<PAGE>
Bank Stock Portfolio Series 2
File No. 33-55217
Investment Company Act No. 811-5065
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact name of Trust:
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
B. Name of Depositor:
DEAN WITTER REYNOLDS INC.
C. Complete address of Depositor's principal executive
office:
DEAN WITTER REYNOLDS INC.
Two World Trade Center
New York, New York 10048
D. Name and complete address of agent for service:
Mr. Michael D. Browne
Dean Witter Reynolds Inc.
Unit Trust Department
Two World Trade Center, 59th Floor
New York, New York 10048
Copy to:
Kenneth W. Orce, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
The Registrant has registered an indefinite number of
Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940,
as amended. On February 28, 1996, the Registrant
filed the Rule 24f-2 Notice for its most recent
fiscal year.
Check box if it is proposed that this filing should
/x/ become effective immediately upon filing pursuant to
paragraph(b) of Rule 485.
<PAGE>
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction 1
as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. a. Name of Trust Front Cover
b. Title of securities issued
2. Name and address of Depositor Table of Contents
3. Name and address of Trustee Table of Contents
4. Name and address of principal Table of Contents
Underwriter
5. Organization of Trust Introduction
6. Execution and termination of Introduction;
Trust Agreement Administration of the
Trust-Termination
7. Changes of name <F30>
8. Fiscal Year Included in Form N-8B-2
9. Litigation <F30>
II. General Description of the Trust
and Securities of the Trust
10. General Information regarding
Trust's Securities and Rights
of Holders
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
a. Type of Securities Rights of Unit Holders-
(Registered or Bearer) Unit Holders
b. Type of Securities Administration of the
(Cumulative or Trust-Distribution
Distributive)
c. Rights of Holders as to Rights of Unit Holders-
withdrawal or redemption Unit Holders; Redemption;
Public Offering of Units-
Secondary Market; Exchange
Option
d. Rights of Holders as to Public Offering of
conversion, transfer, Units-Secondary Market;
partial redemption and Exchange Option;
similar matters Redemption; Rights of Unit
Holders-Unit Holders
e. Lapses or defaults with <F30>
respect to periodic payment
plan certificates
f. Voting rights as to Rights of Unit Holders-
Securities under the Certain Limitations;
Indenture Administration of the
Trust-Amendment; -Termination
g. Notice to Holders as to
change in:
1. Composition of Assets Administration of the
of Trust Trust-Reports to Unit Holders;
-Portfolio Supervision; The
Trust-Summary Description of
the Portfolio
2. Terms and Conditions Administration of the
of Trust's Securities Trust-Amendment
3. Provisions of Trust Administration of the
Trust-Amendment
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
4. Identity of Depositor Miscellaneous-
and Trustee Sponsor; -Trustee
h. Consent of Security Holders
required to change:
1. Composition of assets Administration of the
of Trust Trust-Amendment
2. Terms and conditions Administration of the
of Trust's Securities Trust-Amendment
3. Provisions of Indenture Administration of the
Trust-Amendment
4. Identity of Depositor <F30>
and Trustee
11. Type of securities comprising The Trust-Summary
units Description of the Portfolio;
-Special Considerations;
-Objectives and Securities
Selection
12. Type of securities comprising <F30>
periodic payment certificates
13. a. Load, fees, expenses, etc. Summary of Essential
Information; Public Offering
of Units-Public Offering
Price; -Profit of Sponsor;
-Volume Discount; Exchange
Option; Expenses and Charges
b. Certain information <F30>
regarding periodic payment
certificates
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
c. Certain percentages Summary of Essential
Information; Public Offering
of Units-Public Offering
Price;-Profit of
Sponsor;-Volume Discount;
Exchange Option
d. Price differentials Public Offering of Units-
Public Offering Price
e. Certain other loads, Rights of Unit Holders-
fees, expenses, etc. Unit Holders
payable by holders
f. Certain profits receivable Public Offering of Units-
by depositor, principal Profit of Sponsor
underwriters, trustee or
affiliated persons
g. Ratio of annual charges <F30>
to income
14. Issuance of trust's securities Introduction; Rights of Unit
Holders-Unit Holders
15. Receipt and handling of Public Offering of Units-
payments from purchasers Profit of Sponsor
16. Acquisition and disposition Introduction;
of underlying securities Administration of the
Trust-Amendment; -Termination;
The Trust-Summary Description
of the Portfolio; -Objectives
and Securities Selection
17. Withdrawal or redemption Redemption; Public Offering of
Units-Secondary Market;
Exchange Option; Rights of
Unit Holders
18. a. Receipt and disposition Administration of the
of income Trust; Reinvestment Program
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
b. Reinvestment of Reinvestment Program
distributions
c. Reserves or special fund Administration of the Trust-
Distribution
d. Schedule of distribution <F30>
19. Records, accounts and report Administration of the
Trust-Records and Accounts;
-Reports to Unit Holders
20. Certain miscellaneous Administration of the
provisions of the trust Trust-Amendment;
agreement -Termination; Resignation,
Removal and
Liability-Regarding the
Trustee;-Regarding the Sponsor
21. Loans to security holders <F30>
22. Limitations on liability of Resignation, Removal and
depositor, trustee, custodian Liability
etc.
23. Bonding arrangements Included on Form N-8B-2
24. Other material provisions of <F30>
trust agreement
III. Organization Personnel and
Affiliated Persons of Depositor
25. Organization of Depositor Miscellaneous-Sponsor
26. Fees received by Depositor Expenses and Charges-Fees;
Public Offering of Units-
Profit of Sponsor
27. Business of Depositor Miscellaneous-Sponsor; and
Included in Form N-8B-2
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
28. Certain information as to Included in Form N-8B-2
officials and affiliated
persons of Depositor
29. Voting securities of Depositor Included in Form N-8B-2
30. Persons controlling Depositor <F30>
31. Compensation of Officers and <F30>
Directors of Depositor
32. Compensation of Directors of <F30>
Depositor
33. Compensation of employees of <F30>
Depositor
34. Remuneration of other <F30>
persons for certain services
rendered to trust
IV. Distribution and Redemption of Securities
35. Distribution of trust's Public Offering of Units-
securities by states Public Distribution
36. Suspension of sales of <F30>
trust's securities
37. Revocation of authority to <F30>
distribute
38. a. Method of distribution Public Offering of Units
b. Underwriting agreements
c. Selling agreements
39. a. Organization of principal Miscellaneous-Sponsor
underwriter
b. N.A.S.D. membership of
principal underwriter
40. Certain fees received by Public Offering of Units-
principal underwriter Profit of Sponsor
41. a. Business of principal Miscellaneous-Sponsor
underwriter
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
b. Branch officers of principal <F30>
underwriter
c. Salesman of principal <F30>
underwriter
42. Ownership of trust's securities <F30>
by certain persons
43. Certain brokerage commissions <F30>
received by principal underwriter
44. a. Method of valuation Public Offering of Units-
Public Offering Price;
-Secondary Market
b. Schedule as to offering <F30>
price
c. Variation in offering Public Offering of Units-
price to certain persons Volume Discount; Exchange
Option
45. Suspension of redemption rights <F30>
46. a. Redemption valuation Public Offering of Units-
Secondary Market;
Redemption-Right of
Redemption; -Computation of
Redemption Value
b. Schedule as to redemption <F30>
price
47. Maintenance of position in See items 10(d), 44 and
underlying securities 46
V. Information concerning the Trustee or Custodian
48. Organization and regulation Miscellaneous-Trustee
of Trustee
49. Fees and expenses of Trustee Expenses and Charges
50. Trustee's lien Expenses and Charges
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
VI. Information concerning Insurance
of Holders of Securities
51. a. Name and address of <F30>
Insurance Company
b. Type of policies <F30>
c. Type of risks insured and <F30>
excluded
d. Coverage of policies <F30>
e. Beneficiaries of policies <F30>
f. Terms and manner of <F30>
cancellation
g. Method of determining <F30>
premiums
h. Amount of aggregate <F30>
premiums paid
i. Persons receiving any part <F30>
of premiums
j. Other material provisions <F30>
of the Trust relating to
insurance
VII. Policy of Registrant
52. a. Method of selecting and Introduction; The Trust-
eliminating securities Objectives and Securities
from the Trust Selection; -Summary
Description of the Portfolio;
Administration of the
Trust-Portfolio Supervision
b. Elimination of securities <F30>
from the Trust
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
c. Substitution and elimination Introduction; The Trust-
of Securities from the Objectives and Securities
Trust Selection; -Summary
Description of the Portfolio;
Administration of the
Trust-Portfolio Supervision
d. Description of any <F30>
fundamental policy of the
Trust
53. a) Taxable status of the Tax Status of the Trust
Trust
b) Qualification of the <F30>
Trust as regulated
investment company
VIII. Financial and Statistical Information
54. Information regarding the <F30>
Trust's past ten fiscal years
55. Certain information regarding <F30>
periodic payment plan
certificates
56. Certain information regarding <F30>
periodic payment plan
certificates
57. Certain information regarding <F30>
periodic payment plan
certificates
58. Certain information regarding <F30>
periodic payment plan
certificates
59. Financial statements Statement of Financial
(Instruction 1(c) to Form S-6) Condition
____________________
<F30> Not applicable, answer negative or not required.
<PAGE>
LOGO
DEAN WITTER SELECT EQUITY TRUST
Bank Stock Portfolio Series 2
(A Unit Investment Trust)
This Trust was formed for the purpose of providing capital appreciation and
current income through investment in a fixed portfolio consisting of
publicly traded common stocks issued by U.S. banks and bank holding
companies. The value of the Units of the Trust will fluctuate with the
value of the Portfolio of underlying Securities. Minimum Purchase:
$1,000.
Sponsor: LOGO DEAN WITTER REYNOLDS INC.
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.
Read and retain this Prospectus for future reference.
Units of the Trust are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and the Units are not federally insured by the
Federal Deposit Insurance Corporation, Federal Reserve Board, or any other
agency.
Prospectus dated November 14, 1996
<PAGE>
THIS PROSPECTUS DOES NOT CONTAIN ALL OF THE INFORMATION WITH RESPECT TO THE
INVESTMENT COMPANY SET FORTH IN ITS REGISTRATION STATEMENT AND EXHIBITS
RELATING THERETO WHICH HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
TABLE OF CONTENTS
Page
Table of Contents................................................. A-1
Summary of Essential Information.................................. A-3
Introduction...................................................... 1
The Trust......................................................... 4
Risk Factors - Special Considerations....................... 4
Summary Description of the Portfolio........................ 4
Objective and Securities Selection.......................... 8
Distributions............................................... 9
Tax Status of the Trust........................................... 9
Public Offering of Units.......................................... 14
Public Offering Price....................................... 14
Public Distribution......................................... 15
Secondary Market............................................ 16
Profit of Sponsor........................................... 16
Volume Discount............................................. 17
Exchange Option................................................... 18
Reinvestment Program.............................................. 20
Redemption........................................................ 21
Right of Redemption......................................... 21
Computation of Redemption Price............................. 23
Postponement of Redemption.................................. 24
Rights of Unit Holders............................................ 24
Unit Holders................................................ 24
Certain Limitations......................................... 25
Expenses and Charges.............................................. 26
Fees........................................................ 26
Other Charges............................................... 26
Administration of the Trust....................................... 27
Records and Accounts........................................ 27
Distribution................................................ 28
Portfolio Supervision....................................... 28
Voting of the Portfolio Securities.......................... 30
Reports to Unit Holders..................................... 30
Amendment................................................... 31
Termination................................................. 32
A-1
<PAGE>
Page
Resignation, Removal and Liability................................ 33
Regarding the Trustee....................................... 33
Regarding the Sponsor....................................... 34
Miscellaneous..................................................... 35
Sponsor..................................................... 35
Trustee..................................................... 35
Legal Opinions.............................................. 35
Auditors.......................................................... 36
Independent Auditor's Report...................................... F-1
Sponsor:
Dean Witter Reynolds Inc.
2 World Trade Center
New York, New York 10048
Trustee:
The Bank of New York
101 Barclay Street
New York, New York 10286
1-800-545-7255
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THIS INVESTMENT COMPANY NOT CONTAINED IN
THIS PROSPECTUS; AND ANY INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH
OFFER IN SUCH STATE.
A-2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SUMMARY OF ESSENTIAL INFORMATION
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
As of August 31, 1996
Number of Units 46,689,489<F4>
Fractional Undivided Interest in Trust Represented by Each Unit 1/46,689,489th
Public Offering Price Per 1,000 Units:
Aggregate Value of Securities in the Trust $68,129,904
Divided by 46,689,489 Units (times 1,000) $ 1,459.21
Plus Sales Charge of 4.25% of Public Offering Price<F1> (4.439% of net amount invested in Securities)64.77
Public Offering Price per 1,000 Units 1,523.98
Plus amount per 1,000 Units of Undistributed Principal and Net Investment Income 12.01
Total $1,535.99
Sponsor's Repurchase Price per 1,000 Units and Redemption Price per 1,000 Units (based on the value
of the underlying Securities, $64.77 less than the Public Offering Price per 1,000 Units plus
undistributed principal and net investment income) $1,471.22
<S> <S>
Evaluation Time Close of trading on the New York Stock Exchange
(currently 4:00 PM New York time).
Record Dates Quarterly: March 1, June 1, September 1
and December 1 of each year.
Distribution Dates Quarterly: March 15, June 15, September 15 and
December 15 of each year.
Minimum Principal Distribution No distribution need be made from the Principal Account
if the balance therein is less than $1.00 per 1,000 Units
outstanding.
In-kind Distribution Date February 1, 2000
Liquidation Period Not to exceed 10 business days after the In-Kind
Distribution Date.<F3>
Mandatory Termination Date February 15, 2000
Discretionary Liquidation Amount The Trust may be terminated by the Sponsor if the
value of the portfolio of the Trust at any time is less
than $26,595,166 of the market value of the Securities
deposited in the Trust.<F1><F5>
Trustee's Fee (including estimated expenses)<F2> $1.00 per 1,000 Units.
