporations. The Trust will provide
each Unitholder with information annually concerning what part of the Trust
distributions are eligible for the dividends received deduction.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
of the Trust are held by or for 500 or more persons at all times during the
taxable year or another exception is met. In the event the Units of the Trust
are held by fewer than 500 persons, additional taxable income may be realized by
the individual (and other noncorporate) Unitholders in excess of the
distributions received from the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i. e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an in kind
distribution upon termination of the Trust. See "Amendment and Termination."
Unitholders electing an in kind distribution of shares of Securities should be
aware that the exchange is subject to taxation and Unitholders will recognize
gain or loss (subject to various non-recognition provisions under the Code)
based on the value of the Securities received. Investors electing an in kind
distribution should consult their own tax advisers with regard to such
transaction.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back- up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from the Trust
that are designated by the Trust as capital gain dividends should not be subject
to United States Federal income taxes,
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<PAGE>
including withholding taxes, if all of the following conditions are met: (i)
the capital gain dividend is not effectively connected with the conduct by the
foreign investor of a trade or business within the United States, (ii) the
foreign investor (if an individual) is not present in the United States for 183
days or more during his or her taxable year, and (iii) the foreign investor
provides all certification which may be required of his status (foreign
investors may contact the Sponsor to obtain a Form W-8 which must be filed with
the Trustee and refiled every three calendar years thereafter). Foreign
investors should consult their tax advisors with respect to United States tax
consequences of ownership of Units. Units in the Trust and Trust distributions
may also be subject to state and local taxation and Unitholders should consult
their tax advisors in this regard.
The foregoing discussion relates only to the federal income tax status of the
Trust and to the tax treatment of distributions by the Trust to United States
Unitholders.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of the Trust are offered at the Public Offering
Price (which is based on the aggregate underlying value of the Securities in the
Trust and includes a sales charge of 4.9% of the Public Offering Price which
charge is equivalent to 5.152% of the net amount invested) plus a pro rata share
of any accumulated dividends in the Income Account of the Trust. Such
underlying value shall also include the proportionate share of any undistributed
cash held in the Capital Account of the Trust.
The sales charge per Unit of the Trust in both the primary and secondary market
will be reduced pursuant to the following graduated schedule:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF NET
NUMBER OF UNITS* OFFERING PRICE AMOUNT INVESTED
- ---------------- -------------- ---------------
<S> <C> <C>
Less than 10,000 4.9% 5.152%
10,000-24,999 4.5 4.712
25,000-49,999 4.3 4.493
50,000-99,999 3.5 3.627
100,000 or more 3.0 3.093
<FN>
- --------------------
* The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied
on whichever basis is more favorable to the investor.
</TABLE>
An investor may aggregate purchases of Units of the Trust for purposes of
qualifying for the volume purchase discounts listed above. The reduced sales
charge structure will apply on all purchases of Units in the Trust by the same
person on any one day from any one dealer. Additionally, Units purchased in the
name of the spouse of a purchaser or in the name of a child of such purchaser
under 21 years of age will be deemed, for purposes of
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<PAGE>
calculating the applicable sales charge, to be additional purchases by the
purchaser. The reduced sales charges will also be applicable to a trustee or
other fiduciary purchasing securities for a single trust estate or single
fiduciary account.
Units may be purchased in the primary or secondary market at the Public Offering
Price less the concession the Sponsor typically allows to dealers and other
selling agents for purchases (see "Public Distribution of Units" below) by
officers, directors and employees of the Sponsor and its affiliates and
registered representatives of selling firms and by investors who purchase Units
through registered investment advisers, certified financial planners or
registered broker-dealers who in each case either charge periodic fees for
financial planning, investment advisory or asset management services, or provide
such services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed.
Unitholders of any series of Ranson equity unit investment trust may utilize
their redemption or termination proceeds to purchase Units of the Trust subject
to a reduced sales charge of 3% of the Public Offering Price (3.093% of the net
amount invested).
Unitholders of unaffiliated unit investment trusts having an investment strategy
similar to the investment strategy of the Trust may utilize proceeds received
upon termination or upon redemption immediately preceding termination of such
unaffiliated trust to purchase Units of the Trust subject to a reduced sales
charge of 3% of the Public Offering Price (3.093% of the net amount invested).
As indicated above, the initial Public Offering Price of the Units was
established by dividing the aggregate underlying value of the Securities by the
number of Units outstanding. Such underlying value shall include the
proportionate share of any cash held in the Capital Account. Such price
determination as of the opening of business on the Initial Date of Deposit was
made on the basis of an evaluation of the Securities in the Trust prepared by
the Trustee. After the opening of business on the Initial Date of Deposit, the
Evaluator will appraise or cause to be appraised daily the value of the
underlying Securities as of the Evaluation Time on days the New York Stock
Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on the New York
Stock Exchange on each such day. Orders received by the Trustee, Sponsor or any
dealer for purchases, sales or redemptions after that time, or on a day when the
New York Stock Exchange is closed, will be held until the next determination of
price.
The value of the Securities is determined on each business day by the Evaluator
based on the closing sale prices on a national securities exchange or The Nasdaq
National Market or by taking into account the same factors referred to under
"Redemption-Computation of Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units.
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<PAGE>
PUBLIC DISTRIBUTION OF UNITS. Units which remain unsold or which may be
acquired in the secondary market (see "Market for Units") may be offered at the
Public Offering Price determined in the manner provided above.
The Sponsor intends to qualify Units of the Trust for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Sales may be made
to or through dealers at prices which represent discounts from the Public
Offering Price as set forth below. Certain commercial banks are making Units of
the Trust available to their customers on an agency basis. A portion of the
sales charge paid by their customers is retained by or remitted to the banks in
the amounts shown below. Under the Glass-Steagall Act, banks are prohibited
from underwriting Trust Units; however, the Glass-Steagall Act does permit
certain agency transactions and the banking regulators have indicated that these
particular agency transactions are permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law. The Sponsor reserves the right to
change the discounts set forth below from time to time. In addition to such
discounts, the Sponsor may, from time to time, pay or allow an additional
discount, in the form of cash or other compensation, to dealers employing
registered representatives who sell, during a specified time period, a minimum
dollar amount of Units of the Trust and other unit investment trusts
underwritten by the Sponsor. At various times the Sponsor may implement
programs under which the sales force of a broker or dealer may be eligible to
win nominal awards for certain sales efforts, or under which the Sponsor will
reallow to any such broker or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the total
applicable sales charges on the sales generated by such person at the public
offering price during such programs. Also, the Sponsor in its discretion may
from time to time pursuant to objective criteria established by the Sponsor pay
fees to qualifying brokers or dealers for certain services or activities which
are primarily intended to result in sales of Units of the Trust. Such payments
are made by the Sponsor out of its own assets, and not out of the assets of the
Trust. These programs will not change the price Unitholders pay for their Units
or the amount that the Trust will receive from the Units sold. The difference
between the discount and the sales charge will be retained by the Sponsor.
