Rydex ETF Trust, et al.; Notice of Application, 50992-50994 [E7-17499]

Download as PDF 50992 Federal Register / Vol. 72, No. 171 / Wednesday, September 5, 2007 / Notices records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, http://www.nrc.gov/reading-rm/ adams.html. Persons who do not have access to ADAMS or who have problems in accessing the documents in ADAMS should call the NRC PDR reference staff at 1–800–397–4209 or 301–415–4737 or e-mail pdr@nrc.gov. Dated at Rockville, Maryland, this 29th day of August 2007. For the Nuclear Regulatory Commission. Keith I. McConnell, Deputy Director, Decommissioning and Uranium Recovery Licensing Directorate, Division of Waste Management and Environmental Protection, Office of Federal and State Materials and Environmental Programs. [FR Doc. E7–17494 Filed 9–4–07; 8:45 am] BILLING CODE 7590–01–P NUCLEAR REGULATORY COMMISSION Notice of Sunshine Act Meetings Agency Holding the Meetings: Nuclear Regulatory Commission. Date: Weeks of September 3, 10, 17, 24, October 1, 8, 2007. Place: Commissioners’ Conference Room, 11555 Rockville Pike, Rockville, Maryland. Status: Public and Closed. Matters To Be Considered Week of September 3, 2007 Tuesday, September 4, 2007 2:30 p.m. Briefing on Radioactive Materials Security and Licensing (Public Meeting) (Contact: Robert Lewis, 301– 415–8722). This meeting will be webcast live at the Web address— http://www.nrc.gov. Week of September 10, 2007—Tentative There are no meetings scheduled for the Week of September 10, 2007. Week of September 17, 2007—Tentative There are no meetings scheduled for the Week of September 17, 2007. rfrederick on PROD1PC67 with NOTICES Week of September 24, 2007—Tentative There are no meetings scheduled for the Week of September 24, 2007. Week of October 1, 2007—Tentative Tuesday, October 2, 2007 9:30 a.m. Periodic Briefing on Security Issues (Closed—Ex. 1 & 3). VerDate Aug<31>2005 15:30 Sep 04, 2007 Jkt 211001 Wednesday, October 3, 2007 2 p.m. Briefing on NRC’s International Programs, Performance, and Plans (Public Meeting) (Contact: Karen Henderson, 301–415–0202). This meeting will be webcast live at the Web address— http://www.nrc.gov. Week of October 8, 2007—Tentative There are no meetings scheduled for the Week of October 8, 2007. * * * * * *The schedule for Commission meetings is subject to change on short notice. To verify the status of meetings call (recording)—(301) 415–1292. Contact person for more information: Michelle Schroll, (301) 415–1662. * * * * * Additional Information Affirmation of ‘‘Pacific Gas and Electric Co. (Diablo Canyon ISFSI), Docket No. 72–26–ISFSI, San Luis Obispo Mothers for Peace’s Contentions and Request for Hearing Regarding Diablo Canyon Environmental Assessment Supplement’’ tentatively scheduled on August 30, 2007, at 9 a.m. has been postponed and not yet rescheduled. * * * * * The NRC Commission Meeting Schedule can be found on the Internet at: http://www.nrc.gov/about-nrc/policymaking/schedule.html. * * * * * The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (e.g. braille, large print), please notify the NRC’s Disability Program Coordinator, Rohn Brown, at 301–492–2279, TDD: 301–415–2100, or by e-mail at REB3@nrc.gov. Determinations on requests for reasonable accommodation will be made on a case-by-case basis. * * * * * This notice is distributed by mail to several hundred subscribers; if you no longer wish to receive it, or would like to be added to the distribution, please contact the Office of the Secretary, Washington, DC 20555 (301–415–1969). In addition, distribution of this meeting notice over the Internet system is available. If you are interested in receiving this Commission meeting schedule electronically, please send an electronic message to dkw@nrc.gov. PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 Dated: August 30, 2007. R. Michelle Schroll, Office of the Secretary. [FR Doc. 07–4351 Filed 8–31–07; 11:51 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27958; 812–13387] Rydex ETF Trust, et al.; Notice of Application August 28, 2007. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application to amend a prior order under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), 22(e), and 24(d) of the Act and rule 22c–1 under the Act, and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (a)(2) of the Act. AGENCY: Summary of Application: Applicants request an order to amend a prior order that permits (a) An open-end management investment company comprised of multiple series based on domestic equity securities indexes (each a ‘‘Fund’’) to issue shares (‘‘Shares’’) that can be redeemed only in large aggregations (‘‘Creation Units’’); (b) secondary market transactions in Shares to occur at negotiated prices; (c) dealers to sell Shares to purchasers in the secondary market unaccompanied by a prospectus when prospectus delivery is not required by the Securities Act of 1933; and (d) certain affiliated persons of the Funds to deposit securities into, and receive securities from, the Fund in connection with the purchase and redemption of Creation Units (‘‘Prior Order’’).1 Applicants seek to amend the Prior Order in order to offer two new series (the ‘‘New Funds’’) and future series (‘‘Future Funds’’) including Future Funds based on international equity securities indexes (collectively, this subset of Future Funds, together with the New Funds, the ‘‘International Funds’’).2 In addition the order would delete a condition related to future relief in the Prior Order. Applicants: Rydex ETF Trust (‘‘Trust’’), PADCO Advisors II, Inc. (‘‘Adviser’’), and Rydex Distributors, Inc. (‘‘Distributor’’). 1 Rydex ETF Trust, et al., Investment Company Act Release Nos. 25948 (Feb. 27, 2003) (notice) and 25970 (Mar. 25, 2003) (order). 2 The existing Funds, the New Funds and the Future Funds are referred to collectively as the ‘‘Funds.’’ E:\FR\FM\05SEN1.SGM 05SEN1 Federal Register / Vol. 72, No. 171 / Wednesday, September 5, 2007 / Notices rfrederick on PROD1PC67 with NOTICES Filing Dates: The application was filed on May 23, 2007, and amended on August 6, 2007. 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 September 24, 2007, and should be accompanied by proof of service on applicants, in the form of an affidavit, or for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, 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, 9601 Blackwell Road, Suite 500, Rockville, MD 20850. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at (202) 551–6817, or Michael W. Mundt, Assistant Director, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the Public Reference Desk, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–0102 (telephone (202) 551–5850). Applicants’ Representations 1. The Trust, a Delaware statutory trust, is an open-end management investment company registered under the Act and is comprised of multiple Funds. The Adviser, which is registered as an investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’), serves as investment adviser to each Fund. The Adviser may in the future retain one or more subadvisers (‘‘Sub-Advisers’’) to manage particular Funds’ portfolios. Any SubAdviser will be registered under the Advisers Act. The Distributor, a brokerdealer registered under the Securities Exchange Act of 1934 (‘‘Exchange Act’’), serves as the principal underwriter and distributor for the Funds. 2. The Trust currently offers Funds based on underlying equity income securities indexes (each an ‘‘Underlying Index’’) comprised of domestic equity securities in reliance on the Prior Order. VerDate Aug<31>2005 13:51 Sep 04, 2007 Jkt 211001 Applicants seek to amend the Prior Order to permit the Trust to offer the New Funds, which are based on Underlying Indexes comprised of foreign equity securities.3 The New Funds would operate in a manner identical to the existing Funds, except as described in the application (and summarized in this notice). No entity that creates, compiles, sponsors, or maintains an Underlying Index is or will be an affiliated person, as defined in section 2(a)(3) of the Act, or an affiliated person of an affiliated person, of a Trust, the Adviser, any SubAdviser, the promoter or Distributor of a Fund. 3. Under the Prior Order, each Fund is subject to the representation that it will invest at least 90% of its assets in the component securities of its Underlying Index (‘‘Component Securities’’). Applicants request relief to amend the prior order to permit a Fund to invest at least 80% or 90% of its assets, as disclosed in the relevant prospectus, in the Component Securities of the Underlying Index.4 In addition, applicants request relief to permit each International Fund, for purposes of satisfying this requirement, to count certain depositary receipts (‘‘Depositary Receipts’’) that represent Component Securities as well as Component Securities. Applicants represent that each International Fund would thus invest at least 80% of its assets in the Component Securities of its Underlying Index and Depositary Receipts representing such Component Securities.5 Applicants state that an International Fund generally would only hold Depositary Receipts if the Adviser believed that holding the Depositary Receipts, rather than holding the Component Securities, would benefit the International Fund. 4. Applicants state that all discussions contained in the application for the Prior Order are equally applicable to the New Funds, except as specifically noted by applicants (as summarized in this notice). Applicants assert that the New Funds will operate in a manner identical to the existing Funds and will 3 The New Funds will seek to track the S&P International Equal Weight Index and the Russell Emerging Markets Index. 