Advent/Claymore Enhanced Growth & Income Fund, 15091-15093 [2017-05850]
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jstallworth on DSK7TPTVN1PROD with NOTICES
Federal Register / Vol. 82, No. 56 / Friday, March 24, 2017 / Notices
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
Schedule 14A under the Securities
Exchange Act of 1934, and Sections 6–
07(2)(a), (b), and (c) of Regulation S–X
(‘‘Disclosure Requirements’’). The
requested exemption would permit an
investment adviser to hire and replace
certain sub-advisers without
shareholder approval and grant relief
from the Disclosure Requirements as
they relate to fees paid to the subadvisers.
APPLICANTS: Investment Managers
Series Trust II (the ‘‘Trust’’), a Delaware
statutory trust registered under the Act
as an open-end management investment
company with multiple series, and
Vivaldi Asset Management, LLC, a
Delaware limited liability company
registered as an investment adviser
under the Investment Advisers Act of
1940 (the ‘‘Adviser,’’ and, collectively
with the Trust, the ‘‘Applicants’’).
FILING DATES: The application was filed
on October 21, 2016, and amended on
March 2, 2017.
HEARING OR NOTIFICATION OF HEARING:
An order granting the application 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 April 14, 2017, 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: Trust: 235 West Galena
Street, Milwaukee, WI 53212, and
Adviser: 225 West Wacker, Suite 2100,
Chicago, IL 60606.
FOR FURTHER INFORMATION CONTACT:
Courtney S. Thornton, Senior Counsel,
at (202) 551–6812, or Daniele
Marchesani, Assistant Chief Counsel, 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
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13:56 Mar 23, 2017
Jkt 241001
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Summary of the Application
1. The Adviser serves as the
investment adviser to the Subadvised
Series pursuant to an investment
advisory agreement with the Trust (the
‘‘Investment Management
Agreement’’).1 The Adviser will provide
the Subabvised Series with continuous
and comprehensive investment
management services subject to the
supervision of, and policies established
by, the Subabvised Series’ board of
trustees (‘‘Board’’).2 The Investment
Management Agreement permits the
Adviser, subject to the approval of the
Board, to delegate to one or more subadvisers (each, a ‘‘Sub-Adviser’’) the
responsibility to provide the day-to-day
portfolio investment management of the
Subabvised Series, subject to the
supervision and direction of the
Adviser. The primary responsibility for
managing the Subabvised Series will
remain vested in the Adviser. The
Adviser will hire, evaluate, allocate
assets to and oversee the Sub-Advisers,
including determining whether a SubAdviser should be terminated, at all
times subject to the authority of the
Board.
2. Applicants request an exemption to
permit the Adviser, subject to Board
approval, to hire certain Sub-Advisers
pursuant to sub-advisory agreements
and materially amend existing subadvisory agreements without obtaining
the shareholder approval required under
Section 15(a) of the Act and Rule 18f2 under the Act.3 Applicants also seek
an exemption from the Disclosure
Requirements to permit a Subabvised
Series to disclose (as both a dollar
1 The initial Subadvised Series is the Vivaldi
Multi-Strategy Fund. Applicants request relief with
respect to the named Applicants, as well as to any
future series of the Trust and any other existing or
future registered open-end management company or
series thereof that: (a) Is advised by the Adviser; (b)
uses the manager of managers structure described
in the application; and (c) complies with the terms
and conditions of the application (collectively with
the initial Subadvised Series, the ‘‘Subadvised
Series’’). The term ‘‘Adviser’’ includes (i) the
Adviser, (ii) its successors, and (iii) any entity
controlling, controlled by, or under common
control with, the Adviser or its successors. For
purposes of the requested order, ‘‘successor’’ is
limited to an entity resulting from a reorganization
into another jurisdiction or a change in the type of
business organization.
2 The term ‘‘Board’’ includes the board of trustees
or directors of a future Subadvised Series, if
different.
3 The requested relief will not extend to any subadviser that is an affiliated person, as defined in
Section 2(a)(3) of the Act, of a Subadvised Series
or the Adviser, other than by reason of serving as
a sub-adviser to one or more of the Subadvised
Series (‘‘Affiliated Sub-Adviser’’).