<TABLE>
<CAPTION>
REGULAR
CONCESSION OR
AGENCY
NUMBER OF UNITS* COMMISSION
---------------------------- -------------
<S> <C>
Less than 10,000 3.60%
10,000 but less than 25,000 3.30
25,000 but less than 50,000 3.20
50,000 but less than 100,000 2.50
100,000 or more 2.00
<FN>
- --------------------
* The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
</TABLE>
15
<PAGE>
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of the Trust as stated
under "Public Offering Price." In addition, the Sponsor may realize a profit (or
sustain a loss) as of the Initial Date of Deposit resulting from the difference
between the purchase prices of the Securities to the Sponsor and the cost of
such Securities to the Trust, which is based on the evaluation of the Securities
on the Initial Date of Deposit. Thereafter, on subsequent deposits the Sponsor
may realize profits or sustain losses from such deposits. The Sponsor may
realize additional profits or losses on unsold Units as a result of changes in
the daily market value of the Securities in the Trust.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, subject to change at any time, maintain a market for Units of the
Trust offered hereby and to continuously offer to purchase said Units at prices,
determined by the Evaluator, based on the value of the underlying Securities.
Unitholders who wish to dispose of their Units should inquire of their broker as
to current market prices in order to determine whether there is in existence any
price in excess of the Redemption Price and, if so, the amount thereof. The
offering price of any Units resold by the Sponsor will be in accord with that
described in the currently effective prospectus describing such Units. Any
profit or loss resulting from the resale of such Units will belong to the
Sponsor. The Sponsor may suspend or discontinue purchases of Units of a Trust
if the supply of Units exceeds demand, or for other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Trustee at its Unit Investment Trust Division office in
the city of New York and, in the case of Units evidenced by a certificate, by
tendering such certificate to the Trustee properly endorsed or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Trustee. Unitholders must sign the request, and such certificate or transfer
instrument, exactly as their names appear on the records of the Trustee and on
any certificate representing the Units to be redeemed. If the amount of the
redemption is $500 or less and the proceeds are payable to the Unitholder(s) of
record at the address of record, no signature guarantee is necessary for
redemptions by individual account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guaranty program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
certificate is required for redemption when one has been issued, Units
represented by a certificate cannot be redeemed until the certificate
representing such Units has been received by the purchasers.
16
<PAGE>
Redemption shall generally be made by the Trustee on the third business day
following the day on which a tender for redemption is received (the "Redemption
Date") by payment of cash equivalent to the Redemption Price for the Trust,
determined as set forth below under "Computation of Redemption Price," as of the
Evaluation Time stated under "Essential Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be canceled and any undivided fractional interest in the Trust
extinguished. The price received upon redemption might be more or less than the
amount paid by the Unitholder depending on the value of the Securities in the
Trust at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the Trust to the extent that funds are available for
such purpose. All other amounts paid on redemption shall be withdrawn from the
Capital Account for the Trust. The Trustee is empowered to sell Securities for
the Trust in order to make funds available for the redemption of Units of the
Trust. Such sale may be required when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
To the extent that Securities are sold, the size of the Trust will be, and the
diversity of the Trust may be, reduced but each remaining Unit will continue to
represent approximately the same proportional interest in each Security. Sales
may be required at a time when Securities would not otherwise be sold and may
result in lower prices than might otherwise be realized. The price received
upon redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
17
<PAGE>
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will generally be determined on the
basis of the last sale price of the Securities in the Trust. The Redemption
Price per Unit is the pro rata share of each Unit in the Trust determined on the
basis of (i) the cash on hand in the Trust or moneys in the process of being
collected and (ii) the value of the Securities in the Trust less (a) amounts
representing taxes or other governmental charges payable out of the Trust, (b)
any amount owing to the Trustee for its advances and (c) the accrued expenses of
the Trust. The Evaluator may determine the value of the Securities in the Trust
in the following manner: if the Security is listed on a national securities
exchange or the Nasdaq National Market, the evaluation will generally be based
on the last sale price on the exchange or Nasdaq (unless the Evaluator deems the
price inappropriate as a basis for evaluation). If the Security is not so
listed or, if so listed and the principal market for the Security is other than
on the exchange or Nasdaq, the evaluation will generally be made by the
Evaluator in good faith based on the last bid price on the over-the-counter
market (unless the Evaluator deems such price inappropriate as a basis for
evaluation) or, if a bid price is not available, (1) on the basis of the
current bid price for comparable securities, (2) by the Evaluator's appraising
the value of the Securities in good faith at the bid side of the market or (3)
by any combination thereof. See "Public Offering of Units-Public Offering
Price."
RETIREMENT PLANS
The Trust may be well suited for purchase by Individual Retirement Accounts,
Keogh Plans, pension funds and other qualified retirement plans. Generally,
capital gains and income received under each of the foregoing plans are deferred
from Federal taxation. All distributions from such plans are generally treated
as ordinary income but may, in some cases, be eligible for special income
averaging or tax-deferred rollover treatment. Investors considering
participation in any such plan should review specific tax laws related thereto
and should consult their attorneys or tax advisers with respect to the
establishment and maintenance of any such plan. Such plans are offered by
brokerage firms and other financial institutions. The Trust will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-deferred plans such as IRA accounts. Fees and charges with
respect to such plans may vary.
The Trustee has agreed to act as custodian for certain retirement plan accounts.
