First Investors Equity Funds, et al.; Notice of Application, 72629-72630 [2016-25346]
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Federal Register / Vol. 81, No. 203 / Thursday, October 20, 2016 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–25350 Filed 10–19–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32318; File No. 812–14594]
First Investors Equity Funds, et al.;
Notice of Application
October 14, 2016.
AGENCY:
mstockstill on DSK3G9T082PROD with NOTICES
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order pursuant to: (a) Section 6(c) of the
Investment Company Act of 1940
(‘‘Act’’) granting an exemption from
sections 18(f) and 21(b) of the Act; (b)
section 12(d)(1)(J) of the Act granting an
exemption from section 12(d)(1) of the
Act; (c) sections 6(c) and 17(b) of the
Act granting an exemption from sections
17(a)(1), 17(a)(2) and 17(a)(3) of the Act;
and (d) section 17(d) of the Act and rule
17d–1 under the Act to permit certain
joint arrangements and transactions.
Applicants request an order that would
permit certain registered open-end
management investment companies to
participate in a joint lending and
borrowing facility.
November 8, 2016 and should be
accompanied by proof of service on the
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, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090;
Applicants: Mary Carty, Esq., Foresters
Investment Management Company, Inc.,
40 Wall Street, New York, NY 10005.
FOR FURTHER INFORMATION CONTACT: KayMario Vobis, Senior Counsel, at (202)
551–6728 or Mary Kay Frech, Branch
Chief, at (202) 551–6821 (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 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 permit the applicants to
participate in an interfund lending
APPLICANTS: First Investors Equity
facility where each Fund could lend
Funds, First Investors Income Funds,
money directly to and borrow money
First Investors Life Series Funds and
directly from other Funds to cover
First Investors Tax Exempt Funds (each unanticipated cash shortfalls, such as
a ‘‘Trust’’), each a Delaware statutory
unanticipated redemptions or trade
trust registered under the Act as an
fails.1 The Funds will not borrow under
open-end management investment
the facility for leverage purposes and
company with multiple series and
the loans’ duration will be no more than
Foresters Investment Management
7 days.2
Company, Inc. (the ‘‘Adviser’’), a New
2. Applicants anticipate that the
York corporation registered as an
proposed facility would provide a
investment adviser under the
borrowing Fund with a source of
Investment Advisers Act of 1940.
liquidity at a rate lower than the bank
DATES: Filing Dates: The application was borrowing rate at times when the cash
filed on December 23, 2015 and
position of the Fund is insufficient to
amended on May 20, 2016 and
1 Applicants request that the order apply to the
September 16, 2016.
applicants and to any existing or future registered
HEARING OR NOTIFICATION OF HEARING:
open-end management investment company or
An order granting the requested relief
series thereof for which the Adviser or any
will be issued unless the Commission
successor thereto or an investment adviser
orders a hearing. Interested persons may controlling, controlled by, or under common
control with the Adviser or any successor thereto
request a hearing by writing to the
serves as investment adviser (each a ‘‘Fund’’ and
Commission’s Secretary and serving
collectively the ‘‘Funds’’ and each such investment
applicants with a copy of the request,
adviser an ‘‘Adviser’’). For purposes of the
requested order, ‘‘successor’’ is limited to any entity
personally or by mail.
that results from a reorganization into another
Hearing requests should be received
jurisdiction or a change in the type of a business
by the Commission by 5:30 p.m. on
organization.
34 17
CFR 200.30–3(a)(57) and (58).
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16:40 Oct 19, 2016
Jkt 241001
2 Any Fund, however, will be able to call a loan
on one business day’s notice.
PO 00000
Frm 00068
Fmt 4703
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72629
meet temporary cash requirements. In
addition, Funds making short-term cash
loans directly to other Funds would
earn interest at a rate higher than they
otherwise could obtain from investing
their cash in repurchase agreements or
certain other short term money market
instruments. Thus, applicants assert that
the facility would benefit both
borrowing and lending Funds.
3. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the application. Among others,
the Adviser, through a designated
committee, would administer the
facility as a disinterested fiduciary as
part of its duties under the investment
management agreements with the Funds
and would receive no additional fee as
compensation for its services in
connection with the administration of
the facility. The facility would be
subject to oversight and certain
approvals by the Funds’ Board,
including, among others, approval of the
interest rate formula and of the method
for allocating loans across Funds, as
well as review of the process in place to
evaluate the liquidity implications for
the Funds. A Fund’s aggregate
outstanding interfund loans will not
exceed 15% of its net assets, and the
Fund’s loans to any one Fund will not
exceed 5% of the lending Fund’s net
assets.3
4. Applicants assert that the facility
does not raise the concerns underlying
section 12(d)(1) of the Act given that the
Funds are part of the same group of
investment companies and there will be
no duplicative costs or fees to the
Funds.4 Applicants also assert that the
proposed transactions do not raise the
concerns underlying sections 17(a)(1),
17(a)(3), 17(d) and 21(b) of the Act as
the Funds would not engage in lending
transactions that unfairly benefit
insiders or are detrimental to the Funds.
Applicants state that the facility will
offer both reduced borrowing costs and
enhanced returns on loaned funds to all
participating Funds and each Fund
would have an equal opportunity to
borrow and lend on equal terms based
on an interest rate formula that is
objective and verifiable. With respect to
the relief from section 17(a)(2) of the
Act, applicants note that any collateral
pledged to secure an interfund loan
would be subject to the same conditions
imposed by any other lender to a Fund
3 Under certain circumstances, a borrowing Fund
will be required to pledge collateral to secure the
loan.
4 Applicants state that the obligation to repay an
interfund loan could be deemed to constitute a
security for the purposes of sections 17(a)(1) and
12(d)(1) of the Act.
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72630
Federal Register / Vol. 81, No. 203 / Thursday, October 20, 2016 / Notices
that imposes conditions on the quality
of or access to collateral for a borrowing
(if the lender is another Fund) or the
same or better conditions (in any other
circumstance).5
5. Applicants also believe that the
limited relief from section 18(f)(1) of the
Act that is necessary to implement the
facility (because the lending Funds are
not banks) is appropriate in light of the
conditions and safeguards described in
the application and because the Funds
would remain subject to the
requirement of section 18(f)(1) that all
borrowings of a Fund, including
combined interfund loans and bank
borrowings, have at least 300% asset
coverage.
6. 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.
Rule 17d–1(b) under the Act provides
that in passing upon an application filed
under the rule, the Commission will
consider whether the participation of
the registered investment company in a
joint enterprise, joint arrangement or
profit sharing plan on the basis
proposed is consistent with the
provisions, policies and purposes of the
Act and the extent to which such
participation is on a basis different from
or less advantageous than that of the
other participants.
5 Applicants state that any pledge of securities to
secure an interfund loan could constitute a
purchase of securities for purposes of section
17(a)(2) of the Act.
VerDate Sep<11>2014
16:40 Oct 19, 2016
Jkt 241001
For the Commission, by the Division of
Investment Management, under delegated
authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016–25346 Filed 10–19–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to list and
trade shares (‘‘Shares’’) of the Virtus
Self-Regulatory Organizations; NYSE
Enhanced U.S. Equity ETF (‘‘Fund’’)
Arca, Inc.; Notice of Filing of Proposed under Commentary .01 to NYSE Arca
Rule Change Relating to Listing and
Equities Rule 5.2(j)(3), which governs
Trading of Shares of the Virtus
the listing and trading of Investment
Enhanced U.S. Equity ETF Under
Company Units on the Exchange.4 The
Commentary .01 to NYSE Arca Equities Fund will be an index-based exchange
Rule 5.2(j)(3)
traded fund (‘‘ETF’’). The Shares will be
offered by the Virtus ETF Trust II (the
October 14, 2016.
‘‘Trust’’), which is registered with the
1 of the
Pursuant to Section 19(b)(1)
Commission as an investment company
Securities Exchange Act of 1934
and has filed a registration statement on
2 and Rule 19b–4 thereunder,3
(‘‘Act’’)
Form N–1A (the ‘‘Registration
notice is hereby given that, on October
Statement’’) with the Commission on
3, 2016, NYSE Arca, Inc. (the
behalf of the Fund.5
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
The investment adviser to the Fund
the Securities and Exchange
will be Virtus ETF Advisers LLC (the
Commission (‘‘Commission’’) the
‘‘Adviser’’). ETF Distributors LLC will
proposed rule change as described in
serve as the distributor (the
Items I, II, and III below, which Items
‘‘Distributor’’) of Fund shares on an
have been prepared by the selfagency basis. The Bank of New York
regulatory organization. The
Mellon (the ‘‘Administrator’’) will be
Commission is publishing this notice to the administrator, custodian and
solicit comments on the proposed rule
transfer agent for the Fund.6
change from interested persons.