4 Applicants state that at all times a Fund will hold, in the aggregate, at least 80% of its total assets in Component Securities and investments that have economic characteristics that are substantially identical to the economic characteristics of the Component Securities of its Underlying Index. 5 Applicants state that the Depositary Receipts will be listed on a national securities exchange, as defined in section 2(a)(26) of the Act (‘‘Exchange’’) or a foreign exchange. The Adviser, Sub-Adviser and their affiliated persons will not serve as the depositary bank for any Depositary Receipts held by an International Fund. PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 50993 comply with all of the terms, provisions and conditions of the Prior Order, as amended by the present application. Applicants believe that the requested relief continues to meet the necessary exemptive standards. Applicants’ Legal Analysis Section 22(e) of the Act 1. In connection with applicants’ request for relief to permit the operations of the New Funds, applicants seek to amend the Prior Order to add relief from section 22(e) of the Act. Section 22(e) generally prohibits a registered investment company from suspending the right of redemption or postponing the date of payment of redemption proceeds for more than seven days after the tender of a security for redemption. The principal reason for the requested exemption is that settlement of redemptions for the International Funds is contingent not only on the settlement cycle of the United States market, but also on currently practicable delivery cycles in local markets for underlying foreign securities held by the International Funds. Applicants state that local market delivery cycles for transferring certain foreign securities to investors redeeming Creation Units, together with local market holiday schedules, will, under certain circumstances, require a delivery process in excess of seven calendar days for the International Funds. Applicants request relief under section 6(c) of the Act from section 22(e) in such circumstances to allow the International Funds to pay redemption proceeds up to 14 calendar days after the tender of any Creation Units for redemption. At all other times and except as disclosed in the relevant prospectus, product description, or statement of additional information (‘‘SAI’’), applicants expect that each International Fund will be able to deliver redemption proceeds within seven days.6 With respect to Future Funds that are International Funds, applicants seek the same relief from section 22(e) only to the extent that circumstances similar to those described in the application exist. 2. Applicants state that section 22(e) was designed to prevent unreasonable, undisclosed and unforeseen delays in the payment of redemption proceeds. Applicants assert that the requested relief will not lead to the problems that 6 Rule 15c6–1 under the Exchange Act requires that most securities transactions be settled within three business days of the trade. Applicants acknowledge that no relief obtained from the requirements of section 22(e) will affect any obligations applicants may have under rule 15c6– 1. E:\FR\FM\05SEN1.SGM 05SEN1 50994 Federal Register / Vol. 72, No. 171 / Wednesday, September 5, 2007 / Notices rfrederick on PROD1PC67 with NOTICES section 22(e) was designed to prevent. Applicants state that the SAI for each International Fund will disclose those local holidays (over the period of at least one year following the date of the SAI), if any, that are expected to prevent the delivery of redemption proceeds in seven calendar days, and the maximum number of days needed to deliver the proceeds for the relevant International Fund. Future Relief 3. Applicants also seek to amend the Prior Order to modify the terms under which the Trust may offer Future Funds. The Prior Order is currently subject to a condition that does not permit relief for Future Funds unless applicants request and receive with respect to such Future Fund, either exemptive relief from the Commission or a no-action letter from the Division of Investment Management of the Commission, or the Future Fund could be listed on an Exchange without the need for a filing pursuant to rule 19b– 4 under the Exchange Act. 4. The order would amend the Prior Order to delete this condition. Any Future Fund will: (a) Be advised by the Adviser, or an entity controlled by or under common control with the Adviser; (b) track an Underlying Index that is created, compiled, sponsored or maintained by an entity that is not an affiliated person, as defined in section 2(a)(3) of the Act, or an affiliated person of an affiliated person, of the Adviser, the Distributor, the Trust or any SubAdviser or promoter of a Fund; and (c) comply with the respective terms and conditions of the Prior Order, as amended by the present application. 