An annual fee of $12.00 per account, if not paid separately, will be assessed by
the Trustee and paid through the liquidation of shares of the reinvestment
account. An individual wishing the Trustee to act as custodian must complete a
Ranson UIT/IRA application and forward it along with a check made payable to The
Bank of New York. Certificates for Individual Retirement Accounts cannot be
issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trust will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied
18
<PAGE>
by a written instrument or instruments of transfer which should be sent by
registered or certified mail for the protection of the Unitholder. Unitholders
must sign such written request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and on any
certificate representing the Units to be transferred. Such signatures must be
guaranteed as stated under "Redemption-General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to the minimum
investment requirement of 100 Units or $1,000. Fractions of Units, if any, will
be computed to three decimal places. Any certificate issued will be numbered
serially for identification, issued in fully registered form and will be
transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Income received by the Trust is credited by the
Trustee to the Income Account of the Trust. Other receipts are credited to the
Capital Account of the Trust. Income received by the Trust will be distributed
on or shortly after the 15th day of January, April, July and October of each
year on a pro rata basis to Unitholders of record as of the preceding record
date (which will be the first day of the related month). All distributions will
be net of applicable expenses. There is no assurance that any actual
distributions will be made since all dividends received may be used to pay
expenses. In addition, amounts from the Capital Account of the Trust, if any,
will be distributed at least annually to the Unitholders then of record.
Proceeds received from the disposition of any of the Securities after a record
date and prior to the following distribution date will be held in the Capital
Account and not distributed until the next distribution date applicable to the
Capital Account. The Trustee shall be required to make a distribution from the
Capital Account if the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per 100 Units.
The Trustee is not required to pay interest on funds held in the Capital or
Income Accounts (but may itself earn interest thereon and therefore benefits
from the use of such funds). The Trustee is authorized to reinvest any funds
held in the Capital or Income Accounts, pending distribution, in U.S. Treasury
obligations which mature on or before the next applicable distribution date.
Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an amount
substantially equal to such portion of the Unitholders' pro rata share of the
dividend distributions then held in the Income Account after deducting estimated
expenses. Because dividends are not received by the Trust at a constant rate
throughout the year, such distributions to Unitholders are expected to
fluctuate. Persons who purchase Units will commence receiving distributions
only after such person becomes a record owner. A person will become the owner
of Units, and thereby a Unitholder of record, on the date of settlement provided
payment has been received. Notification to the Trustee of the
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<PAGE>
transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of the Trust and, to the extent funds are not sufficient therein, from
the Capital Account of such Trust amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Expenses of the Trust"). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of the
Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Income and Capital Accounts of the Trust such amounts as may be necessary to
cover redemptions of Units.
DISTRIBUTION REINVESTMENT. Unitholders may elect to have distributions of
capital (including capital gains, if any) or dividends or both automatically
invested into additional Units of the Trust without a sales charge. In
addition, Unitholders may elect to have distributions of capital (including
capital gains, if any) or dividends or both automatically invested without
charge in shares of certain front-end load mutual funds underwritten or advised
by Scudder Kemper Investments, Inc. at net asset value if such funds are
registered in such Unitholder's state of residence, other than those mutual
funds sold with a contingent deferred sales charge. Since the portfolio
securities and investment objectives of such mutual funds generally will differ
significantly from those of the Trust, Unitholders should carefully consider the
consequences before selecting such mutual funds for reinvestment. Detailed
information with respect to the investment objectives and the management of such
mutual funds is contained in their respective prospectuses, which can be
obtained from the Sponsor upon request. An investor should read the prospectus
of the reinvestment fund selected prior to making the election to reinvest.
Unitholders who desire to have such distributions automatically reinvested
should inform their broker at the time of purchase or should file with the
Program Agent referred to below a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record Date applicable to any
distribution in order to be in effect for such Record Date. Any such election
shall remain in effect until a subsequent notice is received by the Program
Agent. See "Unitholders-Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of New
York at its Unit Investment Trust Division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
20
<PAGE>
The accounts of the Trust are required to be audited annually, at the Trust's
expense, by independent public accountants designated by the Sponsor, unless the
Sponsor determines that such an audit would not be in the best interest of the
Unitholders of the Trust. The accountants' report will be furnished by the
Trustee to any Unitholder of the Trust upon written request. Within a
reasonable period of time after the end of each calendar year, the Trustee shall
furnish to each person who at any time during the calendar year was a Unitholder
of the Trust a statement, covering the calendar year, setting forth:
(A) As to the Income Account:
(1) Income received;
(2) Deductions for applicable taxes and for fees and expenses of the Trust and
for redemptions of Units, if any; and
(3) The balance remaining after such distributions and deductions, expressed
in each case both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last
business day of such calendar year; and
(B) As to the Capital Account:
(1) The dates of disposition of any Securities and the net proceeds received
therefrom;
(2) Deductions for payment of applicable taxes and fees and expenses of the
Trust held for distribution to Unitholders of record as of a date prior to
the determination; and
(3) 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; and
(C) The following information:
(1) A list of the Securities as of the last business day of such calendar
year;
(2) The number of Units outstanding on the last business day of such calendar
year;
(3) The Redemption Price based on the last evaluation made during such
calendar year;
(4) The amount actually distributed during such calendar year from the Income
and Capital Accounts separately stated, expressed both as total dollar
amounts and as dollar amounts per Unit outstanding on the Record Dates for
each such distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate the Trust nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of the Trust.
21
<PAGE>
No Unitholder shall have the right to control the operation and management of
the Trust in any manner, except to vote with respect to the amendment of the
Trust Agreement or termination of the Trust.
INVESTMENT SUPERVISION
The Trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. The portfolio of the Trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer will
not necessarily require the sale of its securities from the portfolio.
