Hartford Funds Exchange-Traded Trust, et al.; Notice of Application, 70712-70714 [2016-24708]
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Federal Register / Vol. 81, No. 198 / Thursday, October 13, 2016 / Notices
II. Docketed Proceeding(s)
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I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s Web site (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3007.40.
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: CP2016–49; Filing
Title: Notice of United States Postal
Service of Change in Prices Pursuant to
Amendment to Priority Mail Contract
166; Filing Acceptance Date: October 5,
2016; Filing Authority: 39 CFR 3015.5;
Public Representative: Jennaca D.
Upperman; Comments Due: October 14,
2016.
2. Docket No(s).: MC2017–1 and
CP2017–1; Filing Title: Request of the
United States Postal Service to Add
Priority Mail Contract 245 to
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Competitive Product List and Notice of
Filing (Under Seal) of Unredacted
Governors’ Decision, Contract, and
Supporting Data; Filing Acceptance
Date: October 5, 2016; Filing Authority:
39 U.S.C. 3642 and 39 CFR 3020.30 et
seq.; Public Representative: Katalin K.
Clendenin; Comments Due: October 14,
2016.
3. Docket No(s).: MC2017–2 and
CP2017–2; Filing Title: Request of the
United States Postal Service to Add
Priority Mail Contract 246 to
Competitive Product List and Notice of
Filing (Under Seal) of Unredacted
Governors’ Decision, Contract, and
Supporting Data; Filing Acceptance
Date: October 5, 2016; Filing Authority:
39 U.S.C. 3642 and 39 CFR 3020.30 et
seq.; Public Representative: Katalin K.
Clendenin; Comments Due: October 14,
2016.
4. Docket No(s).: MC2017–3 and
CP2017–3; Filing Title: Request of the
United States Postal Service to Add
Priority Mail Contract 247 to
Competitive Product List and Notice of
Filing (Under Seal) of Unredacted
Governors’ Decision, Contract, and
Supporting Data; Filing Acceptance
Date: October 5, 2016; Filing Authority:
39 U.S.C. 3642 and 39 CFR 3020.30 et
seq.; Public Representative: Katalin K.
Clendenin; Comments Due: October 14,
2016.
5. Docket No(s).: MC2017–4 and
CP2017–4; Filing Title: Request of the
United States Postal Service to Add
Priority Mail Express, Priority Mail &
First-Class Package Service Contract 11
to Competitive Product List and Notice
of Filing (Under Seal) of Unredacted
Governors’ Decision, Contract, and
Supporting Data; Filing Acceptance
Date: October 5, 2016; Filing Authority:
39 U.S.C. 3642 and 39 CFR 3020.30 et
seq.; Public Representative: Lyudmila Y.
Bzhilyanskaya; Comments Due: October
14, 2016.
This Notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2016–24713 Filed 10–12–16; 8:45 am]
BILLING CODE 7710–FW–P
PRESIDIO TRUST
Notice of Wireless
Telecommunications Site
The Presidio Trust.
Public notice.
AGENCY:
ACTION:
This notice announces the
Presidio Trust’s receipt of and
availability for public comment on an
SUMMARY:
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application from T-Mobile West LLC to
construct and operate a new wireless
telecommunications facilities site
(‘‘Project’’) in the Presidio of San
Francisco. The proposed location of the
Project is in the vicinity of 1450 Battery
Caulfield Road.
The Project involves (i) co-locating
nine antennae and one microwave dish
mounted at a centerline of 116 feet on
a 130-foot lattice tower being
constructed by Verizon Wireless, and
(ii) placing the associated radio and
communications equipment on a
concrete pad adjacent to the tower.
Power and fiber connections for the
project will be provided through
underground cables connected to
existing power and fiber sources.
Comments: Comments on the
proposed project must be sent to Steve
Carp, Presidio Trust, 103 Montgomery
Street, P.O. Box 29052, San Francisco,
CA 94129–0052, and be received by
November 15, 2016. A copy of TMobile’s application is available upon
request to the Presidio Trust.
