Date Shares Price Per Share
8/2/2013 800 $13.96
8/5/2013 600 $13.84
8/7/2013 (200) $13.92
8/7/2013 100 $13.84
8/9/2013 1,000 $13.85
8/9/2013 (60) $13.96
8/14/2013 9,608 $13.92
8/15/2013 3,330 $13.85
8/16/2013 2,979 $13.83
8/19/2013 6,184 $13.78
8/20/2013 3,108 $13.76
8/21/2013 1,000 $13.73
8/22/2013 (300) $13.73
8/27/2013 500 $13.69
8/28/2013 2,900 $13.70
9/3/2013 300 $13.78
9/6/2013 405 $13.77
9/9/2013 2,675 $13.80
9/11/2013 3,000 $13.78
9/12/2013 1,100 $13.79
9/17/2013 1,000 $13.87
9/18/2013 6,000 $13.88
9/19/2013 100 $13.87
9/19/2013 (75) $14.00
9/20/2013 970 $13.91
9/24/2013 6,000 $13.87
9/25/2013 335 $14.03
9/26/2013 6,000 $14.00
9/27/2013 11,480 $13.99
9/30/2013 15,375 $13.96
10/1/2013 778 $13.91
10/2/2013 3,033 $13.93
The Accounts have the right to receive all dividends from, and any proceeds from the sale of the Shares. None of the Accounts has an interest in Shares constituting more than 5% of the Shares outstanding.
Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer.
Except as described above, there are no contracts, arrangements, understandings or relationships of any kind among the Principals and KIM and between any of them and any other person with respect to any of Fort Dearborn Income Securities, Inc. securities.
Item 7. Materials to be Filed as Exhibits.
As is indicated in Item 4, above, KIM has purchased Fort Dearborn Income Securities, Inc. for the Accounts for investment purposes. However, KIM has reserved the right to contact management with regard to concerns that they have with respect to the Fund, including letters to the Board and/or other communications with fund management. Accordingly, KIM sent a letter to the Fund on October 4, 2013. A copy of the letter is attached as Exhibit 1.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.
Karpus Management, Inc.
By: /s/
Name: Daniel Lippincott
Title: Senior Tax-Sensitive Manager
Date: October 7, 2013
EXHIBIT 1
Letter to the Fund
Transmitted October 4, 2013
Mark E. Kemper, Vice-President and Secretary October 4, 2013
UBS Global Asset Management (Americas), Inc.
One North Wacker Drive
Chicago, Illinois 60606
Re: Fort Dearborn Income Securities, Inc. (NYSE: FDI)
Mr. Kemper:
Karpus Management, Inc., d/b/a Karpus Investment Management ("Karpus") is a registered investment advisor. Karpus represents ownership of 330,307 shares of Fort Dearborn Income Securities, Inc. ("FDI" or the "Fund"). This represents approximately 3.76% of the Fund's outstanding common shares. Our clients have held shares of FDI since 2003. I write this letter on behalf of Karpus to express our concerns over the recently announced changes to FDI's investment policies.
First and foremost, as long-term investors in the Fund, we are disappointed in the announced changes. Not only is the Fund making changes to "non-fundamental" policies, but it is also trying to ask shareholders the ability to make "fundamental" policies "non-fundamental." While many shareholders may not understand what this means, if approved it allows the Fund's manager to change a wide variety of its investment policies at will, and without shareholder vote. This is not acceptable. If the Fund had desired to have this much leeway, we believe it should have had done so at the inception of the Fund.
Because of this shift in policies, shareholders could be forced to sell shares at an inopportune time because of investment policy restrictions. This is why we believe that if these policies are in fact approved, the Fund should conduct a meaningful tender offer at net asset value. Doing so would allow dissenting shareholders to exit their investment without having to sell their shares in the open market and potentially cause damages to other shareholders by flooding the market with significant amounts of share sales.
Interestingly, the Fund chose to announce the proposed changes substantially after the Fund's 14a-8 deadline date of July 5, and on the deadline date for shareholders to timely submit a proposal outside of 14a-8. Regardless of the motive for doing this, the bottom line is that the changes implemented without shareholder vote, as well as those to be submitted for shareholder vote, have the effect of eliminating some of the very reasons why investors chose to invest in the Fund in the first place.
While widening the investable universe may serve to benefit the Fund overall, there is absolutely no proof that it will. Furthermore, the additional risks may not be something that shareholders intended to assume when they originally purchased the Fund. In our opinion, for the Fund's Board to approve and recommend the suggested changes to shareholders, they must provide a means for dissenting shareholders to exit their investment without being harmed and without causing harm for shareholders choosing to remain in the Fund.
Thank you in advance for your time and consideration. Please do not hesitate to contact me at (585) 586-4680 with any further questions or concerns.
Sincerely,
/s/
Brett D. Gardner
Sr. Corporate Governance Analyst