As a general rule, the only purchases and sales that will be made with respect
to the Trust's portfolio will be those necessary to maintain, to the extent
feasible, a portfolio which reflects the current components of the Nasdaq
Financial Index, taking into consideration redemptions, sales of additional
Units and the other adjustments referred to elsewhere in this prospectus. See
"The Trust Portfolio." Such purchases and sales will be made in accordance with
the computer program utilized to maintain the portfolio, the Trust Agreement and
procedures to be specified by the Sponsor. The Sponsor may direct the Trustee
to dispose of Securities and either to acquire other Securities through the use
of the proceeds of such disposition in order to make changes in the portfolio or
to distribute the proceeds of such disposition to Unitholders (i) as necessary
to reflect any additions to or deletions from the Nasdaq Financial Index, (ii)
as may be necessary to establish a closer correlation between the Trust
portfolio and the Nasdaq Financial Index or (iii) as may be required for
purposes of distributing to Unitholders, when required, their pro rata share of
any net realized capital gains or as the Sponsor may otherwise determine. As a
policy matter, the Sponsor currently intends to direct the Trustee to acquire
round lots of shares of the Securities rather than odd lot amounts. Any funds
not used to acquire round lots will be held for future purchases of shares, for
redemptions of Units or for distributions to Unitholders. In the event the
Trustee receives any securities or other properties relating to the Securities
(other than normal dividends) acquired in exchange for Securities such as those
acquired in connection with a reorganization, recapitalization, merger or other
transaction, the Trustee is directed to sell such securities or other property
and reinvest the proceeds in shares of the Security for which such securities or
other property relates, or if such Security is thereafter removed from the
Nasdaq Financial Index, in any new security which is added as a component of
such index. In addition, the Sponsor will instruct the Trustee to dispose of
certain Securities and to take such further action as may be needed from time to
time to ensure that the Trust continues to satisfy the qualifications of a
regulated investment company, including the requirements with respect to
diversification under Section 851 of the Internal Revenue Code, and as may be
needed from time to time to avoid the imposition of any excise tax on the Trust
as a regulated investment company.
Proceeds from the sale of Securities (or any securities or other property
received by the Trust in exchange for Securities) are credited to the Capital
Account for distribution to Unitholders or to meet redemptions. Except as
stated under "The Trust Fund" for failed securities and as provided herein, the
acquisition by the Trust of any securities other than the Securities is
prohibited. The Trustee may sell Securities, designated by the Sponsor, from
the Trust for the purpose of redeeming Units tendered for redemption and the
payment of expenses.
22
<PAGE>
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its Unit Investment Trust
Division offices at 101 Barclay Street, New York, New York 10286, telephone 1-
800-701-8178. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of Governors
of the Federal Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of the Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of the Trust. Such books and
records shall be open to inspection by any Unitholder at all reasonable times
during usual business hours. The Trustee shall make such annual or other
reports as may from time to time be required under any applicable state or
federal statute, rule or regulation. The Trustee shall keep a certified copy or
duplicate original of the Trust Agreement on file in its office available for
inspection at all reasonable times during usual business hours by any
Unitholder, together with a current list of the Securities held in the Trust.
Pursuant to the Trust Agreement, the Trustee may employ one or more agents for
the purpose of custody and safeguarding of Securities comprising the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. If the Trustee becomes
incapable of acting or becomes bankrupt or its affairs are taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor as
provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
23
<PAGE>
THE SPONSOR. Ranson & Associates, Inc., the Sponsor of the Trust, is an
investment banking firm created in 1995 by a number of former owners and
employees of Ranson Capital Corporation. On November 26, 1996, Ranson &
Associates, Inc. purchased all existing unit investment trusts sponsored by
EVEREN Securities, Inc. Accordingly, Ranson & Associates, Inc. is the successor
sponsor to unit investment trusts formerly sponsored by EVEREN Unit Investment
Trusts, a service of EVEREN Securities, Inc. Ranson & Associates, Inc. is also
the sponsor and successor sponsor of Series of The Kansas Tax-Exempt Trust and
Multi-State Series of The Ranson Municipal Trust. Ranson & Associates, Inc. is
the successor to a series of companies, the first of which was originally
organized in Kansas in 1935. During its history, Ranson & Associates, Inc. and
its predecessors have been active in public and corporate finance and have sold
bonds and unit investment trusts and maintained secondary market activities
relating thereto. At present, Ranson & Associates, Inc., which is a member of
the National Association of Securities Dealers, Inc., is the Sponsor to each of
the above-named unit investment trusts and serves as the financial advisor and
as an underwriter for Kansas municipalities. The Sponsor's offices are located
at 250 North Rock Road, Suite 150, Wichita, Kansas 67206-2241.
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trust as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreement.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust. More comprehensive financial information
can be obtained upon request from the Sponsor.
THE EVALUATOR. Ranson & Associates, Inc., the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which event
the Trustee is to use its best efforts to appoint a satisfactory successor.
Such resignation or removal shall become effective upon acceptance of
appointment by the successor evaluator. If upon resignation of the Evaluator no
successor has accepted appointment within thirty days after notice of
resignation, the Evaluator may apply to a court of competent jurisdiction for
the appointment of a successor. Notice of such registration or removal and
appointment shall be mailed by the Trustee to each Unitholder.
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Agreement with respect to the Trust may also be amended
in any respect by the Sponsor and the Trustee, or any of the provisions thereof
24
<PAGE>
may be waived, with the consent of the holders of Units representing 66 2/3% of
the Units then outstanding of the Trust, provided that no such amendment or
waiver will reduce the interest of any Unitholder thereof without the consent of
such Unitholder or reduce the percentage of Units required to consent to any
such amendment or waiver without the consent of all Unitholders of the Trust.
In no event shall the Trust Agreement be amended to increase the number of Units
of the Trust issuable thereunder or to permit the acquisition of any Securities
in addition to or in substitution for those initially deposited in the Trust,
except in accordance with the provisions of the Trust Agreement. The Trustee
shall promptly notify Unitholders of the substance of any such amendment.
The Trust Agreement provides that the Trust shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in the Trust but in no event is it to continue beyond the Mandatory Termination
Date set forth under "Essential Information" in Part Two. If the value of the
Trust shall be less than the applicable minimum value stated under "Essential
Information" in Part Two (40% of the aggregate value of the Securities-based on
the value at the date of deposit of such Securities into the Trust), the Trustee
may, in its discretion, and shall, when so directed by the Sponsor, terminate
the Trust. The Trust may be terminated at any time by the holders of Units
representing 66 2/3% of the Units thereof then outstanding. In addition, the
Sponsor may terminate the Trust if the Nasdaq Financial Index is no longer
maintained.
No later than the Mandatory Termination Date set forth under "Essential
Information" in Part Two, the Trustee will begin to sell all of the remaining
underlying Securities on behalf of Unitholders in connection with the
termination of the Trust. The Sponsor has agreed to assist the Trustee in these
sales. The sale proceeds will be net of any incidental expenses involved in the
sales.