FOR FURTHER INFORMATION CONTACT:
Steve Carp, Presidio Trust, 103
Montgomery Street, P.O. Box 29052, San
Francisco, CA 94129–0052. Email:
scarp@presidiotrust.gov. Telephone:
415.561.5300.
Dated: October 6, 2016.
Andrea M. Andersen,
Acting General Counsel.
[FR Doc. 2016–24739 Filed 10–12–16; 8:45 am]
BILLING CODE 4310–4R–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32307; 812–14592]
Hartford Funds Exchange-Traded
Trust, et al.; Notice of Application
October 6, 2016.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
2(a)(32), 5(a)(1), 22(d), and 22(e) of the
Act and rule 22c–1 under the Act, under
sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and
17(a)(2) of the Act, and under section
12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and 12(d)(1)(B) of
the Act. The requested order would
permit (a) index-based series of certain
open-end management investment
companies (‘‘Funds’’) to issue shares
redeemable in large aggregations only
AGENCY:
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Federal Register / Vol. 81, No. 198 / Thursday, October 13, 2016 / Notices
(‘‘Creation Units’’); (b) secondary market
transactions in Fund shares to occur at
negotiated market prices rather than at
net asset value (‘‘NAV’’); (c) certain
Funds to pay redemption proceeds,
under certain circumstances, more than
seven days after the tender of shares for
redemption; (d) certain affiliated
persons of a Fund to deposit securities
into, and receive securities from, the
Fund in connection with the purchase
and redemption of Creation Units; (e)
certain registered management
investment companies and unit
investment trusts outside of the same
group of investment companies as the
Funds (‘‘Funds of Funds’’) to acquire
shares of the Funds; and (f) certain
Funds (‘‘Feeder Funds’’) to create and
redeem Creation Units in-kind in a
master-feeder structure.
Hartford Funds ExchangeTraded Trust (the ‘‘Trust’’), a Delaware
statutory trust that will be registered
under the Act as an open-end
management investment company with
multiple series, Hartford Funds
Management Company, LLC (the ‘‘Initial
Adviser’’), a Delaware limited liability
company registered as an investment
adviser under the Investment Advisers
Act of 1940, and Hartford Funds
Distributor, a broker-dealer registered
under the Securities Exchange Act of
1934 (‘‘Exchange Act’’).
FILING DATES: The application was filed
on December 15, 2015, and amended on
June 9, 2016.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on October 31, 2016, and
should be accompanied by proof of
service on applicants, in the form of an
affidavit, or for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090;
Applicants: Edward P. Macdonald, Esq.,
5 Radnor Corporate Center, 100
Matsonford Road, Suite 300, Radnor, PA
19087.
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APPLICANTS:
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FOR FURTHER INFORMATION CONTACT:
Michael S. Didiuk, Senior Counsel, at
(202) 551–8639, or Holly Hunter-Ceci,
Branch Chief, at (202) 551–6825
(Division of Investment Management,
Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Summary of the Application
1. Applicants request an order that
would allow Funds to operate as index
exchange traded funds (‘‘ETFs’’).1 Fund
shares will be purchased and redeemed
at their NAV in Creation Units only. All
orders to purchase Creation Units and
all redemption requests will be placed
by or through an ‘‘Authorized
Participant’’, which will have signed a
participant agreement with a brokerdealer registered under the Exchange
Act (together with any future
distributor, the ‘‘Distributor’’). Shares
will be listed and traded individually on
a national securities exchange, where
share prices will be based on the current
bid/offer market. Certain Funds may
operate as Feeder Funds in a masterfeeder structure. Any order granting the
requested relief would be subject to the
terms and conditions stated in the
application.