5. Applicants believe that the modification of the future relief available under the Prior Order would be consistent with sections 6(c) and 17(b) of the Act and that granting the requested relief will facilitate the timely creation of Future Funds by removing the need to seek additional exemptive relief. Applicants submit that the terms and conditions of the Prior Order have been appropriate for the existing Funds and would remain appropriate for Future Funds. Applicants also submit that tying exemptive relief under the Act to the ability of a Future Fund to be listed on an Exchange without the need for a rule 19b–4 filing under the Exchange Act is not necessary to meet the standards under sections 6(c) and 17(b) of the Act. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the same conditions as those VerDate Aug<31>2005 13:51 Sep 04, 2007 Jkt 211001 imposed by the Prior Order, except for condition 1 to the Prior Order, which will be deleted. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Nancy M. Morris, Secretary. [FR Doc. E7–17499 Filed 9–4–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56330; File No. SR–Amex– 2007–92] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending the Payment for Order Flow Plan To Apply the Current Marketing Fee to Orders Sent to Directed Order Participants August 28, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 20, 2007, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. Amex has designated this proposal as one establishing or changing a due, fee, or other charge imposed by Amex under section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Payment for Order Flow Plan to apply the current marketing fee to orders sent to Directed Order Participants.5 The text 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 The Exchange’s Directed Order Program (the ‘‘Program’’) was recently approved by the Commission. See Securities Exchange Act Release No. 56269 (August 15, 2007), 72 FR 47086 (August 22, 2007) (Notice of Filing and Order Granting Accelerated Approval of SR–Amex 2007–75). A Directed Order Participant, as defined in proposed Rule 996–ANTE is any specialist, Registered 2 17 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// www.amex.com. 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 Exchange 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 of these statements may be examined at the places specified in Item IV below. Amex has substantially prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the current fee schedule to apply the marketing fee charged to equity options (the ‘‘Payment for Order Flow Plan’’) to orders sent to Directed Order Participants.6 A Directed Order Participant may choose to opt in or opt out of the Payment for Order Flow Plan.7 If the Directed Order Participant chooses to opt into the Payment for Order Flow Plan, the Exchange will collect the applicable marketing fee per contract from the participating specialists, ROTs, RROTs, and SROTs, for all electronic customer orders directed to that Directed Order Participant. The pool of funds collected would be used to fund Options Trader (‘‘ROT’’), Supplemental Registered Options Trader (‘‘SROT’’), and Remote Registered Options Trader (‘‘RROT’’) that enters into arrangements with an Order Flow Provider, whereby they could receive directed orders upon meeting certain eligibility requirements. 6 Under the current plan, the Exchange charges an equity options marketing fee of $0.75, $0.35, or $0.40 per contract solely to customer orders that are from payment accepting firms with whom a specialist or SROT has negotiated a payment for order flow arrangement. SPDR Options are currently subject to a $1.00 or $.40 per contract fee. The $0.75 and $0.35 fee solely applies to those orders that are executed electronically through the Exchange’s ANTE system, while the $0.40 fee applies to those series of equity options, exchange traded fund share options (including SPY options), Trust Issued Receipt Options, NDX, and RUT options that are manually executed customer orders of 1,000 contracts or greater. 7 Once a Directed Order Participant opts into the Payment for Order Flow Plan, no notice to the Exchange is required in a subsequent month unless there is a change in the participation status. E:\FR\FM\05SEN1.SGM 05SEN1