The Sponsor will attempt to sell the Securities as quickly as it can during the
termination proceedings without in its judgment materially adversely affecting
the market price of the Securities, but it is expected that all of the
Securities will in any event be disposed of within a reasonable time after the
Trust's termination. The Sponsor does not anticipate that the period will be
longer than one month, and it could be as short as one day, depending on the
liquidity of the Securities being sold. The liquidity of any Security depends
on the daily trading volume of the Security and the amount that the Sponsor has
available for sale on any particular day.
In the event of termination of the Trust, written notice thereof will be sent by
the Trustee to all Unitholders of the Trust. Within a reasonable period after
termination, the Trustee will sell any Securities remaining in the Trust and,
after paying all expenses and charges incurred by the Trust, will distribute to
Unitholders thereof (upon surrender for cancellation of certificates for Units,
if issued) their pro rata share of the balances remaining in the Income and
Capital Accounts of the Trust.
The Sponsor may, but is not obligated to, offer for sale units of a subsequent
series of the Trust at approximately the time of the Mandatory Termination Date.
If the Sponsor does offer such units for sale, Unitholders may be given the
opportunity to purchase such units at a public offering price which includes a
reduced sales charge. There is, however, no assurance that units of any new
series of the Trust will be offered
25
<PAGE>
for sale at that time, or if offered, that there will be sufficient units
available for sale to meet the requests of any or all Unitholders.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from its responsibilities under the Trust
Agreement, but will be under no liability to the Unitholders for taking any
action or refraining from any action in good faith pursuant to the Trust
Agreement or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct or its reckless disregard for its
duties thereunder. The Sponsor shall not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of moneys, Securities or
certificates except by reason of its own negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust Agreement,
nor shall the Trustee be liable or responsible in any way for depreciation or
loss incurred by reason of the sale by the Trustee of any Securities. In the
event that the Sponsor shall fail to act, the Trustee may act and shall not be
liable for any such action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or upon the interest thereof. In addition, the Trust
Agreement contains other customary provisions limiting the liability of the
Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator 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
or Unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement.
EXPENSES OF THE TRUST
The Sponsor will not charge the Trust any fees for services performed as
Sponsor. The Sponsor will receive a portion of the sale commissions paid in
connection with the purchase of Units and will share in profits, if any, related
to the deposit of Securities in the Trust.
The Trustee receives for its services that fee set forth under "Essential
Information" in Part Two. However, in no event shall such fee amount to less
than $2,000 in any single calendar year. The Trustee's fee which is calculated
monthly is based on the largest number of Units of the Trust outstanding during
the calendar year for which such compensation relates. The Trustee's fees are
payable monthly on or before the fifteenth day of the month from the Income
Account to the extent funds are available and then from the Capital Account.
The Trustee benefits to the extent there are funds for future distributions,
payment of expenses and redemptions in the Capital and Income Accounts since
these Accounts are non-interest bearing and the amounts earned by the Trustee
are retained by the
26
<PAGE>
Trustee. Part of the Trustee's compensation for its services to the Trust is
expected to result from the use of these funds.
In its capacity as Supervisor, the Sponsor will charge the Trust a surveillance
fee for services performed for the Trust in an amount not to exceed that amount
set forth in "Essential Information" in Part Two but in no event will such
compensation, when combined with all compensation received from other unit
investment trusts for which the Sponsor both acts as sponsor and provides
portfolio surveillance, exceed the aggregate cost to the Sponsor for providing
such services. Such fee shall be based on the total number of Units of the
Trust outstanding as of the January record date for any annual period.
For evaluation of the Securities in the Trust, the Evaluator shall receive that
fee set forth under "Essential Information" in Part Two, payable monthly, based
upon the largest number of Units of the Trust outstanding during the calendar
year for which such compensation relates.
The Trustee's fee, Supervisor's fee and Evaluator's fee are deducted from the
Income Account of the Trust to the extent funds are available and then from the
Capital Account. Each such fee may be increased without approval of Unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index or
any equivalent index substituted therefor.
The Licensor receives an annual fee from the Trust equal to the greater of (a)
.02% of the average net asset value of the Trust computed quarterly or (b) a
minimum of $7,000 during the first year of the Trust's life, $8,000 during the
second year of the Trust's life and $9,000 thereafter. This fee covers the
license to the Trust of the use of various trademarks and trade names as
described under "The Nasdaq Financial Index." This fee may be increased
annually by the amount of the increase, if any, in the Consumer Price Index for
Urban Consumers, All Items, as issued by the Bureau of Labor Statistics, U.S.
Department of Labor, over the prior twelve-month period.