2. Each Fund will hold investment
positions selected to correspond
generally to the performance of an
Underlying Index. In the case of SelfIndexing Funds, an affiliated person, as
defined in section 2(a)(3) of the Act
(‘‘Affiliated Person’’), or an affiliated
person of an Affiliated Person (‘‘SecondTier Affiliate’’), of the Trust or a Fund,
of the Adviser, of any sub-adviser to or
promoter of a Fund, or of the Distributor
will compile, create, sponsor or
maintain the Underlying Index.2
1 Applicants request that the order apply to the
Trust’s initial index-based ETF series, as well as
any additional series of the Trust, and any other
open-end management investment company or
existing or future series thereof that may be created
in the future (each, included in the term ‘‘Fund’’),
each of which will operate as an ETF and will track
a specified index comprised of domestic or foreign
equity and/or fixed income securities (each, an
‘‘Underlying Index’’). Any Fund will (a) be advised
by the Initial Adviser or an entity controlling,
controlled by, or under common control with the
Initial Adviser (each, an ‘‘Adviser’’) and (b) comply
with the terms and conditions of the application.
2 Each Self-Indexing Fund will post on its Web
site the identities and quantities of the investment
positions that will form the basis for the Fund’s
calculation of its NAV at the end of the day.
Applicants believe that requiring Self-Indexing
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70713
3. Shares will be purchased and
redeemed in Creation Units and
generally on an in-kind basis. Except
where the purchase or redemption will
include cash under the limited
circumstances specified in the
application, purchasers will be required
to purchase Creation Units by
depositing specified instruments
(‘‘Deposit Instruments’’), and
shareholders redeeming their shares
will receive specified instruments
(‘‘Redemption Instruments’’). The
Deposit Instruments and the
Redemption Instruments will each
correspond pro rata to the positions in
the Fund’s portfolio (including cash
positions) except as specified in the
application.
4. Because shares will not be
individually redeemable, applicants
request an exemption from section
5(a)(1) and section 2(a)(32) of the Act
that would permit the Funds to register
as open-end management investment
companies and issue shares that are
redeemable in Creation Units only.
5. Applicants also request an
exemption from section 22(d) of the Act
and rule 22c–1 under the Act as
secondary market trading in shares will
take place at negotiated prices, not at a
current offering price described in a
Fund’s prospectus, and not at a price
based on NAV. Applicants state that (a)
secondary market trading in shares does
not involve a Fund as a party and will
not result in dilution of an investment
in shares, and (b) to the extent different
prices exist during a given trading day,
or from day to day, such variances occur
as a result of third-party market forces,
such as supply and demand. Therefore,
applicants assert that secondary market
transactions in shares will not lead to
discrimination or preferential treatment
among purchasers. Finally, applicants
represent that share market prices will
be disciplined by arbitrage
opportunities, which should prevent
shares from trading at a material
discount or premium from NAV.
6. With respect to Funds that effect
creations and redemptions of Creation
Units in kind and that are based on
certain Underlying Indexes that include
foreign securities, applicants request
relief from the requirement imposed by
section 22(e) in order to allow such
Funds to pay redemption proceeds
within fifteen calendar days following
the tender of Creation Units for
redemption. Applicants assert that the
requested relief would not be
inconsistent with the spirit and intent of
Funds to maintain full portfolio transparency will
help address, together with other protections,
conflicts of interest with respect to such Funds.
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Federal Register / Vol. 81, No. 198 / Thursday, October 13, 2016 / Notices
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section 22(e) to prevent unreasonable,
undisclosed or unforeseen delays in the
actual payment of redemption proceeds.
7. Applicants request an exemption to
permit Funds of Funds to acquire Fund
shares beyond the limits of section
12(d)(1)(A) of the Act; and the Funds,
and any principal underwriter for the
Funds, and/or any broker or dealer
registered under the Exchange Act, to
sell shares to Funds of Funds beyond
the limits of section 12(d)(1)(B) of the
Act. The application’s terms and
conditions are designed to, among other
things, help prevent any potential (i)
undue influence over a Fund through
control or voting power, or in
connection with certain services,
transactions, and underwritings, (ii)
excessive layering of fees, and (iii)
overly complex fund structures, which
are the concerns underlying the limits
in sections 12(d)(1)(A) and (B) of the
Act.