Description of the Shares and the Fund
I. Self-Regulatory Organization’s
As discussed in more detail below,
Statement of the Terms of Substance of
the Fund’s investment objective is to
the Proposed Rule Change
seek investment results that, before fees
The Exchange proposes to list and
and expenses, closely correspond to the
trade the shares of the Virtus Enhanced
price and yield performance of the
U.S. Equity ETF (the ‘‘Fund’’), a series
Rampart Enhanced U.S. Equity Index
of Virtus ETF Trust II (the ‘‘Trust’’),
(the ‘‘Index’’). The Index was developed
under Commentary .01 to NYSE Arca
by Rampart Investment Management
Equities Rule 5.2(j)(3) (‘‘Investment
Company, LLC (the ‘‘Index Provider’’),
Company Units’’). The proposed rule
and the Index is calculated and
change is available on the Exchange’s
4 NYSE Arca Equities Rule 5.2(j)(3)(A) provides
Web site at www.nyse.com, at the
that an Investment Company Unit is a security that
principal office of the Exchange, and at
represents an interest in a registered investment
the Commission’s Public Reference
company that holds securities comprising, or
Room.
otherwise based on or representing an interest in,
[Release No. 34–79101; File No. SR–
NYSEArca–2016–131]
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
an index or portfolio of securities (or holds
securities in another registered investment
company that holds securities comprising, or
otherwise based on or representing an interest in,
an index or portfolio of securities).
5 See the Trust’s registration statement on Form
N–1A, dated September 1, 2016 (File Nos. 333–
206600 and 811–23078). The descriptions of the
Fund and the Shares contained herein are based, in
part, on information in the Registration Statement.
6 The Commission has issued an order granting
certain exemptive relief to the Trust under the
Investment Company Act of 1940 (15 U.S.C. 80a–
1) (‘‘1940 Act’’). See Investment Company Act
Release No. 30825 (December 11, 2013) (File No.
812–14212) (‘‘Exemptive Order’’). Investments
made by the Fund will comply with the conditions
in the Exemptive Order.
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]]>Agencies
[Federal Register Volume 81, Number 203 (Thursday, October 20, 2016)]
[Notices]
[Pages 72629-72630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25346]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32318; File No. 812-14594]
First Investors Equity Funds, et al.; Notice of Application
October 14, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application for an order pursuant to: (a) Section
6(c) of the Investment Company Act of 1940 (``Act'') granting an
exemption from sections 18(f) and 21(b) of the Act; (b) section
12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of
the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption
from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d)
section 17(d) of the Act and rule 17d-1 under the Act to permit certain
joint arrangements and transactions. Applicants request an order that
would permit certain registered open-end management investment
companies to participate in a joint lending and borrowing facility.
-----------------------------------------------------------------------
Applicants: First Investors Equity Funds, First Investors Income Funds,
First Investors Life Series Funds and First Investors Tax Exempt Funds
(each a ``Trust''), each a Delaware statutory trust registered under
the Act as an open-end management investment company with multiple
series and Foresters Investment Management Company, Inc. (the
``Adviser''), a New York corporation registered as an investment
adviser under the Investment Advisers Act of 1940.
DATES: Filing Dates: The application was filed on December 23, 2015
and amended on May 20, 2016 and September 16, 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 November 8, 2016 and should be accompanied by proof of service on
the 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, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090; Applicants: Mary Carty, Esq.,
Foresters Investment Management Company, Inc., 40 Wall Street, New
York, NY 10005.