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15091
amount and a percentage of the
Subadvised Series’ net assets): (a) The
aggregate fees paid to the Adviser; and
(b) the aggregate fees paid to SubAdvisers; and (c) the fee paid to each
Affiliated Sub-Adviser (collectively,
‘‘Aggregate Fee Disclosure’’).
3. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the Application. Such terms
and conditions provide for, among other
safeguards, appropriate disclosure to
Subadvised Series shareholders and
notification about sub-advisory changes
and enhanced Board oversight to protect
the interests of the Subadvised Series’
shareholders.
4. Section 6(c) 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 provisions of the
Act, or any rule thereunder, if such
relief is necessary or appropriate in the
public interest and consistent with the
protection of investors and purposes
fairly intended by the policy and
provisions of the Act. Applicants
believe that the requested relief meets
this standard because, as further
explained in the application, the
Investment Management Agreement will
remain subject to shareholder approval,
while the role of the Sub-Advisers is
substantially similar to that of
individual portfolio managers, so that
requiring shareholder approval of SubAdvisory Agreements would impose
unnecessary delays and expenses on the
Subadvised Series. Applicants believe
that the requested relief from the
Disclosure Requirements meets this
standard because it will improve the
Adviser’s ability to negotiate fees paid
to the Sub-Advisers that are more
advantageous for the Subadvised Series.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–05849 Filed 3–23–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32537; 812–14686]
Advent/Claymore Enhanced Growth &
Income Fund
March 20, 2017.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
E:\FR\FM\24MRN1.SGM
24MRN1
15092
Federal Register / Vol. 82, No. 56 / Friday, March 24, 2017 / Notices
Notice of application for an order
under section 17(b) of the Investment
Company Act of 1940 (the ‘‘Act’’) for an
exemption from section 17(a) of the Act.
SUMMARY OF APPLICATION: Applicant
seeks an order that would permit inkind repurchases of shares of the Fund
held by certain affiliated shareholders of
the Fund.
APPLICANT: Advent/Claymore Enhanced
Growth & Income Fund (the ‘‘Fund’’).
FILING DATES: The application was filed
on August 10, 2016, and amended on
December 19, 2016, March 10, 2017 and
March 15, 2017. Applicants have agreed
to file an amendment during the notice
period, the substance of which is
reflected in this notice.
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
applicant with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on April 14, 2017, and
should be accompanied by proof of
service on applicant, 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.
Applicant, 1271 Avenue of the
Americas, 45th Floor, New York, NY
10020.
FOR FURTHER INFORMATION CONTACT:
jstallworth on DSK7TPTVN1PROD with NOTICES
Robert Shapiro, Branch Chief, at (202)
551–6821 (Chief Counsel’s Office,
Division of Investment Management).
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.
Applicant’s Representations
1. The Fund is Delaware statutory
trust registered as a closed-end
management investment company
under the Act. The Fund’s investment
objective is to seek current income and
current gains from trading in securities,
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13:56 Mar 23, 2017
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with a secondary objective of long-term
capital appreciation. The Fund states
that, under normal market conditions, it
invests at least 40% of its Managed
Assets 1 in a portfolio of equity
securities and convertible securities of
U.S. and non-U.S. issuers, and may
invest up to 60% of its Managed Assets
in non-convertible high-yield
securities.2 Shares of the Fund are listed
and trade on the New York Stock
Exchange. Guggenheim Funds
Investment Advisors, LLC (‘‘GFIA’’), an
investment adviser registered under the
Investment Advisers Act of 1940 (the
‘‘Advisers Act’’), serves as investment
adviser to the Fund. Advent Capital
Management, LLC (‘‘Advent’’), an
investment adviser registered under the
Advisers Act, serves as the investment
manager to the Fund.