Expenses incurred in establishing the Trust, including the cost of the initial
preparation of documents relating to the Trust (including the Prospectus, Trust
Agreement and certificates), federal and state registration fees, the initial
fees and expenses of the Trustee, legal and accounting expenses, payment of
closing fees and any other out-of-pocket expenses, will be paid by the Trust
(out of the Capital Account) and it is intended that such expenses be amortized
over a five year period or the life of the Trust if less than five years. The
following additional charges are or may be incurred by the Trust: (a) fees for
the Trustee's extraordinary services; (b) expenses of the Trustee (including
legal and auditing expenses, but not including any fees and expenses charged by
an agent for custody and safeguarding of Securities) and of counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by the
Trustee to protect the Trust or the rights and interests of the Unitholders; (e)
indemnification of the Trustee for any loss, liability or expense incurred by it
in the administration of the Trust not resulting from negligence, bad faith or
willful misconduct on its part or its reckless disregard for its obligations
under the Trust Agreement; (f) indemnification of the Sponsor for any loss,
liability or expense incurred in acting in that capacity without gross
negligence, bad faith
27
<PAGE>
or willful misconduct or its reckless disregard for its obligations under the
Trust Agreement; and (g) expenditures incurred in contacting Unitholders upon
termination of the Trust. The fees and expenses set forth herein are payable
out of the Trust and, when owing to the Trustee, are secured by a lien on the
Trust. Since the Securities are all common stocks, and the income stream
produced by dividend payments, if any, is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or all
expenses of the Trust. If the balances in the Income and Capital Accounts are
insufficient to provide for amounts payable by the Trust, the Trustee has the
power to sell Securities to pay such amounts. These sales may result in capital
gains or losses to Unitholders. See "Federal Tax Status." It is expected that
the income stream produced by dividend payments will be insufficient to meet the
expenses of the Trust and, accordingly, it is expected that Securities will be
sold to pay all of the fees and expenses of the Trust. The Trust may pay the
expenses of updating its registration statement. Unit investment trust sponsors
have historically paid these expenses.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to federal
tax law have been passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the Trust portfolio, of the Trust at the
Initial Date of Deposit, appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young, LLP, independent auditors, as set forth in
their report appearing elsewhere herein, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
--------------------
28
<PAGE>
<TABLE>
<CAPTION>
Contents Page
- -------- ----
<S> <C>
NASDAQ(Registered Trademark)
INDEX LICENSING AGREEMENT 2
THE TRUST FUND 3
THE TRUST PORTFOLIO 4
THE NASDAQ FINANCIAL INDEX 6
RISK FACTORS 7
FEDERAL TAX STATUS 10
PUBLIC OFFERING OF UNITS 13
Public Offering Price 13
Public Distribution of Units 15
Sponsor Profits 16
MARKET FOR UNITS 16
REDEMPTION 16
General 16
Computation of Redemption Price 18
RETIREMENT PLANS 18
UNITHOLDERS 18
Ownership of Units 18
Distributions to Unitholders 19
Distribution Reinvestment 20
Statements to Unitholders 20
Rights of Unitholders 21
INVESTMENT SUPERVISION 22
ADMINISTRATION OF THE TRUST 23
The Trustee 23
The Sponsor 24
The Evaluator 24
Amendment and Termination 24
Limitations on Liability 26
EXPENSES OF THE TRUST 26
LEGAL OPINIONS 28
INDEPENDENT AUDITORS 28
</TABLE>
<PAGE>
---------------
RANSON
UNIT
INVESTMENT
TRUSTS
---------------
---------------
NASDAQ
FINANCIAL
INDEX TRUST,
SERIES 1
---------------
-------------------
PROSPECTUS PART ONE
-------------------
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Part Two
Dated April 27, 1999
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.
NOTE: Part Two of this Prospectus May Not Be Distributed Unless Accompanied by
Part One.
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Essential Information
As of December 31, 1998
Sponsor and Evaluator: Ranson & Associates, Inc.
Trustee: The Bank of New York Co.
<TABLE>
<CAPTION>
General Information
<S> <C>
Aggregate Value of Securities in Portfolio (2) $18,492,283
Number of Units 1,889,448
Fractional Undivided Interest in the Trust per Unit 1/1,889,448
Aggregate Value of Securities per Unit $9.787
Public Offering Price:
Aggregate Value of Securities in Portfolio $18,492,283
Aggregate Value of Securities per Unit $9.787
Net Cash per Unit (1) $(.213)
Sales Charge of 4.90% of Public Offering
Price (5.152% of net amount invested) per Unit $.493
Public Offering Price per Unit $10.067
Redemption Price per Unit $9.574
</TABLE>
Minimum Value of the Trust under Trust Agreement may be Terminated
which Trust agreement may be if value of Trust is less than
terminated $160,144 (40% of the par value of
the Securities deposited in the
Trust).
Liquidation Period February 1, 2004 through February
28, 2004
Date of Trust Agreement December 3, 1997
Mandatory Termination Date January 31, 2004
Supervisor's Annual Surveillance Fee Maximum of $.003 per Unit
Evaluator's Annual Evaluation Fee Maximum of $.0029 per Unit
Trustee's Annual Fee $.0086 per Unit
Nasdaq Financial Index Trust Equal to the greater of .02%
Licensor Fee of the average net asset value or
$7,000 during the first year of the
Trust's life, $8,000 during the
second year of the Trust's life and
$9,000 thereafter.
Record Dates First day of January, April, July
and October.
Distribution Dates Fifteenth day of January, April,
July and October.
[FN]
(1) This amount, if any, represents principal cash or overdraft which is an
asset or liability of the Trust and is included in the Public Offering Price.
(2) Each Security is valued at the closing price on the Nasdaq Natonal Market.
<PAGE>
Report of Independent Auditors
Unitholders
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
We have audited the accompanying statement of assets and liabilities of Ranson
Unit Investment Trusts, Nasdaq Financial Index Trust, Series 1, including the
schedule of investments, as of December 31, 1998, and the related statement of
operations and changes in net assets for the period from December 3, 1997 (Date