Agencies

[Federal Register Volume 72, Number 171 (Wednesday, September 5, 2007)]
[Notices]
[Pages 50992-50994]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17499]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27958; 812-13387]


Rydex ETF Trust, et al.; Notice of Application

August 28, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application to amend a prior order under section 
6(c) of the Investment Company Act of 1940 (``Act'') for an exemption 
from sections 2(a)(32), 5(a)(1), 22(d), 22(e), and 24(d) of the Act and 
rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the Act 
for an exemption from sections 17(a)(1) and (a)(2) of the Act.

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    Summary of Application: Applicants request an order to amend a 
prior order that permits (a) An open-end management investment company 
comprised of multiple series based on domestic equity securities 
indexes (each a ``Fund'') to issue shares (``Shares'') that can be 
redeemed only in large aggregations (``Creation Units''); (b) secondary 
market transactions in Shares to occur at negotiated prices; (c) 
dealers to sell Shares to purchasers in the secondary market 
unaccompanied by a prospectus when prospectus delivery is not required 
by the Securities Act of 1933; and (d) certain affiliated persons of 
the Funds to deposit securities into, and receive securities from, the 
Fund in connection with the purchase and redemption of Creation Units 
(``Prior Order'').\1\ Applicants seek to amend the Prior Order in order 
to offer two new series (the ``New Funds'') and future series (``Future 
Funds'') including Future Funds based on international equity 
securities indexes (collectively, this subset of Future Funds, together 
with the New Funds, the ``International Funds'').\2\ In addition the 
order would delete a condition related to future relief in the Prior 
Order.
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    \1\ Rydex ETF Trust, et al., Investment Company Act Release Nos. 
25948 (Feb. 27, 2003) (notice) and 25970 (Mar. 25, 2003) (order).
    \2\ The existing Funds, the New Funds and the Future Funds are 
referred to collectively as the ``Funds.''
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    Applicants: Rydex ETF Trust (``Trust''), PADCO Advisors II, Inc. 
(``Adviser''), and Rydex Distributors, Inc. (``Distributor'').

[[Page 50993]]

    Filing Dates: The application was filed on May 23, 2007, and 
amended on August 6, 2007.
    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 September 24, 2007, and should be accompanied by proof of 
service on applicants, in the form of an affidavit, or for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, 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, 9601 Blackwell 
Road, Suite 500, Rockville, MD 20850.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at 
(202) 551-6817, or Michael W. Mundt, Assistant Director, at (202) 551-
6821 (Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
Public Reference Desk, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-0102 (telephone (202) 551-5850).