2. The Fund proposes to conduct a
tender offer for up to 32.5% of its
outstanding shares at a price equal to
98% of net asset value per share
(‘‘NAV’’) as of the business day
immediately after the day such tender
offer expires (the ‘‘In-Kind Repurchase
Offer’’). Payment for any shares
repurchased during the In-Kind
Repurchase Offer would be made inkind through a pro rata distribution of
the Fund’s Distributable Securities (as
defined below). The In-Kind Repurchase
Offer will be made pursuant to section
23(c)(2) of the Act and conducted in
accordance with rule 13e–4 under the
Securities Exchange Act of 1934.
3. Applicant states that the pro rata
distribution of the Fund’s portfolio
securities would not include: (i)
Securities that, if distributed, would be
required to be registered under the
Securities Act of 1933 (the ‘‘1933 Act’’);
(ii) securities issued by entities in
countries that restrict or prohibit the
holdings of securities by non-residents
other than through qualified investment
vehicles, or whose distribution would
otherwise be contrary to applicable local
laws, rules or regulations; (iii) certain
portfolio assets, such as derivative
instruments or repurchase agreements,
that involve the assumption of
contractual obligations, require special
trading facilities, or can only be traded
with the counterparty to the transaction;
and (iv) portfolio securities held by the
Fund which are not eligible for
1 ‘‘Managed Assets’’ means the total assets of the
Fund (including any assets attributable to the use
of financial leverage, if any) minus the sum of
accrued liabilities (other than debt representing
financial leverage, if any).
2 Applicant states that, as of January 31, 2017, its
portfolio consisted of the following investments (as
a percentage of Managed Assets): 52.3% convertible
bonds; 26.0% corporate bonds; 8.4% cash and cash
equivalents; 6.5% common stocks; 6.3% convertible
preferred stocks; 0.5% senior floating rate interests.
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clearance and trade settlement through
the Depository Trust Company (‘‘DTC’’).
Applicant’s portfolio securities eligible
to be distributed in the In-Kind
Repurchase Offer, excluding securities
set forth in clauses (i)–(iv) above, are
referred to as ‘‘Distributable Securities.’’
Applicant represents that, as of January
31, 2017, approximately 65% of its
Managed Assets were Distributable
Securities.
4. Applicant states that the In-Kind
Repurchase Offer is designed to
accommodate the needs of shareholders
who wish to participate in the In-Kind
Repurchase Offer and long-term
shareholders who would prefer to
remain invested in a closed-end
investment vehicle. Applicant further
states that, under the In-Kind
Repurchase Offer, the Fund will not
have to incur substantial brokerage
commissions and other and legal costs
that would be incurred in a cash tender
offer. Applicant also states that the InKind Repurchase Offer will minimize
disruption to the investment
management of Fund, while providing
enhanced liquidity for the Fund’s
shareholders.
5. Applicant requests relief to permit
any common shareholders of the Fund
who are ‘‘affiliated persons’’ of the Fund
within the meaning of section 2(a)(3) of
the Act solely by reason of owning,
controlling, or holding with the power
to vote, 5% or more of the Fund’s
outstanding voting securities (each, an
‘‘Affiliated Shareholder’’) to participate
in the proposed In-Kind Repurchase
Offer.
Applicant’s Legal Analysis
1. Section 17(a) of the Act prohibits
an affiliated person of a registered
investment company, or any affiliated
person of the person, acting as
principal, from knowingly purchasing
or selling any security or other property
from or to the company. Section 2(a)(3)
of the Act defines an ‘‘affiliated person’’
of another person to include any person
who directly or indirectly owns,
controls, or holds with power to vote
5% or more of the outstanding voting
securities of the other person. Applicant
states that to the extent that the In-Kind
Repurchase Offer could be deemed the
purchase or sale of securities by an
Affiliated Shareholder, the transactions
would be prohibited by section 17(a).
Accordingly, applicant requests an
exemption from section 17(a) of the Act
to the extent necessary to permit the
participation of Affiliated Shareholders
in the In-Kind Repurchase Offer.
2. Section 17(b) of the Act authorizes
the Commission to exempt any
transaction from the provisions of
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Federal Register / Vol. 82, No. 56 / Friday, March 24, 2017 / Notices
jstallworth on DSK7TPTVN1PROD with NOTICES
section 17(a) if the terms of the
transaction, including the consideration
to be paid or received, are reasonable
and fair and do not involve
overreaching on the part of any person
concerned, and the transaction is
consistent with the policy of each
registered investment company and
with the general purposes of the Act.