Sponsor's Portfolio Supervision Fee<F2> Maximum of $.25 per 1,000 Units
<F1>Volume purchasers of Units are entitled to a reduced sales charge. (See: "Public Offering of
Units - Volume Discount" in this Prospectus.
<F2>See "Expenses and Charges" in this Prospectus. The fee accrues daily and is payable on each Distribution
Date. Estimated dividends from the Securities, based on the last dividends actually paid, are expected by the
Sponsor to be sufficient to pay the estimated expenses of the Trust.
<F3>The final distribution will be made within 3 business days following the receipt of proceeds from the sale
of all Portfolio Securities. (See "Administration of Trust - Termination" in this Prospectus).
<F4>The number of Units will be increased as the Sponsor deposits additional Securities into the Trust. (See
"Introduction" in this Prospectus.)
<F5>This figure will increase based on additional deposits.
A-3
</TABLE>
A-3
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
(Continued)
THE TRUST -- The Dean Witter Select Equity Trust, Bank Stock
Portfolio Series 2 (the "Trust") is a unit investment trust composed of
publicly traded common stocks or contracts to purchase such stocks (the
"Securities"). The objectives of the Trust are to provide capital
appreciation and current income through an investment for approximately
five years from the initial Date of Deposit in a fixed portfolio consisting
of 37 publicly traded common stocks issued by U.S. banks and bank holding
companies. The Securities may appreciate or depreciate in value (or pay
dividends) depending on the full range of economic and market influences
affecting corporate profitability, the financial condition of issuers, the
prices of equity securities in general and the Securities in particular and
with changes in both domestic and international economic and political
conditions. Therefore, there is no guarantee that the objectives of the
Trust will be achieved. After the initial Date of Deposit, the Sponsor
may, under the Indenture and Agreement (as hereinafter defined), deposit
additional Securities which may result in a corresponding increase in the
number of Units outstanding.
TERMINATION -- The Trust will terminate approximately five
years after the initial Date of Deposit regardless of market conditions at
that time. Prior to termination of the Trust, the Trustee will begin to
sell the Securities held in the Trust over a period not to exceed 10
consecutive business days (the "Liquidation Period"). Monies received upon
such sale of Securities will be held uninvested in non-interest bearing
accounts created by the Indenture until distributed pro rata to Unit
Holders on or about February 15, 2000 and will be of benefit to the Trustee
during such period. During the life of the Trust, Securities will not be
disposed of solely as a result of normal fluctuations in market value.
Because the Trust is not managed and the Securities can only be sold during
the Liquidation Period or under certain other limited circumstances
described herein, the proceeds received from the sale of Securities may be
less than could be obtained if the sale had taken place at a different
time. Depending on the volume of Securities sold and the prices of and
demand for Securities at the time of such sale, the sales of Securities
from the Trust may tend to depress the market prices of such Securities and
hence the value of the Units, thus reducing termination proceeds available
to Unit Holders. In order to mitigate potential adverse price consequences
of heavy volume trading in the Securities taking place over a short period
of time and to provide an average market price for the Securities, the
Trustee will follow procedures set forth in the Indenture to sell the
Securities in an orderly fashion over a period not
A-4
<PAGE>
to exceed the Liquidation Period. The Sponsor can give no assurance,
however, that such procedures will mitigate negative price consequences or
provide a better price for such Securities. The Trust may terminate
earlier than on the Mandatory Termination Date if the value of the Trust is
less than the Discretionary Liquidation Amount set forth herein. (See:
"Administration of the Trust -- Termination".)
DISTRIBUTIONS -- The Trustee will distribute any dividends and
any proceeds from the disposition of Securities not used for redemption of
Units or purchase of substitute securities received by the Trust on each
Distribution Date to holders of record on the next preceding Record Date.
Upon termination of the Trust, the Trustee will distribute to each Unit
Holder of record his pro rata share of the Trust's assets, less expenses.
The sale of Securities in the Trust in the period prior to termination and
upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time due to impending or
actual termination of the Trust. For this reason, among others, the amount
realized by a Unit Holder upon termination may be less than the amount paid
by such Unit Holder. (See: "Administration of the Trust --
Distribution".)
The Sponsor anticipates that, based upon the last dividends
actually paid by the companies listed in the "Schedule of Portfolio
Securities", dividends from the Securities will be sufficient (i) to pay
expenses of the Trust and (ii) after such payment, to make distributions to
Unit Holders as described herein. (See: "Expenses and Charges" and
"Administration of the Trust -- Distribution".)
PUBLIC OFFERING PRICE -- The Public Offering Price per Unit is
computed on the basis of the aggregate evaluation of the underlying
Securities next computed after receipt of a purchase order plus cash on
hand in the Trust, divided by the number of Units outstanding, plus a sales
charge of 4.439% of such evaluation per Unit (the net amount invested);
this results in a sales charge of 4.25% of the Public Offering Price. The
sales charge of 4.25% will decline over the life of the Trust in the manner
described below. On September 28, 1997, the sales charge will decline to
3.00% (3.093% of the net amount invested); on September 28, 1998, it will
decline to 2.50% (2.564% of the net amount invested); and on September 28,
1999 it will decline to 1.50% (1.533% of the net amount invested). The
sales charge is reduced on a graduated scale for sales involving at least
$25,000. (See: "Public Offering of Units -- Volume Discount".)
MARKET FOR UNITS -- The Sponsor, though not obligated to do so,
intends to maintain a market for the Units. If such market is not
maintained, a Unit Holder will be able to dispose
A-5
<PAGE>
of its Units through redemption at prices based on the aggregate market
value of the underlying Securities. (See: "Redemption".) Market
conditions may cause such prices to be greater or less than the amount paid
for Units.
RISK FACTORS - SPECIAL CONSIDERATIONS -- An investment in Units
of the Trust should be made with an understanding of the risks inherent in
an investment in common stocks, including risks associated with the limited
rights of holders of equity securities to receive payments from issuers;
such rights are inferior to those of creditors and holders of debt
obligations. Holders of common stock have the right to receive dividends
only when, as and if such dividends are declared by the issuer's board of
directors. Holders of preferred stocks 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 ordinarily participate in other
amounts available for distribution by the issuing corporation. Investors
should also be aware that the value of the underlying Securities in the
Portfolio may fluctuate in accordance with changes in the value of common
stocks generally, changes in the financial condition of the issuers of the
Securities, changes in the industries represented in the Portfolio and
changes in economic and political conditions affecting the issuers of the
Securities.
SPECIAL CHARACTERISTICS OF THE TRUST - The Banking Industry -
The Sponsor is offering this series of the Dean Witter Select Equity Trust
in order to take advantage of the attractive potential for capital
appreciation and dividend yield that the securities of the U.S. banks and
bank holding companies included in the Portfolio of the Trust offer. The
Sponsor has identified the banking industry in general, and the Securities
in the Portfolio of the Trust in particular, as offering the potential for
capital appreciation and current income over the life of the Trust based on
the following factors: improving quality of assets and earnings trends,
the attractive dividend yield and the potential for growth, the potential
for increased consolidation in the industry and potential benefits from
reduced regulation of the banking industry including, the easing or
elimination of federal or state restrictions on interstate banking and
engaging in certain securities activities. There can be no assurance,
however, that any of the foregoing trends or factors will develop or
continue, or that if they develop or continue, will have the beneficial
effects that the Sponsor anticipates.
Securities Selection - The Securities of U.S. banks and bank
holding companies included in this series of the Dean Witter Select Equity
Trust were screened and selected by the Sponsor's Unit Trust Research
Department after a thorough screening and analysis of a number of factors
including: (i)
A-6
<PAGE>
market capitalization and asset size; (ii) dividend yield; (iii) price to
earnings ratio; (iv) fundamental economic and business characteristics; (v)
technical analysis; (vi) geographic diversification and (vii) the
identification of special situations.
There are certain risks involved in investing in the Trust due
to its concentration in stocks of one industry. The Trust's concentration
in securities of a single industry sector means that the Trust's
performance is closely related to the specific industry conditions as well
as general market conditions experienced in all sectors of the economy as a
whole. As a result, changes in the economic conditions affecting the
selected sector will tend to have a greater impact on the value of Units of
this Trust than on units of trusts which invest in a broader based
portfolio of stocks. These factors may tend to make the value of Trust
Units more volatile than other investments.
The Sponsor may deposit additional Securities which were
originally selected through this process following the initial Date of
Deposit. The Trust will continue to hold Securities so selected during the
life of the Trust unless disposed of for the reasons set forth in
"Administration of the Trust -- Portfolio Supervision", and the Sponsor may
continue to create, sell and maintain a secondary market for, Units of the
Trust even through Dean Witter's evaluation of the attractiveness of the
Securities may have changed subsequent to the Date of Deposit.
Portfolio Characteristics - The Portfolio of the Trust consists
of 37 issues of Securities, all of which are common stocks.
On September 30, 1996, the aggregate market value of the
Securities in the Trust was $70,494,365.94.
MINIMUM PURCHASE -- $1,000.
A-7
<PAGE>
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
_________________________
INTRODUCTION
This series of the Dean Witter Select Equity Trust (the
"Trust") was created on September 27, 1994 under the laws of the State of
New York pursuant to a Trust Indenture and Agreement (the "Indenture") and
a related Reference Trust Agreement (the "Agreement") (collectively, the
"Indenture and Agreement")* between Dean Witter Reynolds Inc. (the
"Sponsor") and The Bank of New York (the "Trustee"). The Sponsor is a
principal operating subsidiary of Dean Witter, Discover & Co. ("DWDC"), a
publicly-held corporation. (See: "Miscellaneous -- Sponsor", herein.)
The objectives of the Trust are capital appreciation and current income
through an investment for approximately five years from the initial Date of
Deposit in a portfolio consisting of publicly traded common stocks of U.S.
banks and bank holding companies. There is, of course, no assurance that
these objectives will be met.
On the date of creation of the Trust (the "Date of Deposit"),
the Sponsor deposited with the Trustee certain securities and contracts and
funds (represented by irrevocable letter(s) of credit issued by major
commercial bank(s)) for the purchase of such securities (collectively, the
"Securities") at prices equal to the market value of such Securities as
determined by the Trustee as of the Date of Deposit. (See: "Schedule of
Portfolio Securities", herein.) The Trust was created simultaneously with
the deposit of the Securities with the Trustee and the execution of the
Indenture and Agreement. The Trustee then immediately delivered to the
Sponsor a certificate of beneficial interest (the "Certificate")
representing the units (the "Units") comprising the entire ownership of the
Trust. Through this prospectus (the "Prospectus"), the Sponsor is offering
the Units, including Additional Units, as defined below, for sale to the
public. The holders of Certificates (the "Unit Holders") will have the
right to have their Units redeemed at a price based on the market value of
the Securities (the "Redemption Price") if they cannot be sold in the
secondary market which the Sponsor, although not obligated to, proposes to
maintain. In addition, the Sponsor may offer for sale, through this
Prospectus, Units
___________________
* Reference is hereby made to said Indenture and Agreement and any
statements contained herein are qualified in their entirety by the
provisions of said Indenture and Agreement.
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which the Sponsor may have repurchased in the secondary market or upon the
tender of such Units for redemption. The Trustee has not participated in
the selection of Securities for the Trust, and neither the Sponsor nor the
Trustee will be liable in any way for any default, failure or defect in any
Securities.
With the deposit of the Securities in the Trust on the Date of
Deposit, the Sponsor established a proportionate relationship between the
number of shares of each Security in the Portfolio of the Trust (the
"Portfolio"). The Sponsor is permitted under the Indenture and Agreement
to deposit additional Securities during the life of the Trust, resulting in
an increase in the number of Units outstanding (the "Additional Units").
Such Additional Units may be continuously offered for sale to the public by
means of this Prospectus. Any additional Securities deposited in the Trust
in connection with the sale of these Additional Units will maintain, to the
extent practicable, the proportionate relationship between the number of
shares of each Security in the Portfolio on the day of deposit of such
additional Securities and any cash not held for distribution to Unit
Holders prior to the deposit. The original proportionate relationships are
subject to adjustment under certain limited circumstances. (See:
"Administration of the Trust -- Portfolio Supervision", herein.) Each
Additional Unit issued after a permitted change in the shares held in the
Trust will represent the same number and type of shares that were
represented by a Unit immediately prior to the issuance of the Additional
Unit. The number and identity of shares in the Trust will be adjusted to
reflect the disposition of Securities and/or the receipt of a stock
dividend, a stock split or other distribution with respect to shares or the
reinvestment of the proceeds of certain dispositions of Securities. It may
not be possible to maintain the original proportionate relationship among
the Securities on the initial date of deposit, due to, among other reasons,
inability to purchase Securities, unavailability of Securities and/or
restrictions on the purchase of shares. If a Security is unavailable for
purchase and deposit in the Trust, additional shares of other Securities
then in the Portfolio of the Trust may be deposited to create Additional
Units. The Sponsor may deposit cash with the Trustee with instructions to
the Trustee to purchase such unavailable Securities when available. The
Sponsor may acquire large volumes of additional Securities for deposit into
the Trust over a short period of time. Such acquisitions may tend to raise
the market prices of these Securities. The Sponsor cannot currently
predict the actual market impact of the Sponsor's purchases of additional
Securities, because the actual volume of Securities to be purchased and the
supply and price of such Securities is not known. The additional
Securities so received will, however, have a tax cost basis to the Trust
equal to their values on the date of transfer to the
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Trust. Such tax cost basis will likely differ from the tax cost basis of
Securities transferred to the Trust at other times such as the Date of
Deposit. The amount of gain or loss realized on sale of a particular
Security by the Trust depends upon the tax cost basis of the particular
Security sold. Hence, the amount of capital gain or loss realized by the
Trust and passed through to Unit Holders will not be the same as the
capital gain or loss which would have been realized by a particular Unit
Holder if such Unit Holder had purchased and sold the Securities involved
without the intervention of the Trust.