of Deposit) to December 31, 1998. These financial statements are the
responsibility of the Trust's sponsor. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of investments owned as of December 31, 1998, by
correspondence with the custodial bank. An audit also includes assessing the
accounting principles used and significant estimates made by the sponsor, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ranson Unit Investment Trusts,
Nasdaq Financial Index Trusts, Series 1 at December 31, 1998, and the results of
its operations and changes in its net assets for the period indicated above in
conformity with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
April 13, 1999
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Statement of Assets and Liabilities
December 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Securities, at value (cost $18,183,414) $18,492,283
Dividends receivable 44,789
Organization costs 13,379
Receivable from Sponsor 21,096
---------
Total assets 18,571,547
Liabilities and net assets
Cash overdraft 167,129
Accrued liabilities 988
Due to unitholders 254,629
---------
422,746
Net assets, applicable to 1,889,448 Units outstanding:
Cost of Trust assets, exclusive of interest $18,183,414
Unrealized appreciation 308,869
Distributable funds (343,482)
--------- ---------
Net assets $18,148,801
=========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Statement of Operations
<TABLE>
<CAPTION>
Period from
December 3,
1997 to
December 31,
1998
<S> <C>
---------
Investment income $418,207
Expenses:
Trustee's fees and related expenses 37,180
Evaluator's and surveillance fees 7,978
Amortization of organizational costs 3,701
---------
Total expenses 48,859
---------
Net investment income 369,348
Realized and unrealized gain (loss) on investments:
Realized loss (495,208)
Unrealized appreciation during the period 308,869
---------
Net loss on investments (186,339)
---------
Net increase in net assets resulting from operations $183,009
=========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Ranson Unit Investments Trusts
Nasdaq Financial Index Trust
Series 1
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Period from
December 3,
1997 to
December 31,
1998
<S> <C>
---------
Operations:
Net investment income $369,348
Realized loss on investments (495,208)
Unrealized appreciation on investments during the period 308,869
---------
Net increase in net assets resulting from operations 183,009
Distributions to Unitholders:
Net investment income (316,400)
---------
Total distributions to Unitholders (316,400)
Capital transactions:
Issuance of 2,370,455 Units 22,687,692
Redemption of 481,007 Units (4,405,500)
---------
Total increase in net assets $18,148,801
Net assets:
At the beginning of the period -
---------
At the end of the period (including distributable
funds applicable to Trusts Units of $(343,482) at
December 31, 1998) $18,148,801
=========
Trust Units outstanding at the end of the period 1,889,448
=========
Net asset value per Unit at the end of the period $9.61
=========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Schedule of Investments
December 31, 1998
<TABLE>
<CAPTION>
Percentage (%)
of Total
Shares Name of Issuer Market Value Market Value
<S> <C> <C> <C>
- -------------- --------------- ------------ ------------
1,000 ADVANTA CORP-CLASS A $13,250.00 0.072
2,300 ARGONAUT GROUP INC. 56,350.00 0.305
3,900 ALFA CORPORATION 94,575.00 0.511
5,000 ALLIED CAPITAL CORP 86,562.50 0.468
2,700 AMCORE FINANCIAL INC. 61,804.69 0.334
4,400 AMRESCO INC. * 38,500.00 0.208
2,400 AMERIN CORP * 56,700.00 0.307
2,500 AMERICAN NATIONAL INSURANCE 206,875.00 1.119
5,900 ASSOCIATED BANC-CORP 201,706.25 1.091
5,200 ASTORIA FINANCIAL CORP 237,900.00 1.286
2,500 BERKLEY (WR) CORP 85,156.25 0.460
1,500 BANKNORTH GROUP INC. 56,437.50 0.305
2,700 BANK UNITED CORP. 105,975.00 0.573
2,100 BOK FINANCIAL CORPORATION * 98,962.50 0.535
12,900 POPULAR INC. 438,600.00 2.372
2,700 CITIZENS BANKING CORP MICH 91,125.00 0.493
5,800 COMMERCE BANCSHARES INC. 246,500.00 1.333
6,700 COMPASS BANCSHARES INC. 255,018.75 1.379
4,500 COMMUNITY FIRST BANKSHARES 94,781.25 0.513
15,900 CINCINNATI FINANCIAL CORP 582,337.50 3.149
4,900 CHECKFREE HOLDINGS * 114,537.50 0.619
15,700 CHARTER ONE FINANCIAL INC. 435,675.00 2.356
1,400 CORUS BANKSHARES INC. 45,150.00 0.244
3,800 DORAL FINANCIAL CORP 84,075.00 0.455
3,900 E*TRADE GROUP INC. * 182,446.88 0.987
6,400 ERIE INDEMNITY COMPANY-CLASS A 200,000.00 1.082
800 FIRST ALLIANCE CORPORATION * 3,000.00 0.016
1,600 FNB CORP/PA 45,200.00 0.244
800 FIRST CITIZENS BANCSHARES-
CLASS A 72,000.00 0.389
3,400 FIRST FINANCIAL BANCORP 98,387.50 0.532
25,400 FIFTH THIRD BANCORP 1,811,337.50 9.795
2,800 FIRST MIDWEST BANCORP INC./IL 106,575.00 0.576
17,900 FIRST SECURITY CORP/DEL 418,412.50 2.263
12,200 FIRST TENNESSEE NATIONAL CORP 464,362.50 2.511
6,000 FULTON FINANCIAL CORP 135,000.00 0.730
3,200 HARRIS FINANCIAL INC 43,600.00 0.236
20,100 HUNTINGTON BANCSHARES 604,256.25 3.268
1,000 HANCOCK HOLDING CO 45,500.00 0.246
2,800 HARLEYSVILLE GROUP INC. 72,275.00 0.391
3,800 HUBCO INC. 114,475.00 0.619
1,300 INTERNATIONAL BANCSHARES 65,812.50 0.356
7,200 INDEPENDENCE COMMUNITY BANK 114,750.00 0.621
3,400 IMPERIAL CREDIT INDUSTRIES * 28,475.00 0.154
2,100 IRWIN FINANCIAL CORP 57,093.75 0.309
4,900 KEYSTONE FINANCIAL INC. 181,300.00 0.980
2,100 MAF BANCORP INC. 55,650.00 0.301
6,800 MERCANTILE BANKSHARES CORP 261,800.00 1.416
10,100 MARSHALL & ILSLEY CORP 590,218.75 3.192
1,800 METRIS COMPANIES INC 90,562.50 0.490
2,900 NATIONAL BANCORP OF ALASKA INC. 97,875.00 0.529
9,500 NATIONAL COMMERCE BANCORPORATION 178,718.75 0.966
10,300 NORTHERN TRUST CORP 899,318.75 4.863
4,500 NORTHWEST SAVINGS BANK 43,875.00 0.237
3,100 OHIO CASUALTY CORP 127,487.50 0.689
2,600 OLD NATIONAL BANCORP 144,950.00 0.784
6,100 PEOPLES BANK BRIDGEPORT 168,512.50 0.911
2,300 PROVIDENT BANKSHARES 57,212.50 0.309
4,100 PROVIDENT FINANCIAL GROUP 154,775.00 0.837
8,300 PEOPLES HERITAGE FIN'L GROUP 166,000.00 0.898
2,500 PIONEER GROUP INC. * 49,375.00 0.267
3,000 PRESIDENTIAL LIFE CORP 59,625.00 0.322
1,200 PRICE ENTERPRISES INC. * 6,375.00 0.034
2,000 QUEENS COUNTY BANCORP INC. 59,500.00 0.322
21,000 REGIONS FINANCIAL CORP 846,562.50 4.578
2,900 RIGGS NATIONAL CORP WASH D C 59,087.50 0.320
1,700 T R FINANCIAL CORP 66,937.50 0.362
3,900 ROSLYN BANCORP INC. 83,850.00 0.453
13,000 SAFECO CORP 558,187.50 3.018
1,700 SEI INVESTMENT COMPANY 168,937.50 0.914