3. Applicant asserts that the terms of
the In-Kind Repurchase Offer meet the
requirements of sections 17(b) of the
Act. Applicant asserts that neither the
Fund nor an Affiliated Shareholder has
any choice as to the Distributable
Securities to be received as proceeds
from the In-Kind Repurchase Offer.
Instead, each participating shareholder
will receive their pro rata portion of
each of the Fund’s Distributable
Securities. Moreover, applicant states
that the portfolio securities to be
distributed in the In-Kind Repurchase
Offer will be valued in accordance with
section 2(a)(41) of the Act, which will
be an objective, verifiable standard that
removes any discretion of an Affiliated
Shareholder, Advent or GFIA to conduct
the In-Kind Repurchase Offer at a price
that would be beneficial or detrimental
to the interests of any particular
shareholder. Applicant further states
that the In-Kind Repurchase Offer is
consistent with the Fund’s investment
policies and limitations. Applicant
represents that the In-Kind Repurchase
Offer is consistent with the general
purposes of the Act because the
interests of all shareholders are equally
protected and no Affiliated Shareholder
would receive an advantage or special
benefit not available to any other
shareholder participating in the In-Kind
Repurchase Offer.
Applicant’s Conditions
Applicant agrees that any order
granting the requested relief will be
subject to the following conditions:
1. Applicant will distribute to
shareholders participating in the InKind Repurchase Offer an in-kind pro
rata distribution of portfolio securities
of Applicant. The pro rata distribution
will not include: (a) Securities that, if
distributed, would be required to be
registered under the 1933 Act; (b)
securities issued by entities in countries
that restrict or prohibit the holdings of
securities by non-residents other than
through qualified investment vehicles,
or whose distribution would otherwise
be contrary to applicable local laws,
rules or regulations; and (c) certain
portfolio assets, such as derivative
instruments or repurchase agreements,
that involve the assumption of
contractual obligations, require special
trading facilities, or can only be traded
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13:56 Mar 23, 2017
Jkt 241001
with the counterparty to the transaction.
In addition, Applicant will exclude
from the distribution portfolio securities
held by the Fund which are not eligible
for clearance and trade settlement
through the DTC. Cash will be paid for
that portion of Applicant’s assets
represented by cash and cash
equivalents (such as certificates of
deposit, commercial paper and
repurchase agreements) and other assets
which are not readily distributable
(including receivables and prepaid
expenses), net of all liabilities
(including accounts payable). Applicant
will round down or up the aggregate
amount of each portfolio security
eligible to be distributed to ensure that
the Fund will continue to hold the
nearest round lot amount of each
portfolio security. In lieu of distributing
fractional securities (i.e. less than a full
share in the case of stocks and less than
the par amount denomination in which
a single bond trades in the case of
bonds) and accruals on portfolio
securities, Applicant will distribute a
higher pro-rata percentage of other
portfolio securities, selected by lot, to
represent such fractional securities.
With respect to any amount that cannot
be represented by a whole security,
Applicant will distribute cash in lieu of
such fractional securities. Such
proration calculations will be made in
accordance with written proration
policies and procedures that will be
approved by the Board of Trustees,
including a majority of the Independent
Trustees.
2. The securities distributed to
shareholders pursuant to the In-Kind
Repurchase Offer will be limited to
securities that are traded on a public
securities market or for which quoted
bid and asked prices are available.
3. The securities distributed to
shareholders pursuant to the In-Kind
Repurchase Offer will be valued in the
same manner as they would be valued
for purposes of computing Applicant’s
net asset value, consistent with the
requirements of section 2(a)(41) of the
Act.