Units will be sold to investors at the Public Offering Price
next computed after receipt of the investor's order to purchase Units, if
Units are available to fill orders on the day that that price is set. If
Units are not available or are insufficient to fill the order, the
investor's order will be rejected by the Sponsor. The number of Units
available may be insufficient to meet demand because of the Sponsor's
inability to or decision not to purchase and deposit underlying Securities
in amounts sufficient to maintain the proportionate numbers of shares of
each Security as required to create additional Units. The Sponsor may, if
unable to accept orders on any given day, offer to execute the order as
soon as sufficient Units can be created. An investor who agrees to this
will be deemed to place a new order for that number of Units each day until
that order is accepted. The investor's order will then be executed, when
Units are available, at the Public Offering Price next calculated after
such continuing order is accepted. The investor will, of course, be able
to revoke his purchase order at any time prior to acceptance by the
Sponsor. The Sponsor will execute orders to purchase in the order it
determines that they are received, i.e., orders received first will be
filled first, except that indications of interest prior to the
effectiveness of the registration of the offering of Trust Units which
become orders upon effectiveness will be accepted according to the order in
which the indications of interest were received.
On August 30, 1996, each Unit represented the fractional
undivided interest in the Securities and net income of the Trust set forth
under "Summary of Essential Information". Thereafter, if any Units are
redeemed, the amount of Securities in the Trust will be reduced, and the
fractional undivided interest represented by each remaining Unit in the
balance of the Trust will be increased. However, if Additional Units are
issued by the Trust, the aggregate value of the Securities in the Trust
will be increased by amounts allocable to such Additional Units and the
fractional undivided interest in the balance will be decreased. In both
cases, the interest in the Securities represented by each Unit will remain
unchanged. Units will remain outstanding until
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redeemed upon tender to the Trustee by any Unit Holder (which may include
the Sponsor) or until the termination of the Trust pursuant to the
Indenture and Agreement.
THE TRUST
Risk Factors - Special Considerations
An investment in Units of the Trust should be made with an
understanding of the risks which an investment in publicly traded common
stock may entail, including the risk that the value of the Portfolio and
hence of the Units will decline with decreases in the market value of the
Securities. The Trust will be terminated and liquidated no later than the
Mandatory Termination Date set forth in the "Summary of Essential
Information", herein, and the Securities will be sold or distributed "in-
kind", regardless of market conditions at that time. The Trust may be
terminated earlier under certain conditions. (See: "Administration of the
Trust -- Termination".)
Summary Description of the Portfolio
An investment in Units of the Trust should be made with an
understanding that the value of the underlying Securities, and therefore
the value of Units, will fluctuate depending upon the full range of
economic and market influences which may affect the market value of such
Securities. Certain risks are inherent in an investment in equity
securities, including the risk that the financial condition of one or more
of the issuers of the Securities may worsen or the general condition of the
stock market may weaken. In such case, the value of the Securities and
hence the value of Units may decline. Common stocks are susceptible to
general stock market movements and to volatile and unpredictable increases
and decreases in value as market confidence in and perceptions of the
issuers change from time to time. Such perceptions are based upon varying
reactions to such factors as expectations regarding domestic and foreign
economic, monetary and fiscal policies, inflation and interest rates,
currency exchange rates, economic expansion or contraction, and global or
regional political, economic or banking crises. In addition, investors
should understand that there are certain payment risks involved in owning
equity securities, including risks arising from the fact that holders of
common and preferred stocks have rights to receive payments from the
issuers of those stocks that are generally inferior to those of creditors
of, or holders of debt obligations issued by, such issuers. Furthermore,
the rights of holders of common stocks are inferior to the rights of
holders of preferred stocks. Holders of common stocks of the type held in
the Portfolio have a right to receive dividends only when, as and if, and
in the amounts,
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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. Holders of preferred stocks 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
ordinarily 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 such
cumulative preferred stock. Preferred stocks are also entitled to rights
on liquidation which are senior to those of common stocks. For these
reasons, preferred stocks entail less risk than common stocks. However,
neither preferred nor common stocks represent an obligation or liability of
the issuer and therefore do not offer any assurance of income or provide
the degree of protection of capital of debt securities. The issuance of
debt securities (as compared with both preferred and common stock) and
preferred stock (as compared with common stock) will create prior claims
for payment of principal and interest (in the case of debt securities) and
dividends (in the case of preferred stock) which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
preferred and/or common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. Further,
unlike debt securities which typically have a stated principal amount
payable at maturity (which value will be subject to market fluctuations
prior thereto), preferred stocks typically have only a liquidation
preference which may have stated optional or mandatory redemption
provisions while common stocks have neither a fixed principal amount nor a
maturity date and have values which are subject to market fluctuations for
as long as the common stocks remain outstanding. Additionally, market
timing and volume trading will also affect the underlying value of
Securities, including the Sponsor's buying of additional Securities and the
Trust's selling of Securities during the Liquidation Period. The value of
the Securities in the Portfolio thus may be expected to fluctuate over the
entire life of the Trust to values higher or lower than those prevailing on
the Date of Deposit. The Sponsor may direct the Trustee to dispose of
Securities under certain specified circumstances (see: "Administration of
the Trust -- Portfolio Supervision"). However, Securities will not be
disposed of solely as a result of normal fluctuations in market value.
The Portfolio of the Trust is composed of securities issued by
U.S. banks and bank holding companies. There are certain risks involved in
investing in the Trust due to its concentration in stocks of one industry.
The Trust's concentration in securities of a single industry sector means
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that the Trust's performance is closely related to the specific industry
conditions as well as general market conditions experienced in all sectors
of the economy as a whole. As a result, changes in the economic conditions
affecting the selected sector will tend to have a greater impact on the
value of Units of this Trust than on units of trusts which invest in a
broader based portfolio of stocks. These factors may tend to make the
value of Trust Units more volatile than other investments.
Certain Risks Affecting Securities of Banking Issuers. The Trust's
assets will be concentrated in Securities of issuers in the banking
industry and, as a result, the value of the Units of the Trust will be
susceptible to factors affecting such industry. While the factors
affecting the U.S. banks and bank holding companies and the market values
of the Securities in the Portfolio are varied and complex, the risks of
investment in such Securities outlined below should be noted.
The activities of U.S. banks and bank holding companies are
subject to comprehensive federal and state regulation which regulation is
expected to continue to change over the life of the Trust. The enactment
of any new legislation or regulations, or any change in interpretation or
enforcement of existing laws of regulations, may affect the profitability
of participants in the banking industry. Congress is currently considering
removing restrictions to interstate banking. No assurance can be given as
to what form such legislation, or any other legislation or regulation,
would take, if enacted, or what effects any new legislation or regulation
would have on the banking industry.
The banking industry is particularly susceptible to downturns
in economic, and volatility in political conditions as well as fiscal or
monetary policies of governmental units. Banks may be at particular risk
in a protracted recession, given that the levels of corporate debt,
corporate defaults on debts, the number of bank failures and problem banks
are substantially higher than is typical during a non-recessionary period.
Certain banks whose securities are included in the Portfolio may have loan
portfolios concentrated in highly leveraged transactions, real estate loans
or loans to less developed countries, which transactions and loans bank
regulators classify as risky. The operations of banks are highly interest
rate sensitive. An inflationary economy or tight credit policies imposed
by the Federal Reserve could adversely affect the banking industry.
Investors should note that monetary policies of the Federal Reserve are
subject to significant fluctuations. A deflationary economy, when asset
values decline, poses risks to banks by reducing the value of direct
investments held for the banks' own portfolios and contributing to loan
defaults if the value of secured property
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or other collateral for loans declines. Banks are particularly susceptible
to the real estate markets since a significant amount of their loans are
secured by real estate, the value of which is subject to significant
fluctuations.
Federal regulations require banks and thrifts to maintain
minimum capital requirements. To the extent additional equity is issued to
meet the requirements, outstanding equity holdings will be diluted. The
capital standards are expected to continue to lead to a major consolidation
of the bank and thrift systems. Certain Money Center Banks have
experienced problems in obtaining access to equity and debt markets. No
assurance can be given that any bank will maintain access to the public
credit markets on affordable terms to meet their capital or short term cash
needs. The Sponsor is unable to predict the impact or the likelihood of
any consolidation resulting from the capital standards or any change in the
interstate banking laws and regulations, with respect to the particular
Securities in the Portfolio.
Banks are subject to substantial competition from other banking
and thrift institutions and from other financial service institutions for
deposits, as well as corporate and retail customers. These competitors,
which are subject to less government regulation than banks provide a broad
range of financial products, and include foreign banks, insurance
companies, brokerage and securities firms, mutual funds, investment banks
and diversified financial service companies. As a result of such
competition worldwide, depository flows have become highly liquid, and
subject to dramatic shifts among different forms of financial instruments.
To the extent banks are unable to pass deposit insurance
premiums on to customers because of competitive pressures (e.g., from money
market mutual funds), such premiums must be absorbed. Any premium increase
may lead to insolvency by some problem banks. No assurance can be given
that statutory provisions for insuring all deposits up to $100,000 (which
currently applies to multiple accounts held by the same depositor and to
pass-through accounts, such as for pension plans) will not be restricted.
Such restrictions could adversely affect large investor confidence, which
could lead to deposit runs. In addition, no assurance can be given that
foreign branch deposits of domestic banks will remain exempt from
assessments for deposit insurance premiums or retain their de facto
insurance coverage. Either policy change could have a substantial adverse
impact on affected banks, particularly Money Center Banks. Investors
should note that deposit insurance does not cover equity issued by banks
and therefore is no guarantee of the market value of the Securities in the
Portfolio.
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To the extent a bank's portfolio is concentrated in assets
related to a particular industry or geographic region, the bank's operating
results will be subject to additional risks associated with such industry
or region. A significant downgrading of a credit rating could jeopardize
the affected bank's access to public credit markets. Deposits from foreign
corporations, individuals and governments constitute a substantial share
(frequently a majority) of total deposits of Money Center Banks, including
their foreign branches. The level of such deposits is generally subject to
the risks of foreign currency exchange rates (a falling U.S. dollar
reducing the value of their investments), comparative interest rate changes
and capital flight restrictions.
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 may be 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.
Objective and Securities Selection
The objectives of the Trust are to provide capital appreciation
potential and current income during the five years after the initial Date
of Deposit through an investment in a fixed diversified portfolio of
Securities chosen in the manner described in the "Summary of Essential
Information", herein. There is, of course, no guarantee that the Trust's
objectives will be achieved.
The Trust consists of such of the Securities listed under
"Schedule of Portfolio Securities" as may continue to be held from time to
time in the Trust and any additional and substitute Securities acquired and
held by the Trust pursuant to the provisions of the Indenture and Agreement
together with undistributed income therefrom and undistributed and
uninvested cash realized from the disposition of Securities (see:
"Administration of the Trust"). Neither the Sponsor nor the Trustee shall
be liable in any way for any default, failure or defect in any of the
Securities. However, should any contract deposited hereunder fail and no
substitute Security be acquired pursuant to the provisions of the Indenture
and Agreement, the Sponsor shall cause to be refunded the sales charge
relating to such Security, plus the pro rata portion of the cost to the
Sponsor of the failed contract listed under "Schedule of Portfolio
Securities". (See: "Administration of the Trust -- Portfolio
Supervision".)
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Because certain Securities from time to time may be sold or
their percentage reduced under certain circumstances described herein, and
because additional Securities may be deposited into the Trust from time to
time, no assurance can be given that the Trust will retain for any length
of time its present size and composition (see: "Administration of the
Trust -- Portfolio Supervision", herein).
The Trust is organized as a unit investment trust and not as a
management investment company. Therefore, neither the Trustee nor the
Sponsor has the authority to manage the Trust's assets fully in an attempt
to take advantage of various market conditions to improve the Trust's net
asset value and, further, the Trust's Securities may be disposed of only
under limited circumstances. (See: "Administration of the Trust --
Portfolio Supervision".)
There is no assurance that any dividends will be declared or
paid in the future on the Securities initially deposited or to be deposited
subsequently in the Trust.
Distributions
Record Dates and the Distribution Dates are set forth under
"Summary of Essential Information". The distributions will be an amount
equal to such Unit Holder's pro rata portion of the amount of dividend
income received by the Trust and proceeds of the sale of Securities,
including capital gains, not used for the redemption of Units (less the
Trustee's fees, Sponsor's portfolio supervision fees and expenses).
Distributions for the account of beneficial owners of Units registered in
"Street name" and held by the Sponsor will be made to the investment
account of such beneficial owners maintained with the Sponsor. Under
certain circumstances, the Trustee may make additional distributions in any
calendar year in order to avoid the imposition of Federal or state excise
taxes or to continue or otherwise maintain the Trust's qualification as a
regulated investment company under subchapter M of the Internal Revenue
Code of 1986, as amended (see: "Tax Status of the Trust").
TAX STATUS OF THE TRUST
The following discussion offers only a brief outline of the
federal income tax consequences of investing in the Trust. Investors
should consult their own tax advisors for more detailed information and for
information regarding the impact of state, local or foreign taxes upon such
an investment.
The Trust intends to qualify as and elect to be a regulated
investment company under Subchapter M of the Internal
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Revenue Code of 1986, as amended (the "Code"). Generally, to qualify as a
regulated investment company for a taxable year the Trust must derive at
least 90% of its income from certain specified sources, including interest,
dividends, gains from the disposition of securities, and other income
derived with respect to its business of investing in securities. In
addition, the Trust must derive less than 30% of its gross income from the
disposition of securities held for less than three months, must meet
certain diversification criteria regarding Trust investment, and must
distribute annually at least 90% of its investment company taxable income.