FOR FURTHER INFORMATION CONTACT: Kay-Mario Vobis, Senior Counsel, at
(202) 551-6728 or Mary Kay Frech, Branch Chief, at (202) 551-6821
(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 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 permit the applicants to
participate in an interfund lending facility where each Fund could lend
money directly to and borrow money directly from other Funds to cover
unanticipated cash shortfalls, such as unanticipated redemptions or
trade fails.\1\ The Funds will not borrow under the facility for
leverage purposes and the loans' duration will be no more than 7
days.\2\
---------------------------------------------------------------------------
\1\ Applicants request that the order apply to the applicants
and to any existing or future registered open-end management
investment company or series thereof for which the Adviser or any
successor thereto or an investment adviser controlling, controlled
by, or under common control with the Adviser or any successor
thereto serves as investment adviser (each a ``Fund'' and
collectively the ``Funds'' and each such investment adviser an
``Adviser''). For purposes of the requested order, ``successor'' is
limited to any entity that results from a reorganization into
another jurisdiction or a change in the type of a business
organization.
\2\ Any Fund, however, will be able to call a loan on one
business day's notice.
---------------------------------------------------------------------------
2. Applicants anticipate that the proposed facility would provide a
borrowing Fund with a source of liquidity at a rate lower than the bank
borrowing rate at times when the cash position of the Fund is
insufficient to meet temporary cash requirements. In addition, Funds
making short-term cash loans directly to other Funds would earn
interest at a rate higher than they otherwise could obtain from
investing their cash in repurchase agreements or certain other short
term money market instruments. Thus, applicants assert that the
facility would benefit both borrowing and lending Funds.
3. Applicants agree that any order granting the requested relief
will be subject to the terms and conditions stated in the application.
Among others, the Adviser, through a designated committee, would
administer the facility as a disinterested fiduciary as part of its
duties under the investment management agreements with the Funds and
would receive no additional fee as compensation for its services in
connection with the administration of the facility. The facility would
be subject to oversight and certain approvals by the Funds' Board,
including, among others, approval of the interest rate formula and of
the method for allocating loans across Funds, as well as review of the
process in place to evaluate the liquidity implications for the Funds.
A Fund's aggregate outstanding interfund loans will not exceed 15% of
its net assets, and the Fund's loans to any one Fund will not exceed 5%
of the lending Fund's net assets.\3\
---------------------------------------------------------------------------
\3\ Under certain circumstances, a borrowing Fund will be
required to pledge collateral to secure the loan.
---------------------------------------------------------------------------
4. Applicants assert that the facility does not raise the concerns
underlying section 12(d)(1) of the Act given that the Funds are part of
the same group of investment companies and there will be no duplicative
costs or fees to the Funds.\4\ Applicants also assert that the proposed
transactions do not raise the concerns underlying sections 17(a)(1),
17(a)(3), 17(d) and 21(b) of the Act as the Funds would not engage in
lending transactions that unfairly benefit insiders or are detrimental
to the Funds. Applicants state that the facility will offer both
reduced borrowing costs and enhanced returns on loaned funds to all
participating Funds and each Fund would have an equal opportunity to
borrow and lend on equal terms based on an interest rate formula that
is objective and verifiable. With respect to the relief from section
17(a)(2) of the Act, applicants note that any collateral pledged to
secure an interfund loan would be subject to the same conditions
imposed by any other lender to a Fund
[[Page 72630]]
that imposes conditions on the quality of or access to collateral for a
borrowing (if the lender is another Fund) or the same or better
conditions (in any other circumstance).\5\
---------------------------------------------------------------------------
\4\ Applicants state that the obligation to repay an interfund
loan could be deemed to constitute a security for the purposes of
sections 17(a)(1) and 12(d)(1) of the Act.
\5\ Applicants state that any pledge of securities to secure an
interfund loan could constitute a purchase of securities for
purposes of section 17(a)(2) of the Act.
---------------------------------------------------------------------------
5. Applicants also believe that the limited relief from section
18(f)(1) of the Act that is necessary to implement the facility
(because the lending Funds are not banks) is appropriate in light of
the conditions and safeguards described in the application and because
the Funds would remain subject to the requirement of section 18(f)(1)
that all borrowings of a Fund, including combined interfund loans and
bank borrowings, have at least 300% asset coverage.
6. 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. Rule
17d-1(b) under the Act provides that in passing upon an application
filed under the rule, the Commission will consider whether the
participation of the registered investment company in a joint
enterprise, joint arrangement or profit sharing plan on the basis
proposed is consistent with the provisions, policies and purposes of
the Act and the extent to which such participation is on a basis
different from or less advantageous than that of the other
participants.
For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016-25346 Filed 10-19-16; 8:45 am]
BILLING CODE 8011-01-P