8. Applicants request an exemption
from sections 17(a)(1) and 17(a)(2) of the
Act to permit persons that are Affiliated
Persons, or Second-Tier Affiliates, of the
Funds, solely by virtue of certain
ownership interests, to effectuate
purchases and redemptions in-kind. The
deposit procedures for in-kind
purchases of Creation Units and the
redemption procedures for in-kind
redemptions of Creation Units will be
the same for all purchases and
redemptions and Deposit Instruments
and Redemption Instruments will be
valued in the same manner as those
investment positions currently held by
the Funds. Applicants also seek relief
from the prohibitions on affiliated
transactions in section 17(a) to permit a
Fund to sell its shares to and redeem its
shares from a Fund of Funds, and to
engage in the accompanying in-kind
transactions with the Fund of Funds.3
The purchase of Creation Units by a
Fund of Funds directly from a Fund will
be accomplished in accordance with the
policies of the Fund of Funds and will
be based on the NAVs of the Funds.
9. Applicants also request relief to
permit a Feeder Fund to acquire shares
of another registered investment
company managed by the Adviser
having substantially the same
investment objectives as the Feeder
Fund (‘‘Master Fund’’) beyond the
3 The requested relief would apply to direct sales
of shares in Creation Units by a Fund to a Fund of
Funds and redemptions of those shares. Applicants,
moreover, are not seeking relief from section 17(a)
for, and the requested relief will not apply to,
transactions where a Fund could be deemed an
Affiliated Person, or a Second-Tier Affiliate, of a
Fund of Funds because an Adviser or an entity
controlling, controlled by or under common control
with an Adviser provides investment advisory
services to that Fund of Funds.
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limitations in section 12(d)(1)(A) and
permit the Master Fund, and any
principal underwriter for the Master
Fund, to sell shares of the Master Fund
to the Feeder Fund beyond the
limitations in section 12(d)(1)(B).
10. Section 6(c) of the Act permits the
Commission to exempt any persons or
transactions from any provision of the
Act if such exemption is necessary or
appropriate in the public interest and
consistent with the protection of
investors and the purposes fairly
intended by the policy and provisions of
the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may
exempt any person, security, or
transaction, or any class or classes of
persons, securities, or transactions, from
any provision of section 12(d)(1) if the
exemption is consistent with the public
interest and the protection of investors.
Section 17(b) of the Act authorizes the
Commission to grant an order
permitting a transaction otherwise
prohibited by section 17(a) if it finds
that (a) the terms of the proposed
transaction are fair and reasonable and
do not involve overreaching on the part
of any person concerned; (b) the
proposed transaction is consistent with
the policies of each registered
investment company involved; and (c)
the proposed transaction is consistent
with the general purposes of the Act.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016–24708 Filed 10–12–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79069; File No. SR–
BatsBZX–2016–26]
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Order Granting
Approval of Proposed Rule Change, as
Modified by Amendment No. 1, To
Amend BZX Rule 14.11(d) To Add the
EURO STOXX 50 Volatility Futures to
the Definition of Futures Reference
Asset
October 7, 2016.
I. Introduction
On June 23, 2016, Bats BZX Exchange,
Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
1 15
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19b–4 thereunder,2 a proposed rule
change to amend BZX Rule 14.11(d) in
order to add the EURO STOXX 50
Volatility (‘‘VSTOXX’’) Futures
(‘‘VSTOXX Futures’’) to the definition of
Futures Reference Asset. The proposed
rule change was published for comment
in the Federal Register on July 12,
2016.3 On August 23, 2016, pursuant to
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 On September
30, 2016, the Exchange filed
Amendment No. 1 to the proposed rule
change.6 The Commission received no
comments on the proposed rule change.