For any year in which the Trust qualifies for taxation as a regulated
investment company, (a) the Trust is not taxed on income distributed to its
shareholders in the form of dividends or capital gains distributions and
(b) if the Trust is the record holder of stock on the record date for a
dividend payable with respect to that stock, the dividend must be included
in the gross income of the Trust as determined for federal income tax
purposes on the later of (1) the date the stock became ex-dividend with
respect to such dividend or (2) the date the Trust acquired the stock. If,
in any taxable year, the Trust were to fail to qualify as a regulated
investment company under the Code, the Trust would be taxed for that year
in the same manner as an ordinary corporation and distributions to its
shareholders would not be deductible by the Trust in computing its taxable
income. In addition, in the event of a failure to qualify as a regulated
investment company for a taxable year, that year's Trust distributions, to
the extent derived from current or accumulated earnings and profits, would
be taxable to the recipient shareholders as ordinary income dividends, even
if those distributions might otherwise have been considered distributions
of capital gains.
If the Trust fails to distribute in each calendar year, at
least (i) 98% of its ordinary income for such calendar year and (ii) 98% of
its capital gain net income (both long-term and short-term) for the 12
months ended October 31 of such calendar year (or December 31, if the Trust
qualifies to so elect and does so), the Trust will be subject to a 4%
excise tax on the undistributed income if income tax is not imposed on such
income in the hands of the Trust. In addition, the Trust will be subject
to such excise tax on any portion (not taxed to the Trust) of the
respective 2% balances which are not distributed during the succeeding
calendar year.
If the Trust fails to qualify as a regulated investment company
for any year, it must pay out its earnings and profits accumulated in that
year (less the interest charge mentioned below, if applicable) and may be
required to pay an interest charge to the Treasury on 50% of such earnings
and profits before it can again qualify as a regulated investment company.
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Generally, distributions paid by the Trust, whether or not
reinvested, are treated as received in the taxable year of the
distribution; however, any amounts designated for distribution by the Trust
with respect to October, November or December of any calendar year as
payable to Unit Holders of record on a specified date in such a month and
which are actually paid during January of the following year, will be
treated as received on December 31 of the preceding year. The Indenture
and Agreement require current distribution to Unit Holders of the entire
net income and net capital gain, if any, of the Trust and cash proceeds of
redemptions, mergers, liquidations of issuers or sales representing
recovery of cost (to the extent that the proceeds of sales or other
dispositions are not reinvested or used to redeem Units) of underlying
Securities in the Trust. In kind receipts of the Trust in mergers and
liquidations may be either retained or sold and the proceeds, if sold, will
be either (i) distributed to Unit Holders or (ii) retained by the Trustee
with the proceeds of such sale credited to the Income and/or Principal
Accounts and (unless applied for the purchase of securities pursuant to the
Indenture and Agreement) distributed to Unit Holders in the manner provided
in the Indenture and Agreement. Securities received in a liquidation or
merger will not be retained if such retention would jeopardize the
characterization of the Trust as a regulated investment company for federal
income tax purposes.
Distributions to Unit Holders (other than capital gains
distributions) will be taxable as ordinary income to such Unit Holders to
the extent paid from interest, dividends and net short-term capital gain
includible in the Trust's gross income for the taxable year with respect to
which the distribution is made less the sum of the Trust's allocable
deductible expenses. To the extent that distributions to a Unit Holder
with respect to any year are not taxable as ordinary income or as capital
gain distributions, the amount of such distributions will be treated as a
return of capital and will reduce the Unit Holder's basis in its Units and,
to the extent that they exceed its basis, will generally be taxed as a
capital gain.
It is anticipated that part of the distributions of the Trust
will be taxable as ordinary income to Unit Holders and that, under present
law, distributions attributable to dividends from domestic corporations
constitute dividends for purposes of the 70% deduction allowed to certain
corporations with respect to dividends received, as discussed below. This
deduction is allowed to corporations other than corporations, such as "S"
corporations, which are not eligible for such deduction because of their
special characteristics. Dividends received by corporations are not
deductible for purposes of
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special taxes such as the accumulated earnings tax and the personal holding
company tax.
Under existing law, only that amount of the Trust's dividend
distributions (exclusive of capital gain dividends) that are designated as
dividends by the Trust and which do not exceed the aggregate amount of
dividends received by the Trust will qualify for the 70% dividends-received
deduction for corporations. Dividends received by the Trust will be
considered dividends for this purpose only if such dividends are received
from domestic corporations and would qualify for the 70% dividends-received
deduction if such deduction were available to regulated investment
companies.
Individual investors should note that the Code places a floor
of 2% of adjusted gross income on miscellaneous itemized deductions,
including investment expenses. The Code directs the Secretary of the
Treasury to prescribe regulations prohibiting indirect deduction through a
pass-through entity (such as the Trust) of amounts not allowable as a
deduction under this rule if paid or incurred directly by an individual.
Temporary Regulations applicable to "nonpublicly offered
regulated investment companies" have been issued. Under these temporary
regulations, in general, (i) specified expenses of the regulated investment
company or, at the election of the regulated investment company, 40% of its
expenses, exclusive of expenses which are specifically excluded from
miscellaneous itemized deductions if incurred by an individual, are
allocated among those of its shareholders who are "affected investors"
(i.e., individuals, estates, trusts and pass-through entities having such
shareholders) and (ii) such investors are treated as having received or
accrued dividends in an aggregate amount equal to the investor's share of
such expenses and to have incurred investment expenses in the same
aggregate amount. These computations are made on a calendar year basis and
the allocation of such expenses among affected investors may be done by the
regulated investment company on any reasonable basis (which basis, if
utilizing distributions to affected investors, may exclude some of such
distributions).
The Code provides, however, that the 2% floor rule will not
apply to indirect deductions through a publicly offered regulated
investment company. The term "publicly offered regulated investment
company" is defined as meaning a regulated investment company the shares of
which are "continuously offered" or regularly traded on an established
securities market or "held by or for no fewer than 500 persons at all times
during the taxable year." The Sponsor is unable to state whether or not
the Trust will qualify in the future
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for treatment as a "publicly offered regulated investment company."
Gain or loss will be realized by each Unit Holder to the extent
that the proceeds of redemption (or distributions received upon liquidation
of its Units) exceed or are less than the Unit Holder's tax cost basis of
its Units which are redeemed (or in respect of which the liquidating
distributions are made). Distributions in kind are taken into account for
this purpose at their fair market value when distributed.
Distributions of net capital gain (designated as such by the
Trust) will be taxable to Unit Holders as long-term capital gains
regardless of the length of time the Units have been held by a Unit Holder.
A redemption of Units will be a taxable event for a Unit Holder and,
depending on the circumstances, may give rise to gain or loss. Under the
Code, net capital gain (i.e., the excess of net long-term capital gain over
net short-term capital loss) of individuals, estates and trusts is subject
to a maximum nominal tax rate of 28%. Such net capital gain may, however,
result in a disallowance of itemized deductions and/or affect a personal
exemption phase-out.
The Code disallows the dividends-received deduction in full for
corporations with respect to stock, including Trust Units (which are
considered as stock for this purpose) held for 45 days or less (90 days or
less in the case of certain preference stock) exclusive of days on which
the holder's risk of loss is diminished. Sections 246 and 246A of the Code
also contain limitations on the eligibility of dividends for the 70%
dividends-received deduction (in addition to the limitation discussed
above). These limitations may be applicable to dividends received by a
Unit Holder depending on the Unit Holder's individual circumstances.
Accordingly, Unit Holders which are corporations should consult their own
tax advisors in this regard.
Information with respect to the Federal income tax status of
each year's distributions will be supplied to Unit Holders.
The Trust is required to withhold U.S. federal income tax at
the rate of 31% of all taxable distributions payable to holders of Trust
Units who fail to provide the Trust with their correct taxpayer
identification numbers or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to backup
withholding. Backup withholding is not an additional tax. Any amounts
withheld may be credited against U.S. federal income tax liability of a
holder of a Trust Unit.
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Federal withholding taxes at a 30% rate or a lesser rate
established by treaty will generally apply to distributions (other than
distributions designated by the Trust as capital gain dividends) made to
Unit Holders that are nonresident aliens or foreign partnerships, trusts or
corporations unless the distributions constitute income effectively
connected with the conduct of a trade or business within the United States
by the distributee.
The value of Units held by an individual non-resident alien,
even though he is a non-resident at his death, will be includible in his
gross estate for U.S. federal estate tax purposes.
Investors are advised to consult their own tax advisers with
respect to the application to their own circumstances of the
above-described general taxation rules and with respect to the state, local
or foreign tax consequences to them of an investment in Trust Units.
Units of the Trust may be suited for purchase by Individual
Retirement Accounts and pension plans, profit sharing and other qualified
retirement plans. Investors considering participation in any such plan
should consult their attorneys or other tax advisors with respect to the
establishment and maintenance of any such plan.
PUBLIC OFFERING OF UNITS
Public Offering Price
The Public Offering Price of the Units is calculated daily, and
is computed by adding to the aggregate market value of the Portfolio
Securities (as determined by the Trustee) next computed after receipt of a
purchase order, divided by the number of Units outstanding, the sales
charge shown in "Summary of Essential Information". After the initial Date
of Deposit, a proportionate share of amounts in the Income and Principal
Accounts and amounts receivable in respect of stocks trading ex-dividend
(other than money required to be distributed to Unit Holders on a
Distribution Date and money required to redeem tendered Units) on the date
of purchase of Units is added to the Public Offering Price. In the event a
stock is trading ex-dividend at the time of deposit of additional
Securities, an amount not to exceed the dividend that would be received if
such stock were to receive a dividend will be added to the Public Offering
Price. The sales charge will decline over the life of the Trust in the
manner described in "Summary of Essential Information -- Public Offering
Price". The Public Offering Price per Unit is calculated to five decimal
places and rounded up or down to four decimal places. The Public Offering
Price on any particular date will vary from the Public
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Offering Price on August 31, 1996 (set forth in the "Summary of Essential
Information", herein) in accordance with fluctuations in the aggregate
market value of the Securities, the amount of available cash on hand in the
Trust and the amount of certain accrued fees and expenses.
As more fully described in the Indenture and Agreement, the
aggregate market value of the Securities is determined on each business day
by the Trustee based on closing prices on the day the valuation is made or,
if there are no such reported prices, by taking into account the same
factors referred to under "Redemption -- Computation of Redemption Price".
Determinations are effective for transactions effected subsequent to the
last preceding determination.
Public Distribution
Units issued on the Date of Deposit and Additional Units issued
in respect of additional deposits of Securities will be distributed to the
public by the Sponsor and through dealers at the Public Offering Price
determined as provided above. Unsold Units or Units acquired by the
Sponsor in the secondary market referred to below may be offered to the
public by this Prospectus at the then current Public Offering Price
determined as provided above.
The Sponsor intends to qualify Units in states selected by the
Sponsor for sale by the Sponsor and through dealers who are members of the
National Association of Securities Dealers, Inc. In addition, sales of
Units may be made pursuant to distribution arrangements with certain banks
and/or other entities subject to regulation by the Office of the
Comptroller of the Currency which are acting as agents for their customers.
These banks and/or entities are making Units of the Trust available to
their customers on an agency basis. A portion of the sales charge paid by
these customers is retained by or remitted to such banks or entities in an
amount equal to the fee customarily received by an agent for acting in such
capacity in connection with the purchase of Units. The Glass-Steagall Act
prohibits banks from underwriting certain securities, including Units of
the Trust; however, this Act does permit certain agency transactions, and
banking regulators have not indicated that these particular agency
transactions are impermissible under this Act. In Texas, as well as
certain other states, any bank making Units available must be registered as
a broker-dealer in that State. The Sponsor reserves the right to reject,
in whole or in part, any order for the purchase of Units.
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Secondary Market
While not obligated to do so, it is the Sponsor's present
intention to maintain, at its expense, a secondary market for Units of this
series of the Dean Witter Select Equity Trust and to continuously offer to
repurchase Units from Unit Holders at the Sponsor's Repurchase Price. The
Sponsor's Repurchase Price is computed by adding to the aggregate value of
the Securities in the Trust, any cash on hand in the Trust including
dividends receivable on stocks trading ex-dividend (other than money
required to redeem tendered Units and cash deposited by the Sponsor to
purchase Securities or cash held in the Reserve Account) and deducting
therefrom expenses of the Trustee, Sponsor, counsel and taxes, if any, and
cash held for distribution to Unit Holders of record as of a date on or
prior to the evaluation; and then dividing the resulting sum by the number
of Units outstanding, as of the date of such computation. There is no
sales charge incurred when a Unit Holder sells Units back to the Sponsor.
Any Units repurchased by the Sponsor at the Sponsor's Repurchase Price may
be reoffered to the public by the Sponsor at the then current Public
Offering Price. Any profit or loss resulting from the resale of such Units
will belong to the Sponsor.
If the supply of Units exceeds demand (or for any other
business reason), the Sponsor may, at any time, occasionally, from time to
time, or permanently, discontinue the repurchase of Units of this series at
the Sponsor's Repurchase Price. In such event, although under no
obligation to do so, the Sponsor may, as a service to Unit Holders, offer
to repurchase Units at the "Redemption Price". Alternatively, Unit Holders
may redeem their Units through the Trustee.
Profit of Sponsor
The Sponsor receives a sales charge on Units sold to the public
and to dealers. The Sponsor may have also realized a profit (or sustained
a loss) on the deposit of the Securities in the Trust representing the
difference between the cost of the Securities to the Sponsor and the cost
of the Securities to the Trust. The Sponsor may realize a similar profit
(or loss) in connection with each additional deposit of Securities. In
addition, the Sponsor may have acted as broker in transactions relating to
the purchase of Securities for deposit in the Trust. During the initial
public offering period the Sponsor may realize additional profit (or
sustain a loss) due to daily fluctuations in the prices of the Securities
in the Trust and thus in the Public Offering Price of Units received by the
Sponsor. Cash, if any, received by the Sponsor from the Unit Holders prior
to the settlement date
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for purchase of Units or prior to the payment for Securities upon their
delivery may be used in the Sponsor's business and may be of benefit to the
Sponsor.
The Sponsor may also realize profits (or sustain losses) while
maintaining a secondary market in the Units, in the amount of any
difference between the prices at which the Sponsor buys Units and the
prices at which the Sponsor resells such Units (such prices include a sales
charge) or the prices at which the Sponsor redeems such Units, as the case
may be.