4. Applicant will maintain and
preserve for a period of not less than six
years from the end of the fiscal year in
which the In-Kind Repurchase Offer
occurs, the first two years in an easily
accessible place, a written record of the
In-Kind Repurchase Offer, that includes
the identity of each shareholder of
record that participated in the In-Kind
Repurchase Offer, whether that
shareholder was an Affiliated
Shareholder, a description of each
security distributed, the terms of the
distribution, and the information or
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15093
materials upon which the valuation was
made.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–05850 Filed 3–23–17; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice: 9914]
30-Day Notice of Proposed Information
Collection: Medical Clearance Update
Notice of request for public
comment and submission to OMB of
proposed collection of information.
ACTION:
The Department of State has
submitted the information collection
described below to the Office of
Management and Budget (OMB) for
approval. In accordance with the
Paperwork Reduction Act of 1995 we
are requesting comments on this
collection from all interested
individuals and organizations. The
purpose of this Notice is to allow 30
days for public comment.
DATES: Submit comments directly to the
Office of Management and Budget
(OMB) up to April 24, 2017.
ADDRESSES: Direct comments to the
Department of State Desk Officer in the
Office of Information and Regulatory
Affairs at the Office of Management and
Budget (OMB). You may submit
comments by the following methods:
• Email: oira_submission@
omb.eop.gov. You must include the DS
form number, information collection
title, and the OMB control number in
the subject line of your message.
• Fax: 202–395–5806. Attention: Desk
Officer for Department of State.
FOR FURTHER INFORMATION CONTACT:
Direct requests for additional
information regarding the collection
listed in this notice, including requests
for copies of the proposed collection
instrument and supporting documents,
to Joan F. Grew, who may be reached on
703–875–5412 or at GrewJF@state.gov.
SUPPLEMENTARY INFORMATION: • Title of
Information Collection: Medical
Clearance Update.
• OMB Control Number: 1405–0131.
• Type of Request: Revision of a
Currently Approved Collection.
• Originating Office: Bureau of
Medical Services (MED).
• Form Number: DS–3057.
• Respondents: Foreign service
officers, federal employees, or family
members.
SUMMARY:
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]]>Agencies
[Federal Register Volume 82, Number 56 (Friday, March 24, 2017)]
[Notices]
[Pages 15091-15093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05850]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32537; 812-14686]
Advent/Claymore Enhanced Growth & Income Fund
March 20, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
-----------------------------------------------------------------------
[[Page 15092]]
Notice of application for an order under section 17(b) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
section 17(a) of the Act.
Summary of Application: Applicant seeks an order that would permit in-
kind repurchases of shares of the Fund held by certain affiliated
shareholders of the Fund.
Applicant: Advent/Claymore Enhanced Growth & Income Fund (the
``Fund'').
Filing Dates: The application was filed on August 10, 2016, and
amended on December 19, 2016, March 10, 2017 and March 15, 2017.
Applicants have agreed to file an amendment during the notice period,
the substance of which is reflected in this notice.
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 applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on April 14, 2017, and should be accompanied by proof of
service on applicant, 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. Applicant, 1271 Avenue of the
Americas, 45th Floor, New York, NY 10020.
FOR FURTHER INFORMATION CONTACT: Robert Shapiro, Branch Chief, at
(202) 551-6821 (Chief Counsel's Office, Division of Investment
Management).
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.
Applicant's Representations
1. The Fund is Delaware statutory trust registered as a closed-end
management investment company under the Act. The Fund's investment
objective is to seek current income and current gains from trading in
securities, with a secondary objective of long-term capital
appreciation. The Fund states that, under normal market conditions, it
invests at least 40% of its Managed Assets \1\ in a portfolio of equity
securities and convertible securities of U.S. and non-U.S. issuers, and
may invest up to 60% of its Managed Assets in non-convertible high-
yield securities.\2\ Shares of the Fund are listed and trade on the New
York Stock Exchange. Guggenheim Funds Investment Advisors, LLC
(``GFIA''), an investment adviser registered under the Investment
Advisers Act of 1940 (the ``Advisers Act''), serves as investment
adviser to the Fund. Advent Capital Management, LLC (``Advent''), an
investment adviser registered under the Advisers Act, serves as the
investment manager to the Fund.