This order grants approval of the
proposed rule change, as modified by
Amendment No. 1.
II. Exchange’s Description of the
Proposal
The Exchange proposes to amend
BZX Rule 14.11(d) to add VSTOXX
Futures to the definition of Futures
Reference Asset.7 By adding VSTOXX
Futures to the definition of Futures
Reference Asset, the Exchange would be
permitted to generically list and trade
Futures-Linked Securities linked to
2 17
CFR 240.19b–4.
Securities Exchange Act Release No. 78236
(Jul. 6, 2016), 81 FR 45185 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 78640,
81 FR 59257 (Aug. 29, 2016).
6 In Amendment No. 1, the Exchange: (a) Clarified
that an issuer would be required to represent to the
Exchange that it will advise the Exchange of any
failure of Futures-Linked Securities to comply with
the continued listing requirements; (b) provided
additional information regarding the comparability
of the VSTOXX Futures and the CBOE Volatility
Index (‘‘VIX’’) Futures currently included in the
definition of Futures Reference Asset; (c) included
additional background regarding the EURO STOXX
50 Index; (d) clarified that VSTOXX levels will be
calculated by STOXX (as defined herein) and
disseminated by major market data vendors such as
Bloomberg and Thomson Reuters on a real-time
basis throughout each trading day; and (e) made
other grammatical corrections and typographical
edits. Because the changes in Amendment No. 1
clarify certain statements in the proposal and do not
materially alter the substance of the proposed rule
change or raise any novel regulatory issues, it is not
subject to notice and comment. Amendment No. 1,
which amended and replaced the proposed rule
change in its entirety, is available on the
Commission’s Web site at: https://www.sec.gov/
comments/sr-batsbzx-2016-26/batsbzx201626-1.pdf.
7 As defined in BZX Rule 14.11(d), ‘‘Futures
Reference Asset’’ currently includes an index of (a)
futures on Treasury Securities, GSE Securities,
supranational debt and debt of a foreign country or
a subdivision thereof, or options or other
derivatives on any of the foregoing; or (b) interest
rate futures or options or derivatives on the
foregoing in this subparagraph (b); or (c) CBOE
Volatility Index (VIX) Futures.
3 See
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]]>Agencies
[Federal Register Volume 81, Number 198 (Thursday, October 13, 2016)]
[Notices]
[Pages 70712-70714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24708]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32307; 812-14592]
Hartford Funds Exchange-Traded Trust, et al.; Notice of
Application
October 6, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1
under the Act, under sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under
section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and
12(d)(1)(B) of the Act. The requested order would permit (a) index-
based series of certain open-end management investment companies
(``Funds'') to issue shares redeemable in large aggregations only
[[Page 70713]]
(``Creation Units''); (b) secondary market transactions in Fund shares
to occur at negotiated market prices rather than at net asset value
(``NAV''); (c) certain Funds to pay redemption proceeds, under certain
circumstances, more than seven days after the tender of shares for
redemption; (d) certain affiliated persons of a Fund to deposit
securities into, and receive securities from, the Fund in connection
with the purchase and redemption of Creation Units; (e) certain
registered management investment companies and unit investment trusts
outside of the same group of investment companies as the Funds (``Funds
of Funds'') to acquire shares of the Funds; and (f) certain Funds
(``Feeder Funds'') to create and redeem Creation Units in-kind in a
master-feeder structure.
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Applicants: Hartford Funds Exchange-Traded Trust (the ``Trust''), a
Delaware statutory trust that will be registered under the Act as an
open-end management investment company with multiple series, Hartford
Funds Management Company, LLC (the ``Initial Adviser''), a Delaware
limited liability company registered as an investment adviser under the
Investment Advisers Act of 1940, and Hartford Funds Distributor, a
broker-dealer registered under the Securities Exchange Act of 1934
(``Exchange Act'').
Filing Dates: The application was filed on December 15, 2015, and
amended on June 9, 2016.
Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on October 31, 2016, and should be accompanied by proof of
service on applicants, in the form of an affidavit, or for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicants: Edward P.
Macdonald, Esq., 5 Radnor Corporate Center, 100 Matsonford Road, Suite
300, Radnor, PA 19087.
For Further Information Contact: Michael S. Didiuk, Senior Counsel, at
(202) 551-8639, or Holly Hunter-Ceci, Branch Chief, at (202) 551-6825
(Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at https://www.sec.gov/search/search.htm or by calling (202) 551-8090.
Summary of the Application
1. Applicants request an order that would allow Funds to operate as
index exchange traded funds (``ETFs'').\1\ Fund shares will be
purchased and redeemed at their NAV in Creation Units only. All orders
to purchase Creation Units and all redemption requests will be placed
by or through an ``Authorized Participant'', which will have signed a
participant agreement with a broker-dealer registered under the
Exchange Act (together with any future distributor, the
``Distributor''). Shares will be listed and traded individually on a
national securities exchange, where share prices will be based on the
current bid/offer market. Certain Funds may operate as Feeder Funds in
a master-feeder structure. Any order granting the requested relief
would be subject to the terms and conditions stated in the application.
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\1\ Applicants request that the order apply to the Trust's
initial index-based ETF series, as well as any additional series of
the Trust, and any other open-end management investment company or
existing or future series thereof that may be created in the future
(each, included in the term ``Fund''), each of which will operate as
an ETF and will track a specified index comprised of domestic or
foreign equity and/or fixed income securities (each, an ``Underlying
Index''). Any Fund will (a) be advised by the Initial Adviser or an
entity controlling, controlled by, or under common control with the
Initial Adviser (each, an ``Adviser'') and (b) comply with the terms
and conditions of the application.
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2. Each Fund will hold investment positions selected to correspond
generally to the performance of an Underlying Index. In the case of
Self-Indexing Funds, an affiliated person, as defined in section
2(a)(3) of the Act (``Affiliated Person''), or an affiliated person of
an Affiliated Person (``Second-Tier Affiliate''), of the Trust or a
Fund, of the Adviser, of any sub-adviser to or promoter of a Fund, or
of the Distributor will compile, create, sponsor or maintain the
Underlying Index.\2\
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\2\ Each Self-Indexing Fund will post on its Web site the
identities and quantities of the investment positions that will form
the basis for the Fund's calculation of its NAV at the end of the
day. Applicants believe that requiring Self-Indexing Funds to
maintain full portfolio transparency will help address, together
with other protections, conflicts of interest with respect to such
Funds.
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3. Shares will be purchased and redeemed in Creation Units and
generally on an in-kind basis. Except where the purchase or redemption
will include cash under the limited circumstances specified in the
application, purchasers will be required to purchase Creation Units by
depositing specified instruments (``Deposit Instruments''), and
shareholders redeeming their shares will receive specified instruments
(``Redemption Instruments''). The Deposit Instruments and the
Redemption Instruments will each correspond pro rata to the positions
in the Fund's portfolio (including cash positions) except as specified
in the application.
4. Because shares will not be individually redeemable, applicants
request an exemption from section 5(a)(1) and section 2(a)(32) of the
Act that would permit the Funds to register as open-end management
investment companies and issue shares that are redeemable in Creation
Units only.
5. Applicants also request an exemption from section 22(d) of the
Act and rule 22c-1 under the Act as secondary market trading in shares
will take place at negotiated prices, not at a current offering price
described in a Fund's prospectus, and not at a price based on NAV.
Applicants state that (a) secondary market trading in shares does not
involve a Fund as a party and will not result in dilution of an
investment in shares, and (b) to the extent different prices exist
during a given trading day, or from day to day, such variances occur as
a result of third-party market forces, such as supply and demand.
Therefore, applicants assert that secondary market transactions in
shares will not lead to discrimination or preferential treatment among
purchasers. Finally, applicants represent that share market prices will
be disciplined by arbitrage opportunities, which should prevent shares
from trading at a material discount or premium from NAV.