Volume Discount
Although under no obligation to do so, the Sponsor intends to
permit volume purchasers of Units to purchase Units at a reduced sales
charge. The Sponsor may at any time change the amount by which the sales
charge is reduced, or may discontinue the discount altogether.
The sales charge of 4.25% of the Public Offering Price will be
reduced pursuant to the following graduated scale for sales to any person
of at least $25,000.
Percent of Percent of
Public Offering Net Amount Dealer
Aggregate Value of Units Price Invested Concession
Less than $25,000............... 4.25% 4.439% 2.76%
$25,000 to $49,999.............. 4.00% 4.167% 2.60%
$50,000 to $99,999.............. 3.75% 3.896% 2.44%
$100,000 to $249,999............ 3.25% 3.359% 2.11%
$250,000 to $499,999............ 2.75% 2.828% 1.79%
$500,000 to $749,999............ 2.50% 2.564% 1.63%
$750,000 to $999,999............ 2.25% 2.302% 1.46%
$1,000,000 to $2,499,999........ 1.75% 1.781% 1.14%
$2,500,000 to $4,999,999........ 1.25% 1.266% 0.81%
$5,000,000 or more.............. 0.75% 0.756% 0.49%
The reduced sales charges as shown on the chart above will
apply to all purchases of Units of this Trust only on any one day by the
same person, partnership or corporation (other than a dealer), in the
amounts stated herein.
Units held in the name of the purchaser's spouse or in the name
of a purchaser's child under the age of 21 years are deemed for the
purposes hereof to be registered in the name of the purchaser. The reduced
sales charges are also applicable to a trustee or other fiduciary,
including a partnership or corporation, purchasing Units for a single trust
estate or single fiduciary account.
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Sales to Dealers will be made at prices which include a
concession as shown on the chart above. Dealers purchasing certain dollar
amounts of Units during the life of the Trust will be entitled to
additional concession benefits. The dealer concession for secondary market
sales may differ from the concessions set forth in the above schedule. The
Sponsor reserves the right, at any time, to change the level of dealer
concessions.
EXCHANGE OPTION
Unit Holders of any Dean Witter sponsored unit investment trust
or any holders of Units of any other unit investment trust (collectively,
"Holders") may elect to exchange any or all of their units of each series
of the Dean Witter Select Equity Trust for units of one or more of any
series of the Dean Witter Select Equity Trust or for units of any
additional Dean Witter Select Trusts, that may from time to time be made
available for such exchange by the Sponsor (the "Exchange Trusts"). Such
Units may be acquired at prices based on reduced sales charges per Unit.
The purpose of such reduced sales charges is to permit the Sponsor to pass
on to the Holder who wishes to exchange Units the cost savings resulting
from such exchange of Units. The cost savings result from reductions in
time and expense related to advice, financial planning and operational
expense required for the Exchange Option. The following Exchange Trusts
are currently available: series of the Dean Witter Select Municipal Trust,
the Dean Witter Select Government Trust, the Dean Witter Select Equity
Trust, the Dean Witter Select Corporate Trust and the Dean Witter Select
Investment Trust.
Each Exchange Trust has a different investment objective; a
Holder should read the prospectus for the applicable Exchange Trust
carefully to determine the investment objective prior to exercise of this
option.
This option will be available provided the Sponsor maintains a
secondary market in units of the applicable Exchange Trust and provided
that units of the applicable Exchange Trust are available for sale and are
lawfully qualified for sale in the state in which the Holder is a resident.
While it is the Sponsor's present intention to maintain a secondary market
for the units of all such trusts, there is no obligation on its part to do
so. Therefore, there is no assurance that a market for units will in fact
exist on any given date on which a Holder wishes to sell or exchange its
Units; thus, there is no assurance that the Exchange Option will be
available to any Unit Holder. The Sponsor reserves the right to modify,
suspend or terminate this option at any time without further notice to Unit
Holders. In the event the Exchange Option is not available to a Unit
Holder at the time
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such Unit Holder wishes to exercise it, the Unit Holder will be immediately
notified and no action will be taken with respect to its Units without
further instruction from the Unit Holder.
Exchanges will be effected in whole units only. Any excess
proceeds from the surrender of a Unit Holder's Units will be returned.
Alternatively, Unit Holders will be permitted to make up any difference
between the amount representing the Units being submitted for exchange and
the amount representing the Units being acquired up to the next highest
number of whole Units.
An exchange of Units pursuant to the Exchange Option will
constitute a "taxable event" under the Code, i.e., a Holder will recognize
gain or loss at the time of exchange. A Unit Holder who exchanges Units of
one Trust for units of another Trust should consult his or her tax advisor
regarding the extent to which such exchange results in the recognition of a
loss for Federal and/or state or local income tax purposes.
If a Unit Holder utilizes the Exchange Option with respect to
an Exchange Trust which is a regulated investment company for U.S. federal
income tax purposes before the 91st day after the exchanged Units were
acquired, the sales charge incurred in acquiring the Units transferred in
the exchange (up to the amount of the reduction in the sales charge with
respect to the securities received in the exchange) is not taken into
account in determining the amount of gain or loss on the exchange but any
sales charge disallowed is added to the basis of the Units acquired.
To exercise the Exchange Option, a Unit Holder should notify
the Sponsor of its desire to use the proceeds from the sale of its Units to
purchase units of one or more of the Exchange Trusts. If units of the
applicable outstanding series of the Exchange Trust are at that time
available for sale, the Holder may select the series or group of series for
which such Units are to be exchanged. The Holder will be provided with a
current prospectus or prospectuses relating to each series in which
interest is indicated.
The exchange transaction will operate in a manner essentially
identical to any secondary market transaction, i.e., Units will be
repurchased at a price equal to the aggregate bid side evaluation per Unit
of the Securities in the Portfolio, plus accrued interest. Units of the
Exchange Trust will be sold to the Unit Holder at a price equal to the
evaluation per unit of the securities in that Portfolio, plus accrued
interest and the applicable sales charge of $25 per Unit (or per 100 Units
in the case of a unit priced at about $10.00 or per 1,000 Units in the case
of a unit priced at about $1.00) or 2.5% of the Public Offering Price where
the cost per
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Unit is significantly less than $1.00. If a Unit Holder has held its Units
for less than a five-month period, the sales charge shall be the greater of
(i) $25 or (ii) the difference between the original sales charge on the
Units owned and the sales charge on the Exchange Trust.
REINVESTMENT PROGRAM
Distributions, if any, are made to Unit Holders quarterly. The
Unit Holder has the option, however, of either receiving his quarterly
check from the Trustee or participating in the reinvestment program offered
by the Sponsor under which the distributions are automatically reinvested
in Additional Units of the Trust without a sales charge. Participation in
the reinvestment program is conditioned on such program's lawful
qualification for sale in the state in which the Unit Holder is a resident.
A Unit Holder's election to participate in the reinvestment program will
apply to all Units of this series of the Trust owned by such Unit Holder.
Once the reinvestment election has been chosen by the Unit Holder, such
election will remain in effect until changed by the Unit Holder. The
Sponsor may suspend or terminate the reinvestment program at its
discretion. Thereafter, distributions received by the Trust would be
distributed quarterly to all Unit Holders.
Such distributions, to the extent reinvested in Units of the
Trust, will be used by the Trustee at the direction of the Sponsor in one
or both of the following manners. (i) The distributions may be used by the
Trustee to purchase Units of this Series of the Trust held in the Sponsor's
inventory. The purchase price payable by the Trustee for each of such
Units will be equal to the applicable Trust evaluation per Unit on (or as
soon as possible after) the close of business on the Distribution Date.
The Units so purchased by the Trustee will be issued or credited to the
accounts of Unit Holders participating in the Program. (ii) If there are
no Units in the Sponsor's inventory, the Sponsor may purchase additional
Securities in order to maintain, as closely as practical, the proportionate
relationship between the Securities in the Trust at the time of creation of
the additional Units. The additional securities will be deposited by the
Sponsor with the Trustee in exchange for new Units. The distributions may
then be used by the Trustee to purchase the new Units from the Sponsor.
The price for such new Units will be the applicable Trust evaluation per
Unit on (or as soon as possible after) the close of business on the
Distribution Date. (See: "Public Offering -- Public Offering Price".)
The Units so purchased by the Trustee will be issued or credited to the
accounts of Unit Holders participating in the Program.
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No fractional Units will be issued under any circumstances.
If, after the maximum number of full Units have been issued or credited at
the applicable price, there remains a portion of the distribution which is
not sufficient to purchase a full Unit as such price, the Trustee shall
hold such cash for the benefit of such Unit Holder and shall apply such
cash on the next Distribution Date, along with any distributions then made,
toward the purchase of additional full Units in accordance with the
Program. The cost of administering the program will be borne by the Trust
and thus will be borne indirectly by all Unit Holders.
A Unit Holder may, by contacting such Unit Holder's broker or
filing with the Trustee a written notice of election at least ten days
before the Record Date for the first distribution to which it is to apply,
elect to have distributions, if any, reinvested in Additional Units of the
Trust. An election may be revoked upon similar notice.
REDEMPTION
Right of Redemption
One or more Units represented by a Certificate may be redeemed
at the Redemption Price upon tender of such Certificate to the Trustee at
its unit investment trust office in the City of New York, properly endorsed
or accompanied by a written instrument of transfer in form satisfactory to
the Trustee (as set forth in the Certificate), and executed by the Unit
Holder or its authorized attorney. A Unit Holder may tender its Units for
redemption at any time after the settlement date for purchase, whether or
not it has received a definitive Certificate. The Redemption Price per
Unit is calculated as set forth under "Computation of Redemption Price",
herein. There is no sales charge incurred when a Unit Holder tenders its
Units to the Trustee for redemption.
On the seventh calendar day following the tender to the Trustee
of Certificates representing Units to be redeemed (or if the seventh
calendar day is not a business day, on the first business day prior
thereto) the Unit Holder will be entitled to receive monies per Unit equal
to the Redemption Price per Unit as determined by the Trustee as of the
Evaluation Time on the date of tender. The date of tender is deemed to be
the date on which Units are received by the Trustee, except that as regards
Units received after the Evaluation Time, the date of tender is the first
day after such date on which the New York Stock Exchange is open for
trading, and such Units will be deemed to have been tendered to the
Trustee on such day for redemption at the Redemption Price computed on that
day.
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During the period in which the Sponsor maintains a secondary
market for Units, the Sponsor may repurchase any Unit presented for tender
to the Trustee for redemption no later than the close of business on the
next business day following such presentation.
Units will be redeemed by the Trustee in cash or in kind for
any one Unit Holder tendering less than 25,000 Units, the Sponsor may
determine, in its discretion, to direct the Trustee to redeem Units "in
kind" by distributing Portfolio Securities to the redeeming Unit Holder.
The Sponsor may direct the Trustee to redeem Units "in kind" even if it is
then maintaining a secondary market in Units of the Trust. Unit Holders
redeeming "in kind" will receive an amount and value of Trust Securities
per Unit equal to the Redemption Price Per Unit as determined as of the
Evaluation Time next following the tender as set forth herein under
"Computation of Redemption Price" below. The distribution "in kind" for
redemption of Units will be held by the Trustee for the account of, and for
disposition in accordance with the instructions of, the tendering Unit
Holder. The tendering Unit Holder will be entitled to receive whole shares
of each of the underlying Portfolio Securities, plus cash equal to the Unit
Holder's pro rata share of the cash balance of the Income and Principal
Accounts and cash from the Principal Account equal to the fractional shares
to which such tendering Unit Holder is entitled. The Trustee, in
connection with implementing the redemption "in kind" procedures outlined
above, may make any adjustments necessary to reflect differences between
the Redemption Price of Units and the value of the Securities distributed
"in kind" as of the date of tender. If the Principal Account does not
contain amounts sufficient to cover the required cash distribution to the
tendering Unit Holder, the Trustee is empowered to sell Securities in the
Trust Portfolio in the manner discussed below. A Unit Holder receiving
redemption distributions of Securities "in kind" may incur brokerage costs
in converting Securities so received into cash.
The portion of the Redemption Price which represents the Unit
Holder's interest in the Income Account shall be withdrawn from the Income
Account to the extent available. The balance paid on any redemption,
including dividends receivable on stocks trading ex-dividend, if any, shall
be drawn from the Principal Account to the extent that funds are available
for such purpose. The Trustee is authorized by the Indenture and Agreement
to sell Securities in order to provide funds for redemption. To the extent
Securities are sold, the size and diversity of the Trust will be reduced.
Such sales may be required at the time when Securities would not otherwise
be sold and might result in lower prices than might otherwise be realized.
The Redemption Price received by a tendering Unit
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Holder may be more or less than the purchase price originally paid by such
Unit Holder, depending on the value of the Securities in the Portfolio at
the time of redemption. Moreover, due to the minimum lot size in which
Securities may be required to be sold, the proceeds of such sales may
exceed the amount necessary for payment of Units redeemed. Such excess
proceeds will be distributed pro rata to all remaining Unit Holders of
record on the next Distribution Date.
Securities to be sold for purposes of redeeming Units will be
selected from a list supplied by the Sponsor. If not so instructed by the
Sponsor, the Trustee will select the Securities to be sold so as to
maintain, as closely as practicable, the proportionate relationship between
the number of shares of each Security in the Trust.