2,700 SELECTIVE INSURANCE GROUP 54,337.50 0.294
2,000 SILICON VALLEY BANCSHARES * 34,062.50 0.184
3,970 SKY FINANCIAL GROUP INC. 104,956.88 0.568
15,700 SOUTHTRUST CORP 579,918.75 3.136
4,000 ST PAUL BANCORP INC. 108,875.00 0.589
1,600 1ST SOURCE CORPORATION 53,600.00 0.290
2,600 S&T BANCORP 71,662.50 0.388
4,000 STATE AUTO FINANCIAL CORP 49,500.00 0.268
3,200 SUSQUEHANNA BANCSHARES INC. 65,500.00 0.354
15,200 SOVEREIGN BANCORP INC. 216,600.00 1.171
1,100 TRENWICK GROUP INC. 35,887.50 0.194
6,900 TRUSTMARK CORP 156,112.50 0.844
11,400 T. ROWE PRICE ASSOCIATES 390,450.00 2.111
2,500 TRUSTCO BANK CORP NY 75,000.00 0.406
4,100 UNITED BANKSHARES INC. 108,650.00 0.588
2,200 AMERCO * 61,462.50 0.332
4,400 UICI * 107,800.00 0.583
1,900 UMB FINANCIAL CORP 87,162.50 0.471
16,700 UNIONBANCAL CORPORATION 568,843.75 3.076
3,800 UNITRIN INC. 272,650.00 1.474
4,100 UST CORP 96,606.25 0.522
1,800 U.S. TRUST CORP 136,800.00 0.740
3,800 WESTAMERICA BANCORPORATION 139,650.00 0.755
4,000 WESTERNBANK PUERTO RICO 63,500.00 0.343
3,600 WEBSTER FINANCIAL CORP 98,775.00 0.534
5,000 WASHINGTON FEDERAL INC. 133,437.50 0.722
3,200 WILMINGTON TRUST CORPORATION 197,200.00 1.066
2,000 WESBANCO INC. 59,000.00 0.319
2,200 WHITNEY HOLDING CORP 82,500.00 0.446
7,400 ZIONS BANCORPORATION 461,575.00 2.496
--------------- --------
TOTAL: $18,492,283.44 100.000
=============== ========
</TABLE>
[FN]
* Non-income producing.
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Notes to Financial Statements
1. Significant Accounting Policies
Trust Sponsor and Evaluator
Ranson & Associates, Inc. serves as the Trust's sponsor and evaluator.
Valuation of Investments
During the Trust's primary offering period, Stocks are stated at offering prices
as determined by Ranson & Associates, Inc. At the end of the primary period
(December 3, 1998) and thereafter, the Stocks are valued at closing bid prices
as determined by Ranson & Associates, Inc.
Cost of Investments
Cost of the Trust's Stocks is based on the offer prices of the Stocks on the
dates of deposits of such Securities acquired during the primary sales period,
as determined by the Evaluator. The cost of investments sold is determined on a
first-in, first-out basis.
Investment Income
Dividends are recorded on the ex-dividend date.
Organizations Costs
Organizations Costs in connection with the formation of the Trust amounted to
$17,080. Such costs are being amortized on a straight line basis over five
years.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Trust's sponsor to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from such estimates.
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized appreciation at December 31, 1998:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation $1,524,866
Gross unrealized depreciation (1,215,997)
----------
Net unrealized appreciation $308,869
=========
</TABLE>
3. Federal Income Taxes
The Trust is organized as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). It is the Trust's
policy to comply with the special provisions of the Code available to regulated
investment companies. Such provisions were complied with and, therefore, no
federal income tax provision is required. The accumulated net realized capital
loss on sales of investments for federal income tax purposes at December 31,
1998, amounting to $495,208 is available to offset future taxable gains. If not
applied, the carryover expires in 2006.
<PAGE>
Ranson Unit Investment Trusts
Nasdaq Financial Index Trust
Series 1
Notes to Financial Statements (continued)
4. Other Information
Cost to Investors
The cost to original investors of Units of the Trust was based on the aggregate
offering price of the Stocks on the date of an investor's purchase, plus a sales
charge of 4.90% of the Public Offering Price (equivalent to 5.15% of the net
amount invested). The Public Offering Price for secondary market transactions
is based on the aggregate bid price of the Stocks plus or minus a pro rata share
of cash or overdraft in the Principal Account, if any, on the date of an
investor's purchase, plus a sales charge of 4.90% of the Public Offering Price
(equivalent to 5.152% of the net amount invested).
Distributions
Distributions of net investment income to Unitholders are declared and paid
quarterly. Income distributions, on a record date basis, are as follows:
<TABLE>
<CAPTION>
Period from
Distribution December 3, 1997 to
Plan December 31, 1998
<S> <C> <C>
- ----- Per Unit Total
Quarterly --------- ----------
$.143 $306,905
</TABLE>
In addition, the Trust redeemed Units with proceeds from the sale of Stocks as
follows:
<TABLE>
<CAPTION>
Period from
December 3,
1997 to
December 31,
1998
<S> <C>
----------
Principal portion $4,405,500
Net investment income accrued 9,495
----------
$4,414,995
=========
Units 481,007
=========
</TABLE>
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent Auditors"
and to the use of our report dated April 13, 1999, in this Post-Effective
Amendment to the Registration Statement (Form S-6) and related Prospectus of
Ranson Unit Investment Trusts, Nasdaq Financial Index Trust, Series 1 dated
April 27, 1999.
Ernst & Young LLP
Kansas City, Missouri
April 27, 1999
<PAGE>
Contents of Post-Effective Amendment
To Registration Statement
This Post-Effective amendment to the Registration Statement comprises the
following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, The Registrant,
Ranson Unit Investment Trusts Series 61, 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 Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Wichita, and State of Kansas, on the
28th day of April, 1999.
Ranson Unit Investment Trusts Series 61
Registrant
By: Ranson & Associates, Inc.
Depositor
By: Robin Pinkerton
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on April 28, 1999 by the
following persons, who constitute a majority of the Board of Directors of Ranson
& Associates, Inc.
Signature Title
Douglas K. Rogers Executive Vice and President and Director
Douglas K. Rogers
Alex R. Meitzner Chairman of the Board and Director
Alex R. Meitzner
Robin K. Pinkerton President, Secretary, Treasurer and
Robin K. Pinkerton Director
Robin Pinkerton
An executed copy of each of the related powers of attorney was filed with
the Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of The Kansas Tax-Exempt Trust, Series 51 (File No. 33-
46376) and Series 52 (File No. 33-47687) and the same are hereby incorporated
herein by this reference.