---------------------------------------------------------------------------
\1\ ``Managed Assets'' means the total assets of the Fund
(including any assets attributable to the use of financial leverage,
if any) minus the sum of accrued liabilities (other than debt
representing financial leverage, if any).
\2\ Applicant states that, as of January 31, 2017, its portfolio
consisted of the following investments (as a percentage of Managed
Assets): 52.3% convertible bonds; 26.0% corporate bonds; 8.4% cash
and cash equivalents; 6.5% common stocks; 6.3% convertible preferred
stocks; 0.5% senior floating rate interests.
---------------------------------------------------------------------------
2. The Fund proposes to conduct a tender offer for up to 32.5% of
its outstanding shares at a price equal to 98% of net asset value per
share (``NAV'') as of the business day immediately after the day such
tender offer expires (the ``In-Kind Repurchase Offer''). Payment for
any shares repurchased during the In-Kind Repurchase Offer would be
made in-kind through a pro rata distribution of the Fund's
Distributable Securities (as defined below). The In-Kind Repurchase
Offer will be made pursuant to section 23(c)(2) of the Act and
conducted in accordance with rule 13e-4 under the Securities Exchange
Act of 1934.
3. Applicant states that the pro rata distribution of the Fund's
portfolio securities would not include: (i) Securities that, if
distributed, would be required to be registered under the Securities
Act of 1933 (the ``1933 Act''); (ii) securities issued by entities in
countries that restrict or prohibit the holdings of securities by non-
residents other than through qualified investment vehicles, or whose
distribution would otherwise be contrary to applicable local laws,
rules or regulations; (iii) certain portfolio assets, such as
derivative instruments or repurchase agreements, that involve the
assumption of contractual obligations, require special trading
facilities, or can only be traded with the counterparty to the
transaction; and (iv) portfolio securities held by the Fund which are
not eligible for clearance and trade settlement through the Depository
Trust Company (``DTC''). Applicant's portfolio securities eligible to
be distributed in the In-Kind Repurchase Offer, excluding securities
set forth in clauses (i)-(iv) above, are referred to as ``Distributable
Securities.'' Applicant represents that, as of January 31, 2017,
approximately 65% of its Managed Assets were Distributable Securities.
4. Applicant states that the In-Kind Repurchase Offer is designed
to accommodate the needs of shareholders who wish to participate in the
In-Kind Repurchase Offer and long-term shareholders who would prefer to
remain invested in a closed-end investment vehicle. Applicant further
states that, under the In-Kind Repurchase Offer, the Fund will not have
to incur substantial brokerage commissions and other and legal costs
that would be incurred in a cash tender offer. Applicant also states
that the In-Kind Repurchase Offer will minimize disruption to the
investment management of Fund, while providing enhanced liquidity for
the Fund's shareholders.
5. Applicant requests relief to permit any common shareholders of
the Fund who are ``affiliated persons'' of the Fund within the meaning
of section 2(a)(3) of the Act solely by reason of owning, controlling,
or holding with the power to vote, 5% or more of the Fund's outstanding
voting securities (each, an ``Affiliated Shareholder'') to participate
in the proposed In-Kind Repurchase Offer.
Applicant's Legal Analysis
1. Section 17(a) of the Act prohibits an affiliated person of a
registered investment company, or any affiliated person of the person,
acting as principal, from knowingly purchasing or selling any security
or other property from or to the company. Section 2(a)(3) of the Act
defines an ``affiliated person'' of another person to include any
person who directly or indirectly owns, controls, or holds with power
to vote 5% or more of the outstanding voting securities of the other
person. Applicant states that to the extent that the In-Kind Repurchase
Offer could be deemed the purchase or sale of securities by an
Affiliated Shareholder, the transactions would be prohibited by section
17(a). Accordingly, applicant requests an exemption from section 17(a)
of the Act to the extent necessary to permit the participation of
Affiliated Shareholders in the In-Kind Repurchase Offer.
2. Section 17(b) of the Act authorizes the Commission to exempt any
transaction from the provisions of
[[Page 15093]]
section 17(a) if the terms of the transaction, including the
consideration to be paid or received, are reasonable and fair and do
not involve overreaching on the part of any person concerned, and the
transaction is consistent with the policy of each registered investment
company and with the general purposes of the Act.