Computation of Redemption Price
The Trust Evaluation per Unit is determined as of the
Evaluation Time stated under "Summary of Essential Information", above, and
(a) semiannually, on the last business day of each of the months of June
and December, (b) on the day on which any Unit of the Trust is tendered for
redemption (unless tender is made after the Evaluation Time on such day, in
which case Tender shall be deemed to have been made on the next day
subsequent thereto on which the New York Stock Exchange is open for
trading) and (c) on any other business day desired by the Sponsor or the
Trustee, (1) by adding:
a. The aggregate value of Securities in the Trust, as
determined by the Trustee;
b. Cash on hand in the Trust, including dividends receivable
on stocks trading ex-dividend, other than money deposited
to purchase Securities or money credited to the Reserve
Account;
c. All other assets of the Trust;
(2) and then, by deducting from the resulting figure; amounts
representing any applicable taxes or governmental charges payable by the
Trust for the purpose of making an addition to the reserve account (as
defined in the Indenture and Agreement, the "Reserve Account"), amounts
representing estimated accrued fees and expenses of the Trust (including
legal and auditing expenses), amounts representing unpaid fees of the
Trustee, the Sponsor and counsel and monies held to redeem tendered Units
and for distribution to Unit Holders of record as of a date prior to the
determination and then;
(3) by dividing the result of the above computation by the
total number of Units outstanding on the date of such
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Evaluation. The resulting figure equals the Redemption Price for each
Unit.
The aggregate value of the Securities shall be determined by
the Trustee in good faith in the following manner: If the Securities are
listed on one or more national securities exchanges, such valuation shall
be based on the closing price on such Exchange which is the principal
market thereof deemed to be the New York Stock Exchange if the Securities
are listed thereon (unless the Trustee deems such price inappropriate as a
basis for valuation). If the Securities are not so listed, or, if so
listed and the principal market therefor is other than such exchange or
there is no closing price on such exchange, such valuation shall be based
on the closing price in the over-the-counter market (unless the Trustee
deems such price inappropriate as a basis for valuation) or if there is no
such closing price, by any of the following methods which the Trustee deems
appropriate: (i) on the basis of current bid prices of such Securities as
obtained from investment dealers or brokers (including the Depositor) who
customarily deal in securities comparable to those held by the Trust, or
(ii) if bid prices are not available for any of such Securities, on the
basis of bid prices for comparable Securities, or (iii) by appraisal of the
value of the Securities on the bid side of the market or by such other
appraisal as is deemed appropriate, or (iv) by any combination of the
above.
Postponement of Redemption
The right of redemption may be suspended and payment of the
Redemption Price per Unit postponed for more than seven calendar days
following a tender of Units for redemption (i) for any period during which
the New York Stock Exchange, Inc. is closed, other than for customary
weekend and holiday closings, or (ii) for any period during which, as
determined by the Securities and Exchange Commission, either trading on the
New York Stock Exchange, Inc. is restricted or an emergency exists as a
result of which disposal or evaluation of the Securities is not reasonably
practicable, or (iii) for such other periods as the Securities and Exchange
Commission may by order permit. The Trustee is not liable to any person or
in any way for any loss or damage that may result from any such suspension
or postponement.
RIGHTS OF UNIT HOLDERS
Unit Holders
A Unit Holder is deemed to be a beneficiary of the Trust
created by the Indenture and Agreement and vested with all right, title and
interest in the Trust created therein. A
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Unit Holder may at any time tender its Certificate to the Trustee for
redemption.
Ownership of Units is evidenced by registered Certificates of
Beneficial Interest issued in denominations of one or more Units and
executed by the Trustee and the Sponsor. These Certificates are
transferable or interchangeable upon presentation at the unit investment
trust office of the Trustee, properly endorsed or accompanied by an
instrument of transfer satisfactory to the Trustee and executed by the Unit
Holder or its authorized attorney, together with the payment of $2.00, if
required by the Trustee, or such other amount as may be determined by the
Trustee and approved by the Sponsor, and any other tax or governmental
charge imposed upon the transfer of Certificates. The Trustee will replace
any mutilated, lost, stolen or destroyed Certificate upon proper
identification, satisfactory indemnity and payment of charges incurred.
Any mutilated Certificate must be presented to the Trustee before any
substitute Certificate will be issued.
Under the terms and conditions and at such times as are
permitted by the Trustee, Units may also be held in uncertificated form.
The rights of any holder of Units held in uncertificated form shall be the
same as those of any other Unit Holder.
Certain Limitations
The death or incapacity of any Unit Holder (or the dissolution
of the Sponsor) will not operate to terminate the Trust nor entitle the
legal representatives or heirs of such Unit Holder to claim an accounting
or to take any other action or proceeding in any court for a partition or
winding-up of the Trust.
No Unit Holder shall have the right to vote except with respect
to removal of the Trustee or amendment and termination of the Trust (see:
"Administration of the Trust -- Amendment" and "Administration of the Trust
- -- Termination", herein). Unit Holders shall have no right to control the
operation or administration of the Trust in any manner, except upon the
vote of 51% of the Unit Holders outstanding at any time for purposes of
amendment, or termination of the Trust or discharge of the Trustee, all as
provided in the Agreement; however, no Unit Holder shall ever be under any
liability to any third party for any action taken by the Trustee or
Sponsor. Unit Holders will be unable to dispose of any of the Securities
in the Portfolio, as such, and will not be able to vote the Securities.
The Trustee, as holder of the Securities, will have the right to vote all
of the voting Securities held in the Trust, and will vote such Securities
in accordance with the
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instructions of the Sponsor, if given, otherwise the Trustee shall vote as
it, in its sole discretion, shall determine.
EXPENSES AND CHARGES
Fees
The Sponsor's fee, earned for portfolio supervisory services,
is based upon the largest number of Units outstanding during the
computation period. The Sponsor's fee, as set forth under "Summary of
Essential Information", may exceed the actual costs of providing portfolio
supervisory services for this Trust, but at no time will the total amount
the Sponsor receives for portfolio supervisory services rendered to all
series of the Dean Witter Select Equity Trust in any calendar year exceed
the aggregate cost to it of supplying such services in such year.
Under the Indenture and Agreement for its services as Trustee,
the Trustee receives the fee set forth under "Summary of Essential
Information". Certain regular expenses of the Trust, including certain
mailing and printing expenses, are borne by the Trust.
The Sponsor's fee and the Trustee's fees accrue daily but are
payable only on or before each Distribution Date from the Income Account,
to the extent funds are available and thereafter from the Principal
Account. Any of such fees may be increased without approval of the Unit
Holders in proportion to increases under the classification "All Services
Less Rent" in the Consumer Price Index published by the United States
Department of Labor or, if no longer published, a similar index. The
Trustee, pursuant to normal banking procedures, also receives benefits to
the extent that it holds funds on deposit in various non-interest bearing
accounts created under the Indenture and Agreement.
Other Charges
The following additional charges are or may be incurred by the
Trust as more fully described in the Indenture and Agreement: (a) fees of
the Trustee for extraordinary services, (b) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (c) various governmental charges, (d) expenses and costs of any
action taken by the Trustee to protect the Trust and the rights and
interests of the Unit Holders, (e) indemnification of the Trustee for any
loss, liability or expenses incurred by it in the administration of the
Trust without gross negligence, bad faith, wilful malfeasance or wilful
misconduct on its part or reckless disregard of its obligations and duties,
(f) indemnification of the Sponsor for any losses, liabilities and
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expenses incurred in acting as Sponsor or Depositor under the Agreement
without gross negligence, bad faith, wilful malfeasance or wilful
misconduct or reckless disregard of its obligations and duties, (g)
expenditures incurred in contacting Unit Holders upon termination of the
Trust, (h) brokerage commissions or charges incurred in connection with the
purchase or sale of Securities and (i) to the extent lawful, expenses
(including legal, auditing and printing expenses) of maintaining
registration or qualification of the Units and/or the Trust under Federal
or state securities laws so long as the Sponsor is maintaining a market for
the Units. The accounts of the Trust shall be audited not less frequently
than annually by independent certified public accountants designated by the
Sponsor, and the report of such accountants will be furnished by the
Trustee to Unit Holders upon request. The cost of such audit shall be an
expense of the Trust.
The fees and expenses set forth herein are payable out of the
Trust and when so paid by or owing to the Trustee are secured by a lien on
the Trust. Dividends on the Securities are expected to be sufficient to
pay the estimated expenses of the Trust. If the balances in the Income and
Principal Accounts are insufficient to provide for amounts payable by the
Trust, the Trustee has the power to sell Securities to pay such amounts.
To the extent Securities are sold, the size of the Trust will be reduced
and the proportions of the types of Securities may change. Such sales
might be required at a time when Securities would not otherwise be sold and
might result in lower prices than might otherwise be realized. Moreover,
due to the minimum lot size in which Securities may be required to be sold,
the proceeds of such sales may exceed the amount necessary for the payment
of such fees and expenses.
ADMINISTRATION OF THE TRUST
Records and Accounts
The Trustee will keep records and accounts of all transactions
of the Trust at its unit investment trust office at 101 Barclay Street, New
York, New York 10286. These records and accounts will be available for
inspection by Unit Holders at reasonable times during normal business
hours. The Trustee will additionally keep on file for inspection by Unit
Holders an executed copy of the Indenture and Agreement together with a
current list of the Securities then held in the Trust. In connection with
the storage and handling of certain Securities deposited in the Trust, the
Trustee is authorized to use the services of Depository Trust Company.
These services would include safekeeping of the Securities, computer
book-entry transfer and institutional delivery services. The Depository
Trust Company is a limited purpose trust company organized
-27-
<PAGE>
under the Banking Law of the State of New York, a member of the Federal
Reserve System and a clearing agency registered under the Securities
Exchange Act of 1934.
Distribution
Dividends payable to the Trust as a holder of record of its
Securities are credited by the Trustee to an Income Account, as of the date
on which the Trust is entitled to receive such dividends. Other receipts
such as return of principal and gain and including amounts received upon
the sale, pursuant to the Indenture and Agreement, of rights to purchase
other Securities distributed in respect of the Securities in the Portfolio,
are credited to a Principal Account. A distribution to a Unit Holder as of
a Record Date will be made on the following Distribution Date or shortly
thereafter and shall consist of such Holder's pro rata share of the
distributable cash balance of the Income Account and Principal Account.
Proceeds received from the disposition of any of the Securities which are
not used for redemption of Units or for the purchase of substitute
Securities will be held in the Principal Account to be distributed on the
Distribution Date following receipt of such proceeds. No distribution need
be made from the Principal Account if the balance therein is less than
$1.00 per 1,000 Units outstanding. A Reserve Account may be created by the
Trustee by withdrawing from the Income or Principal Accounts, from time to
time, such amounts as it deems requisite to establish a reserve for any
taxes or other governmental charges that may be payable out of the Trust.
Funds held by the Trustee in the various accounts created under the
Indenture are non-interest bearing to Unit Holders.
Portfolio Supervision
The original proportionate relationship between the number of
shares of each Security in the Trust will be adjusted to reflect the
occurrence of a stock dividend, a stock split, merger, reorganization or a
similar event which affects the capital structure of the issuer of a
Security in the Trust but which does not affect the Trust's percentage
ownership of the common stock equity of such issuer at the time of such
event. If the Trust receives the securities of another issuer as the
result of a merger or reorganization of, or a spin-off, split-off or
split-up by the issuer of a Security included in the original portfolio,
the Trust may hold those securities as if they were one of the Securities
initially deposited and adjust the proportionate relationship accordingly
for all future subsequent deposits.
The Portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described below are governed solely by the
provisions of the Indenture and
-28-
<PAGE>
Agreement. The Sponsor may direct the Trustee to dispose of Securities
upon failure of the issuer of a Security in the Trust to declare or pay
anticipated cash dividends, institution of certain materially adverse legal
proceedings, default under certain documents materially and adversely
affecting future declaration or payment of dividends, the occurrence of
other market or credit factors that in the opinion of the Sponsor would
make the retention of such Securities in the Trust detrimental to the
interests of the Unit Holders or if the disposition of such Securities is
desirable in order to maintain the qualification of the Trust as a
regulated investment company under the Code. If a failure to declare or
pay cash dividends on any of the Securities occurs and if the Sponsor does
not, within 30 days after notification, instruct the Trustee to sell or
hold such Securities, the Indenture provides that the Trustee shall
promptly sell such Securities. An offer to purchase a Security in the
Portfolio of the Trust may be accepted or rejected, or such security may be
sold on the market.
The Sponsor is authorized to instruct the Trustee to reinvest
the proceeds of the redemption or sale of any of the Securities in
substitute Securities. Moneys held in the Trust to cover the purchase of
Securities pursuant to contracts which have failed, may be also reinvested
in substitute Securities. The substitute Securities must satisfy certain
conditions specified in the Indenture including requirements that the
substitute securities shall be selected by the Sponsor from a list of
securities maintained by it, and updated from time to time, and that the
Securities shall have, in the opinion of the Sponsor, characteristics
sufficiently similar to the characteristics of the other Securities in the
Trust as to be acceptable for acquisition by the Trust. The purchase price
thereof may not exceed the amount of funds reserved for the purchase of
Securities by the Trustee.
During the life of the Trust, the Sponsor, as part of its
administrative responsibilities, shall conduct reviews to determine whether
or not to recommend the disposition of Securities. In addition, the
Sponsor shall undertake to perform such other reviews and procedures as it
may deem necessary in order for it to give the consents and directions,
including directions as to voting on the underlying Securities, required by
the Indenture and Agreement. For the administrative services performed in
making such recommendations and giving such consents and directions, and in
making the reviews called for in connection therewith the Sponsor shall
receive the portfolio supervisory fee referred to under "Summary of
Essential Information".
-29-
<PAGE>
Voting of the Portfolio Securities
Pursuant to the Indenture and Agreement, voting rights with
respect to the Portfolio Securities and Replacement Securities, if any,
will be exercised by the Trustee in accordance with the directions given by
the Sponsor.
Reports to Unit Holders
With each distribution, the Trustee will furnish to Unit
Holders a statement of the amount of income and other receipts distributed,
including the proceeds of the sale of the Securities, expressed in each
case as a dollar amount per Unit.
Within a reasonable period of time after the last business day
in each calendar year, but not later than February 15, the Trustee will
furnish to each person who at any time during such calendar year was a Unit
Holder of record a statement setting forth:
1. As to the Income and Principal Accounts:
(a) the amount of income received on the Securities;
(b) the amount paid for redemption of Units;
(c) the deductions for applicable taxes or other
governmental charges, if any, and fees and expenses
of the Sponsor, the Trustee and counsel;
(d) the amounts distributed from the Income Account;
(e) any other amount credited or deducted from the
Income Account; and
(f) the net amount remaining after such payments and
deductions expressed both as a total dollar amount
and as a dollar amount per Unit outstanding on the
last business day of such calendar year.
