Diversification Test Clause Samples

Diversification Test. In the case of a trust which has elected to qualify as a Regulated Investment Company the Trustee shall determine the value of the Securities in the Trust Fund as of (1) the Friday (or the immediately preceding Business Day if such Friday is not a Business Day) before the last business day of the first quarter of the Trust Fund's first taxable year and (2) the last business day of the first quarter of the Trust Fund's first taxable year. For purposes of this Section 3.13 each said day and each such day in any subsequent quarter in which additional Securities are acquired shall except as the context may otherwise require, be hereinafter referred to as the "Diversification Test Date." On each Diversification Test Date the Trustee shall determine whether or not the aggregate fair market value of all Securities of any one issuer valued at greater than 5% of the total assets of the Trust Fund exceeds 50% of the total assets of the Trust Fund on such Diversification Test Date. In making the necessary computations the Trustee shall compute the fair market value of the Securities by taking the value of the Securities in the Trust Fund, including the amount of any accrued interest or dividends receivable thereon, by treating as Securities of the same issuer only those securities whose name so dictates; by treating contracts to purchase Securities as if the Securities subject to such contracts had been acquired by the Trust Fund; and by the settlement of contracts to purchase Securities as the acquisition of Securities on their respective settlement dates. In the event the foregoing determination by the Trustee states that the aggregate value of Securities of any one issuer valued at more than 5% of the total assets of the Trust Fund on the Friday (or the immediately prior Business Day if such Friday is not a Business Day) before the last Business Day in the first quarter of the first taxable year of the Trust Fund exceeds 50% of the total assets of the Trust Fund on such date, as provided in Section 3.06, other than for Government Securities, the Sponsor shall direct the Trustee to sell all or any portion of the Securities whose value is greater than 50% of total assets of the Trust Fund or take such other action as is necessary, so that the aggregate fair market value of Securities of any one issuer with values greater than 5% of the total assets of the Trust Fund does not exceed 50% of the total assets of the Trust Fund on the last Business Day of the first quart...