6. With respect to Funds that effect creations and redemptions of
Creation Units in kind and that are based on certain Underlying Indexes
that include foreign securities, applicants request relief from the
requirement imposed by section 22(e) in order to allow such Funds to
pay redemption proceeds within fifteen calendar days following the
tender of Creation Units for redemption. Applicants assert that the
requested relief would not be inconsistent with the spirit and intent
of
[[Page 70714]]
section 22(e) to prevent unreasonable, undisclosed or unforeseen delays
in the actual payment of redemption proceeds.
7. Applicants request an exemption to permit Funds of Funds to
acquire Fund shares beyond the limits of section 12(d)(1)(A) of the
Act; and the Funds, and any principal underwriter for the Funds, and/or
any broker or dealer registered under the Exchange Act, to sell shares
to Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act.
The application's terms and conditions are designed to, among other
things, help prevent any potential (i) undue influence over a Fund
through control or voting power, or in connection with certain
services, transactions, and underwritings, (ii) excessive layering of
fees, and (iii) overly complex fund structures, which are the concerns
underlying the limits in sections 12(d)(1)(A) and (B) of the Act.
8. Applicants request an exemption from sections 17(a)(1) and
17(a)(2) of the Act to permit persons that are Affiliated Persons, or
Second-Tier Affiliates, of the Funds, solely by virtue of certain
ownership interests, to effectuate purchases and redemptions in-kind.
The deposit procedures for in-kind purchases of Creation Units and the
redemption procedures for in-kind redemptions of Creation Units will be
the same for all purchases and redemptions and Deposit Instruments and
Redemption Instruments will be valued in the same manner as those
investment positions currently held by the Funds. Applicants also seek
relief from the prohibitions on affiliated transactions in section
17(a) to permit a Fund to sell its shares to and redeem its shares from
a Fund of Funds, and to engage in the accompanying in-kind transactions
with the Fund of Funds.\3\ The purchase of Creation Units by a Fund of
Funds directly from a Fund will be accomplished in accordance with the
policies of the Fund of Funds and will be based on the NAVs of the
Funds.
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\3\ The requested relief would apply to direct sales of shares
in Creation Units by a Fund to a Fund of Funds and redemptions of
those shares. Applicants, moreover, are not seeking relief from
section 17(a) for, and the requested relief will not apply to,
transactions where a Fund could be deemed an Affiliated Person, or a
Second-Tier Affiliate, of a Fund of Funds because an Adviser or an
entity controlling, controlled by or under common control with an
Adviser provides investment advisory services to that Fund of Funds.
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9. Applicants also request relief to permit a Feeder Fund to
acquire shares of another registered investment company managed by the
Adviser having substantially the same investment objectives as the
Feeder Fund (``Master Fund'') beyond the limitations in section
12(d)(1)(A) and permit the Master Fund, and any principal underwriter
for the Master Fund, to sell shares of the Master Fund to the Feeder
Fund beyond the limitations in section 12(d)(1)(B).
10. Section 6(c) of the Act permits the Commission to exempt any
persons or transactions from any provision of the Act if such exemption
is necessary or appropriate in the public interest and consistent with
the protection of investors and the purposes fairly intended by the
policy and provisions of the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may exempt any person, security, or
transaction, or any class or classes of persons, securities, or
transactions, from any provision of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.
Section 17(b) of the Act authorizes the Commission to grant an order
permitting a transaction otherwise prohibited by section 17(a) if it
finds that (a) the terms of the proposed transaction are fair and
reasonable and do not involve overreaching on the part of any person
concerned; (b) the proposed transaction is consistent with the policies
of each registered investment company involved; and (c) the proposed
transaction is consistent with the general purposes of the Act.
For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016-24708 Filed 10-12-16; 8:45 am]
BILLING CODE 8011-01-P