2. The following information:
(a) a list of the Securities as of the last business
day of such calendar year;
(b) the number of Units outstanding as of the last
business day of such calendar year;
-30-
<PAGE>
(c) the Unit Value (as defined in the Agreement) based
on the last Evaluation made during such calendar
year; and
(d) the amounts actually distributed during such
calendar year from the Income and Principal
Accounts, separately stated, expressed both as
total dollar amounts and as dollar amounts per Unit
outstanding on the Record Dates for such
distributions.
Amendment
The Indenture and Agreement may be amended from time to time by
the Trustee and the Sponsor or their respective successors, without the
consent of any of the Unit Holders (a) to cure any ambiguity or to correct
or supplement any provision contained therein which may be defective or
inconsistent with any other provision contained therein; (b) to change any
provision thereof as may be required by the Securities and Exchange
Commission or any successor governmental agency exercising similar
authority; (c) to add or change any provision as may be necessary or
advisable for the continuing qualification of the Trust as a regulated
investment company under the Code or to prevent the applicability of the 4%
excise tax imposed by Section 4982 of the Code; or (d) to make such other
provision in regard to matters or questions arising thereunder as shall not
adversely affect the interest of the Unit Holders; provided, that the
Indenture and Agreement may also be amended from time to time by the
parties thereto (or the performance of any of the provisions of this
Indenture may be waived) with the expressed written consent of Unit Holders
evidencing 51% of the Units at the time outstanding under the Indenture for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture and Agreement or of
modifying in any manner the rights of the Unit Holders; provided, further,
however, that the Indenture and Agreement may not be amended (nor may any
provision thereof be waived) so as to (1) increase the number of Units
issuable in respect of the Trust above the aggregate number specified in
Part II of the Reference Trust Agreement or such lesser amount as may be
outstanding at any time during the term of the Indenture, except as the
result of the deposit of Additional Securities, as therein provided, or
reduce the relative interest in the Trust of any Unit Holder without his
consent, or (2) permit the deposit or acquisition thereunder of securities
or other property either in addition to or in substitution for any of the
Securities except in the manner permitted by the Trust Indenture as in
effect on the date of the first deposit of Securities or permit the Trustee
to engage in business or investment activities not specifically
-31-
<PAGE>
authorized in the Indenture and Agreement as originally adopted.
Termination
The Indenture and Agreement provides that the Trust will be
liquidated during the Liquidation Period as set forth under "Summary of
Essential Information", herein, and terminated at the end of such period.
Additionally, if the value of the Trust as shown by any Evaluation is less
than forty percent (40%) of the value of the Securities deposited in the
Trust on the Date of Deposit and thereafter, the Trustee will, if directed
by the Sponsor in writing, terminate the Trust. The Trust may also be
terminated at any time by the written consent of Unit Holders owning 50% or
more of the Units then outstanding. Unit Holders will receive their final
distributions (that is, their pro rata distributions realized from the sale
of Portfolio Securities plus any other Trust assets, less Trust expenses)
according to their Election Instructions. The Election Instructions will
provide for the following distribution options: (1) cash distributions; or
(2) distributions "in kind" available only to any Unit Holder owning at
least 25,000 Units. Unit Holders who do not tender properly completed
Election Instructions to the Trustee will be deemed to have elected a cash
distribution.
Cash or "In Kind" Distributions. Unit Holders holding less
than 25,000 Units will receive distributions in respect of their Units at
termination solely in cash. Unit Holders holding at least 25,000 Units may
indicate to the Trustee that they wish to receive termination distributions
"in kind", by returning to the Trustee properly completed Election
Instructions distributed by the Trustee to such Unit Holders of record 45
days prior to the Termination Date. The Trustee will duly honor such
election instructions received on or before the In-Kind Distribution Date.
Such Unit Holder will be entitled to receive whole shares of each of the
underlying Portfolio Securities and cash from the Principal Account equal
to the fractional shares to which such tendering Unit Holder is entitled.
A Unit Holder receiving distributions of Securities "in kind" may incur
brokerage costs in converting Securities so received into cash. The
Trustee will transfer the Securities to be delivered "in kind" to the
account of, and for disposition in accordance with the instructions of, the
Unit Holder.
Method of Securities Disposal. The Trustee will begin to sell
the remaining Securities held in the Trust on the next business day
following the In-Kind Distribution Date. Since the Trust is not managed,
Securities in the Portfolio must be sold in accordance with the Indenture,
which provides for sales over a period of days or on any one day during the
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<PAGE>
Liquidation Period set forth in the "Summary of Essential Information".
Daily proceeds of such sales will be deposited into the Trust, will be held
in a non-interest bearing account until distributed and will be of benefit
to the Trustee. The sales of Portfolio Securities may tend to depress the
market prices for such Securities and thus reduce the proceeds available to
Unit Holders. The Sponsor believes that gradual liquidation of Securities
during the Liquidation Period may mitigate negative market price
consequences stemming from the trading of large volumes of Securities over
a short period of time. There can be no assurance, however, that such
procedures will effectively mitigate any adverse price consequences of
heavy volume trading or that such procedures will produce a better price
for Unit Holders than might have been obtained had all the Securities been
sold on one particular day during the Liquidation Period.
The Trustee will, after deduction of brokerage charges and
costs incurred in connection with the sale of Securities, any fees and
expenses of the Trust and payment into the Reserve Account of any amount
required for taxes or other governmental charges that may be payable by the
Trust, distribute to each Unit Holder, upon surrender for cancellation of
its Certificate after due notice of such termination, such Unit Holder's
pro rata share in the Income and Principal Accounts. The sale of
Securities in the Trust upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at such time.
For this reason, among others, the amount realized by a Unit Holder upon
termination may be less than the amount paid by such Unit Holder for Units.
RESIGNATION, REMOVAL AND LIABILITY
Regarding the Trustee
The Trustee shall be under no liability for any action taken in
good faith in reliance on prima facie properly executed documents or for
the disposition of monies or Securities in the Trust, nor shall the Trustee
be liable or responsible in any way for depreciation or loss incurred by
reason of the disposition of any Securities by the Trustee. However, the
Trustee shall be liable for wilful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the Indenture and Agreement.
In the event of a failure of the Sponsor to act, the Trustee may act under
the Indenture and Agreement 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 the Trust or in
respect of the Securities or the interest thereon. The Indenture and
Agreement also contain
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<PAGE>
other customary provisions limiting the liability of the Trustee and
providing for the indemnification of the Trustee for any loss or claim
accruing to it without gross negligence, bad faith, wilful misconduct,
wilful misfeasance or reckless disregard of its duties and obligations
under the Agreement on its part.
The Trustee or any successor may resign by executing an
instrument in writing, filing the same with the Sponsor and mailing a copy
of such notice of resignation to all Unit Holders then of record. Upon
receiving such notice the Sponsor will use its best efforts to appoint a
successor Trustee promptly. If the Trustee becomes incapable of acting or
becomes bankrupt or its affairs are taken over by public authorities, or if
the Trustee has materially failed to perform its duties under the Indenture
and Agreement and the interest of the Unit Holders has been impaired as a
result, the Sponsor may remove the Trustee and appoint a successor as
provided in the Agreement. If within 30 days of the resignation of a
Trustee no successor has been appointed or, if appointed, has not accepted
the appointment, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or
removal of a Trustee becomes effective only when the successor Trustee
accepts its appointment as such or when a court of competent jurisdiction
appoints a successor Trustee.
Regarding the Sponsor
The Sponsor shall be under no liability to the Trust or to Unit
Holders for taking any action or for refraining from any action in good
faith or for errors in judgment. Nor shall the Sponsor be liable or
responsible in any way for depreciation or loss incurred by reason of the
disposition of any Security. The Sponsor will, however, be liable for its
own wilful misfeasance, wilful misconduct, bad faith, gross negligence or
reckless disregard of its duties and obligations under the Agreement.
If at any time the Sponsor shall resign under the Agreement or
shall fail or be incapable of performing its duties thereunder or shall
become bankrupt or its affairs are taken over by public authorities, the
Agreement directs the Trustee to either (1) appoint a successor Sponsor or
Sponsors at rates of compensation deemed reasonable by the Trustee not
exceeding amounts prescribed by the Securities and Exchange Commission, or
(2) terminate the Trust Indenture and Agreement and the Trust and liquidate
the Trust. The Trustee will promptly notify Unit Holders of any such
action.
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<PAGE>
MISCELLANEOUS
Sponsor
Dean Witter Reynolds Inc. ("Dean Witter") is a corporation
organized under the laws of the State of Delaware and is a principal
operating subsidiary of Dean Witter, Discover & Co. ("DWDC"), a
publicly-held corporation. Dean Witter is a financial services company
that provides to its individual, corporate, and institutional clients
services as a broker in securities and commodities, a dealer in corporate,
municipal, and government securities, an investment banker, an investment
adviser, and an agent in the sale of life insurance and various other
products and services. Dean Witter is a member firm of the New York Stock
Exchange, the American Stock Exchange, the Chicago Board Options Exchange,
other major securities exchanges and the National Association of Securities
Dealers, and is a clearing member of the Chicago Board of Trade, the
Chicago Mercantile Exchange, the Commodity Exchange Inc., and other major
commodities exchanges. Dean Witter is currently servicing its clients
through a network of approximately 375 domestic and international offices
with approximately 8,500 account executives servicing individual and
institutional client accounts.
Trustee
The Trustee is The Bank of New York with its principal place of
business at 48 Wall Street, New York, New York 10286 and its unit
investment trust office at 101 Barclay Street, New York, New York 10286.
The Trustee is organized under the laws of the State of New York, is a
member of the New York Clearing House Association and is subject to
supervision and examination by the Superintendent of Banks of the State of
New York, the Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System. Unit Holders should direct
inquiries regarding distributions, address changes and other matters
relating to the administration of the Trust to the Trustee at Unit
Investment Trust Division, P.O. Box 974, Wall Street Station, New York, New
York 10268-0974.
Legal Opinions
The legality of the Units offered hereby has been passed upon
by Cahill Gordon & Reindel, a partnership including a professional
corporation, 80 Pine Street, New York, New York 10005, as special counsel
for the Sponsor.
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<PAGE>
AUDITORS
The Statement of Financial Condition and Schedule of Portfolio
Securities of this series of the Dean Witter Select Equity Trust included
in this Prospectus have been audited by Deloitte & Touche LLP, certified
public accountants, as stated in their report as set forth in this
Prospectus, and are included in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
-36-
<PAGE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
THE UNIT HOLDERS, SPONSOR AND TRUSTEE
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
We have audited the statement of financial condition and schedule of
portfolio securities of the Dean Witter Select Equity Trust Bank Stock
Portfolio Series 2 as of August 31, 1996, and the related statements of
operations and changes in net assets for the year ended August 31, 1996 and
the period from September 27, 1994 (date of deposit) to August 31, 1995.
These financial statements are the responsibility of the Trustee (see
Footnote (a)(1)). Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with 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 the securities owned as of
August 31, 1996 as shown in the statement of financial condition and
schedule of portfolio securities by correspondence with The Bank of New
York, the Trustee. An audit also includes assessing the accounting
principles used and the significant estimates made by the Trustee, as well
as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Dean Witter Select
Equity Trust Bank Stock Portfolio Series 2 as of August 31, 1996, and the
results of its operations and the changes in its net assets for the year
ended August 31, 1996 and the period from September 27, 1994 (date of
deposit) to August 31, 1995 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
November 5, 1996
New York, New York
F-1
</AUDIT-REPORT>
<PAGE>
STATEMENT OF FINANCIAL CONDITION
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
TRUST PROPERTY
Investments in Securities at market value(cost
$50,662,889) (Note (a) and Schedule of Portfolio
Securities Notes (1) and (2)) $68,129,904
Accrued dividend receivable 110,054
Receivable from Broker 72,684
Cash 491,180
Total 68,803,822
LIABILITIES AND NET ASSETS
Less Liabilities:
Payable to Unit Holders 73,051
Accrued Trustee's fees and expenses 40,000
Total liabilities 113,051
Net Assets:
Balance applicable to 46,689,489 Units of
fractional undivided interest outstanding
(Note (c)):
Capital, plus unrealized market
appreciation of $17,467,015 $68,129,904
Undistributed principal and net investment
income (Note (b)) 560,867
Net assets $68,690,771
Net asset value per Unit ($68,690,771 divided by
46,689,489 Units) $ 1.4712
See notes to financial statements
F-2
<PAGE>
STATEMENTS OF OPERATIONS
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
For the period from
September 27, 1994
For the year ended (date of deposit)
August 31, 1996 to August 31, 1995
Investment income - dividends $ 2,466,371 $ 712,943
Less Expenses:
Trustee's fees and expenses 76,496 50,899
Sponsor's fees 13,133 3,975
Total expenses 89,629 54,874
Investment income - net 2,376,742 658,069
Net gain on investments:
Realized gain on securities sold
or redeemed 3,902,629 -
Unrealized market appreciation 10,546,892 6,920,123
Net gain on investments 14,449,521 6,920,123
Net increase in net assets resulting
from operations $16,826,263 $7,578,192
See notes to financial statements
F-3
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
For the period from
September 27, 1994
For the year ended (date of deposit)
August 31, 1996 to August 31, 1995
Operations:
Investment income - net $ 2,376,742 $ 658,069
Realized gain on securities sold
or redeemed 3,902,629 -
Unrealized market appreciation 10,546,892 6,920,123
Net increase in net
assets resulting from
operations 16,826,263 7,578,192
Less Distributions to Unit Holders:
Investment income - net (2,224,460) (371,166)
Total distributions (2,224,460) (371,166)
Less Capital Share Transactions:
Creation of 22,500,000 Units and
38,500,000 Units, respectively 27,820,671 38,633,264
Redemption of 14,560,432 Units and
79 Units, respectively (19,707,551) (74)
Accrued dividend on redemption (97,511) -
Total capital share trans-
actions 8,015,609 38,633,190
Net increase in net assets 22,617,412 45,840,216
Net assets:
Beginning of period (Note (c)) 46,073,359 233,143
End of period (including undistrib-
uted principal and net investment
income of $560,867 and $485,990,
respectively) $68,690,771 $46,073,359
See notes to financial statements
F-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
(a) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of the significant
accounting policies of the Trust:
(1) Basis of Presentation
The Trustee has custody of and responsibility for all accounting
and financial books, records, financial statements and related
data of the Trust and is responsible for establishing and
maintaining a system of internal controls directly related to, and
designed to provide reasonable assurance as to the integrity and
reliability of, financial reporting of the Trust. The Trustee is
also responsible for all estimates and accruals reflected in the
Trust's financial statements. Under the Securities Act of 1933
("the Act"), as amended, the Sponsor is deemed to be an issuer of
the Trust Units. As such, the Sponsor has the responsibility of
an issuer under the Act with respect to financial statements of
the Trust included in the Trust's Registration Statement under the
Act and amendments thereto.