3. Applicant asserts that the terms of the In-Kind Repurchase Offer
meet the requirements of sections 17(b) of the Act. Applicant asserts
that neither the Fund nor an Affiliated Shareholder has any choice as
to the Distributable Securities to be received as proceeds from the In-
Kind Repurchase Offer. Instead, each participating shareholder will
receive their pro rata portion of each of the Fund's Distributable
Securities. Moreover, applicant states that the portfolio securities to
be distributed in the In-Kind Repurchase Offer will be valued in
accordance with section 2(a)(41) of the Act, which will be an
objective, verifiable standard that removes any discretion of an
Affiliated Shareholder, Advent or GFIA to conduct the In-Kind
Repurchase Offer at a price that would be beneficial or detrimental to
the interests of any particular shareholder. Applicant further states
that the In-Kind Repurchase Offer is consistent with the Fund's
investment policies and limitations. Applicant represents that the In-
Kind Repurchase Offer is consistent with the general purposes of the
Act because the interests of all shareholders are equally protected and
no Affiliated Shareholder would receive an advantage or special benefit
not available to any other shareholder participating in the In-Kind
Repurchase Offer.
Applicant's Conditions
Applicant agrees that any order granting the requested relief will
be subject to the following conditions:
1. Applicant will distribute to shareholders participating in the
In-Kind Repurchase Offer an in-kind pro rata distribution of portfolio
securities of Applicant. The pro rata distribution will not include:
(a) Securities that, if distributed, would be required to be registered
under the 1933 Act; (b) securities issued by entities in countries that
restrict or prohibit the holdings of securities by non-residents other
than through qualified investment vehicles, or whose distribution would
otherwise be contrary to applicable local laws, rules or regulations;
and (c) certain portfolio assets, such as derivative instruments or
repurchase agreements, that involve the assumption of contractual
obligations, require special trading facilities, or can only be traded
with the counterparty to the transaction. In addition, Applicant will
exclude from the distribution portfolio securities held by the Fund
which are not eligible for clearance and trade settlement through the
DTC. Cash will be paid for that portion of Applicant's assets
represented by cash and cash equivalents (such as certificates of
deposit, commercial paper and repurchase agreements) and other assets
which are not readily distributable (including receivables and prepaid
expenses), net of all liabilities (including accounts payable).
Applicant will round down or up the aggregate amount of each portfolio
security eligible to be distributed to ensure that the Fund will
continue to hold the nearest round lot amount of each portfolio
security. In lieu of distributing fractional securities (i.e. less than
a full share in the case of stocks and less than the par amount
denomination in which a single bond trades in the case of bonds) and
accruals on portfolio securities, Applicant will distribute a higher
pro-rata percentage of other portfolio securities, selected by lot, to
represent such fractional securities. With respect to any amount that
cannot be represented by a whole security, Applicant will distribute
cash in lieu of such fractional securities. Such proration calculations
will be made in accordance with written proration policies and
procedures that will be approved by the Board of Trustees, including a
majority of the Independent Trustees.
2. The securities distributed to shareholders pursuant to the In-
Kind Repurchase Offer will be limited to securities that are traded on
a public securities market or for which quoted bid and asked prices are
available.
3. The securities distributed to shareholders pursuant to the In-
Kind Repurchase Offer will be valued in the same manner as they would
be valued for purposes of computing Applicant's net asset value,
consistent with the requirements of section 2(a)(41) of the Act.
4. Applicant will maintain and preserve for a period of not less
than six years from the end of the fiscal year in which the In-Kind
Repurchase Offer occurs, the first two years in an easily accessible
place, a written record of the In-Kind Repurchase Offer, that includes
the identity of each shareholder of record that participated in the In-
Kind Repurchase Offer, whether that shareholder was an Affiliated
Shareholder, a description of each security distributed, the terms of
the distribution, and the information or materials upon which the
valuation was made.
For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05850 Filed 3-23-17; 8:45 am]
BILLING CODE 8011-01-P