(2) Investments
Investments are stated at market value as determined by the
Trustee, based on the closing price on the New York Stock Exchange
or the closing sale price on the over-the-counter market, on the
last day of trading during the period. The value on the date of
initial deposit (September 27, 1994) represents the cost of
investments to the Trust based on the closing sale price on the
New York Stock Exchange or the closing sale price on the over-the-
counter market. The cost of investments purchased subsequent to
the date of initial deposit is based on the closing sale price on
the New York Stock Exchange or the over-the-counter market on the
date of purchase.
(3) Income Taxes
No provision for Federal income taxes has been made in the
accompanying financial statements because the Trust has elected
and intends to continue to qualify for the tax treatment
applicable to "Regulated Investment Companies" under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it
will not be subject to Federal income tax on net income and
capital gains that are distributed to Unit Holders.
(4) Expenses
The Trust pays annual Trustee's fees, estimated expenses,
Evaluator's fees, and annual Sponsor's portfolio supervision fees
and may incur additional charges as explained under "Expenses and
Charges - Fees" and "- Other Charges" in this Prospectus.
F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
(5) Reclassification
Certain amounts in the prior years' financial statements have been
reclassified to conform with current year presentation.
(b) DISTRIBUTIONS
Distributions of dividend income and principal, if any, received by the
Trust are made to Unit Holders on a quarterly basis and distributions
of net realized capital gains, if any, will be made annually, within 30
days after the end of the Trust's taxable year to Unit Holders of
record. Record Dates are the first day of March, June, September and
December and Distribution Dates are the fifteenth days of such months
(or shortly thereafter). Upon termination of the Trust, the Trustee
will distribute to each Unit Holder his pro rata share of the Trust's
assets, less expenses. (See: "Administration of the Trust -
Termination" in this Prospectus.)
(c) ORIGINAL COST TO INVESTORS
The original cost to investors represents the aggregate initial public
offering price as of the date of deposit (September 27, 1994), computed
on the basis set forth under "Public Offering of Units - Public
Offering Price" in this Prospectus.
A reconciliation of the original cost of Units to investors to the net
amount applicable to investors as of August 31, 1996 follows:
Original cost to investors $ 243,492
Less: Gross underwriting commissions (sales charge) (10,349)
Net cost to investors 233,143
Cost to investors of Units created during deposit
period 66,254,774
Unrealized market appreciation 17,467,015
Cost of securities sold or redeemed (15,825,028)
Net amount applicable to investors $68,129,904
F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
(d) OTHER INFORMATION
Selected data for a Unit of the Trust during each period:
For the period from
September 27, 1994
For the year ended (date of deposit)
August 31, 1996 to August 31, 1995
Net investment income dis-
tribution during period $ .0441 $ .0202
Net asset value at end of
period $1.4712 $1.1890
Trust Units outstanding at
end of period 46,689,489 38,749,921
F-7
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF PORTFOLIO SECURITIES
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
Percentage
Port- Price Per of Aggregate Market
folio Number of Share to Market Value Value
No. Symbol Name of Issuer Shares Trust of Trust <F6><F7>
<S><C> <C> <C> <C> <C>
1. ASO AmSouth Bancorporation 39,139 $ 39.375 2.262% $ 1,541,098
2. BOH Bancorp Hawaii, Inc. 39,705 37.875 2.207 1,503,827
3. BAC BankAmerica Corporation 26,464 77.500 3.010 2,050,960
4. BKB Bank of Boston Corporation 45,104 52.750 3.492 2,379,236
5. BK The Bank of New York Company, Inc.<F8> 79,027<F10> 27.875 3.233 2,202,878
6. BT Bankers Trust New York Corporation 18,456 77.750 2.106 1,434,954
7. BBI Barnett Banks, Inc. 27,775 65.625 2.675 1,822,734
8. BOAT Boatmen's Bancshares, Inc. <F9> 39,514 53.250 3.088 2,104,121
9. CMB Chase Manhattan Corp. <F10> 70,171 74.375 7.660 5,218,968
10. CMA Comerica Incorporated 43,069 48.750 3.082 2,099,614
11. CBSH Commerce Bancshares <F9><F10> 42,676 36.500 2.286 1,557,674
12. CBSS Compass Bancshares <F9> 51,644 33.625 2.549 1,736,530
13 CFL Corestates Financial Corp. 44,732 41.375 2.717 1,850,787
14. FCOM First Commerce Corporation <F9> 45,104 35.750 2.367 1,612,468
15 FOA First of America Bank Corporation 34,113 47.250 2.366 1,611,839
16. FTEN First Tennessee National Corporation<F9> 53,676<F10> 34.125 2.689 1,831,693
17. FTU First Union Corp. <F10> 66,157 63.875 6.203 4,225,778
18. FVB First Virginia Banks Inc. 31,680 41.500 1.930 1,314,720
19. FLT Fleet Financial Group 32,254 41.750 1.977 1,346,605
20. JPM J.P. Morgan & Co. 19,952 87.625 2.566 1,748,294
22. KEY KeyCorp 39,514 40.125 2.327 1,585,499
23. MEL Mellon Bank Corporation 31,663 55.375 2.574 1,753,339
24. NCC National City Corp. <F10> 97,116 37.625 5.363 3,653,990
25. NB Nations Bank Corporation 25,351 85.125 3.168 2,158,004
26. FCN First Chicago NBD Corp. (formerly NBD
Bancorp, Inc.) 42,323 42.625 2.648 1,804,018
27. NOB Norwest Corporation 47,342 37.625 2.615 1,781,243
28. OKEN Old Kent Financial Corporation <F9><F10> 41,499 40.375 2.459 1,675,522
29. PNC PNC Bank Corp. 46,050 31.250 2.112 1,439,062
30. SBK Signet Banking Corporation 33,917 24.125 1.201 818,248
31. SOTR SouthTrust Corporation <F9> 61,139 29.500 2.647 1,803,600
32. STB Star Banc Corp. 29,270 78.750 3.383 2,305,012
33. ZION Zions Bancorporation <F9> 31,138 86.250 3.942 2,685,652
34. COF Capital One Financial Corporation 33,917 30.125 1.500 1,021,750
35. WFC Wells Fargo & Co. <F10> 9,850 248.750 3.596 2,450,187
$68,129,904
See notes to schedule of portfolio securities
F-8
</TABLE>
<PAGE>
NOTES TO SCHEDULE OF PORTFOLIO SECURITIES
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
[FN]
<F6> Valuation of Securities by the Trustee was made on the basis of the
closing sale price on the New York Stock Exchange or the closing
sale price on the over-the-counter market as of August 30, 1996,
the last trading date during the period.
<F7> At August 31, 1996, the unrealized market appreciation of all
Securities was comprised of the following:
Gross unrealized market appreciation $17,467,015
Gross unrealized market depreciation -
Unrealized market appreciation $17,467,015
The aggregate cost of the Securities for Federal income tax
purposes was $50,662,889 at August 31, 1996.
<F8> Dean Witter Reynolds Inc. was manager or co-manager of an offering
of Securities of this company within the past three years.
<F9> Dean Witter Reynolds Inc. makes a market in this Security.
<F10> A 5% stock dividend on Commerce Bancshares was declared on
October 6, 1995 for stockholders of record on November 30, 1995.
A 5% stock dividend on Old Kent Financial Corporation was declared
on June 17, 1996, for stockholders of record on June 25, 1996.
First Fidelity Bankcorporation (new) merged into a wholly-owned
subsidiary of First Union Corp. on January 1, 1996, the effective
date. Stockholders received 1.35 shares for one share of First
Fidelity Bankcorporation (new).
A two-for-one stock split for First Tennessee National Corp. was
declared on January 16, 1996 for stockholders of record on
February 2, 1996.
Chase Manhattan Corp. (old) merged into Chemical Banking
Corporation on March 31, 1996, the effective date, under title
Chase Manhattan Corp. (New). Chase Manhattan Corp. (old) received
1.04 shares of Chase Manhattan Corp. (new) for one share of Chase
Manhattan Corp. (old).
First Interstate Bancorp merged with Wells Fargo & Co. on April 1,
1996, the effective date. Stockholders received 2/3 share for one
share of First Interstate Bancorp held.
Integra Financial Corp. merged with National City Corp. on May 3,
1996, the effective date. Stockholders received 2 shares for one
share of Integra Financial Corp. held.
F-9
<PAGE>
NOTES TO SCHEDULE OF PORTFOLIO SECURITIES
DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES 2
August 31, 1996
A two-for-one stock split for The Bank of New York Company, Inc.
was declared on July 9, 1996 for stockholders of record on
July 19, 1996.
F-10
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Cross Reference Sheet.
The Prospectus.
The signatures.
Consent of Independent Auditors; all other
consents were previously filed.
The following exhibits:
23. 1b. Consent of Independent Auditors.
27. Financial Data Schedule.
<PAGE>
CONSENT OF COUNSEL
The consent of counsel to the use of its name in the Prospectus
included in this Registration Statement is contained in its opinion filed
as Exhibit EX-5. to this Registration Statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Dean Witter Select Equity Trust, Bank Stock Portfolio Series 2,
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 2 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York and State of New
York on the 14th day of November, 1996.
DEAN WITTER SELECT EQUITY TRUST,
BANK STOCK PORTFOLIO SERIES 2
(Registrant)
By: DEAN WITTER REYNOLDS INC.
(Depositor)
Thomas Hines
Thomas Hines
Authorized Signatory
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 2 to the Registration Statement has been
signed on behalf of Dean Witter Reynolds Inc., the Depositor, by the
following person in the following capacities and by the following persons
who constitute a majority of the Depositor's Board of Directors in The City
of New York and State of New York on this 14th day of November, 1996.
DEAN WITTER REYNOLDS INC.
Name Office
Philip J. Purcell Chairman and Chief)
Executive Officer )
and Director<F32> )
By: Thomas Hines
Thomas Hines
Attorney-in-fact<F32>
___________________
<F32> Executed copies of the Powers of Attorney have been filed with the
Securities and Exchange Commission in connection with Amendment No. 1
to the Registration Statement on Form S-6 for File No. 333-10499.
<PAGE>
Name Office
Richard M. DeMartini Director<F32>
Robert J. Dwyer Director<F32>
Christine A. Edwards Director<F32>
Charles A. Fiumefreddo Director<F32>
James F. Higgins Director<F32>
Stephen R. Miller Director<F32>
Richard F. Powers Director<F32>
Philip J. Purcell Director<F32>
Thomas C. Schneider Director<F32>
William B. Smith Director<F32>
___________________
<F32> Executed copies of the Powers of Attorney have been filed with the
Securities and Exchange Commission in connection with Amendment No. 1
to the Registration Statement on Form S-6 for File No. 333-10499.
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. TITLE OF DOCUMENT
23. 1b. Consent of Deloitte & Touche LLP
27. Financial Data Schedule
<PAGE>
Exhibit 23.1b.
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated November 5, 1996, accompanying the
financial statements of the Dean Witter Select Equity Trust Bank Stock
Portfolio Series 2 included herein and to the reference to our Firm as
experts under the heading "Auditors" in the prospectus which is a part of
this registration statement.
DELOITTE & TOUCHE LLP
November 14, 1996
New York, New York
<TABLE> <S> <C>
<PAGE>
<PAGE>
<ARTICLE> 6
<LEGEND> THE SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS FOR DEAN WITTER SELECT
EQUITY TRUST BANK STOCK PORTFOLIO SERIES 2
AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
<RESTATED>
<SERIES>
<NAME> DEAN WITTER SELECT EQUITY TRUST
BANK STOCK PORTFOLIO SERIES
<NUMBER> 2
<MULTIPLIER> 1
<FISCAL-YEAR-END> Aug-31-1996
<PERIOD-START> Sep-1-1995
<PERIOD-END> Aug-31-1996
<PERIOD-TYPE> YEAR
<INVESTMENTS-AT-COST> 50,662,889
<INVESTMENTS-AT-VALUE> 68,129,904
<RECEIVABLES> 182,738
<ASSETS-OTHER> 491,180
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 68,803,822
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 113,051
<TOTAL-LIABILITIES> 113,051
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 50,745,180
<SHARES-COMMON-STOCK> 46,689,489
<SHARES-COMMON-PRIOR> 38,749,921
<ACCUMULATED-NII-CURRENT> 564,678
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,467,015
<NET-ASSETS> 68,690,771
<DIVIDEND-INCOME> 2,466,371
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 89,629
<NET-INVESTMENT-INCOME> 2,376,742
<REALIZED-GAINS-CURRENT> 3,902,629
<APPREC-INCREASE-CURRENT> 10,546,892
<NET-CHANGE-FROM-OPS> 16,826,263
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,224,460
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 22,500,000
<NUMBER-OF-SHARES-REDEEMED> 14,560,432
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 22,617,412
<ACCUMULATED-NII-PRIOR> 486,025
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