Applicants' Representations

    1. The Trust, a Delaware statutory trust, is an open-end management 
investment company registered under the Act and is comprised of 
multiple Funds. The Adviser, which is registered as an investment 
adviser under the Investment Advisers Act of 1940 (``Advisers Act''), 
serves as investment adviser to each Fund. The Adviser may in the 
future retain one or more sub-advisers (``Sub-Advisers'') to manage 
particular Funds' portfolios. Any Sub-Adviser will be registered under 
the Advisers Act. The Distributor, a broker-dealer registered under the 
Securities Exchange Act of 1934 (``Exchange Act''), serves as the 
principal underwriter and distributor for the Funds.
    2. The Trust currently offers Funds based on underlying equity 
income securities indexes (each an ``Underlying Index'') comprised of 
domestic equity securities in reliance on the Prior Order. Applicants 
seek to amend the Prior Order to permit the Trust to offer the New 
Funds, which are based on Underlying Indexes comprised of foreign 
equity securities.\3\ The New Funds would operate in a manner identical 
to the existing Funds, except as described in the application (and 
summarized in this notice). No entity that creates, compiles, sponsors, 
or maintains an Underlying Index is or will be an affiliated person, as 
defined in section 2(a)(3) of the Act, or an affiliated person of an 
affiliated person, of a Trust, the Adviser, any Sub-Adviser, the 
promoter or Distributor of a Fund.
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    \3\ The New Funds will seek to track the S&P International Equal 
Weight Index and the Russell Emerging Markets Index.
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    3. Under the Prior Order, each Fund is subject to the 
representation that it will invest at least 90% of its assets in the 
component securities of its Underlying Index (``Component 
Securities''). Applicants request relief to amend the prior order to 
permit a Fund to invest at least 80% or 90% of its assets, as disclosed 
in the relevant prospectus, in the Component Securities of the 
Underlying Index.\4\ In addition, applicants request relief to permit 
each International Fund, for purposes of satisfying this requirement, 
to count certain depositary receipts (``Depositary Receipts'') that 
represent Component Securities as well as Component Securities. 
Applicants represent that each International Fund would thus invest at 
least 80% of its assets in the Component Securities of its Underlying 
Index and Depositary Receipts representing such Component 
Securities.\5\ Applicants state that an International Fund generally 
would only hold Depositary Receipts if the Adviser believed that 
holding the Depositary Receipts, rather than holding the Component 
Securities, would benefit the International Fund.
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    \4\ Applicants state that at all times a Fund will hold, in the 
aggregate, at least 80% of its total assets in Component Securities 
and investments that have economic characteristics that are 
substantially identical to the economic characteristics of the 
Component Securities of its Underlying Index.
    \5\ Applicants state that the Depositary Receipts will be listed 
on a national securities exchange, as defined in section 2(a)(26) of 
the Act (``Exchange'') or a foreign exchange. The Adviser, Sub-
Adviser and their affiliated persons will not serve as the 
depositary bank for any Depositary Receipts held by an International 
Fund.
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    4. Applicants state that all discussions contained in the 
application for the Prior Order are equally applicable to the New 
Funds, except as specifically noted by applicants (as summarized in 
this notice). Applicants assert that the New Funds will operate in a 
manner identical to the existing Funds and will comply with all of the 
terms, provisions and conditions of the Prior Order, as amended by the 
present application. Applicants believe that the requested relief 
continues to meet the necessary exemptive standards.

Applicants' Legal Analysis

Section 22(e) of the Act

    1. In connection with applicants' request for relief to permit the 
operations of the New Funds, applicants seek to amend the Prior Order 
to add relief from section 22(e) of the Act. Section 22(e) generally 
prohibits a registered investment company from suspending the right of 
redemption or postponing the date of payment of redemption proceeds for 
more than seven days after the tender of a security for redemption. The 
principal reason for the requested exemption is that settlement of 
redemptions for the International Funds is contingent not only on the 
settlement cycle of the United States market, but also on currently 
practicable delivery cycles in local markets for underlying foreign 
securities held by the International Funds. Applicants state that local 
market delivery cycles for transferring certain foreign securities to 
investors redeeming Creation Units, together with local market holiday 
schedules, will, under certain circumstances, require a delivery 
process in excess of seven calendar days for the International Funds. 
Applicants request relief under section 6(c) of the Act from section 
22(e) in such circumstances to allow the International Funds to pay 
redemption proceeds up to 14 calendar days after the tender of any 
Creation Units for redemption. At all other times and except as 
disclosed in the relevant prospectus, product description, or statement 
of additional information (``SAI''), applicants expect that each 
International Fund will be able to deliver redemption proceeds within 
seven days.\6\ With respect to Future Funds that are International 
Funds, applicants seek the same relief from section 22(e) only to the 
extent that circumstances similar to those described in the application 
exist.
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    \6\ Rule 15c6-1 under the Exchange Act requires that most 
securities transactions be settled within three business days of the 
trade. Applicants acknowledge that no relief obtained from the 
requirements of section 22(e) will affect any obligations applicants 
may have under rule 15c6-1.
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    2. Applicants state that section 22(e) was designed to prevent 
unreasonable, undisclosed and unforeseen delays in the payment of 
redemption proceeds. Applicants assert that the requested relief will 
not lead to the problems that

[[Page 50994]]

section 22(e) was designed to prevent. Applicants state that the SAI 
for each International Fund will disclose those local holidays (over 
the period of at least one year following the date of the SAI), if any, 
that are expected to prevent the delivery of redemption proceeds in 
seven calendar days, and the maximum number of days needed to deliver 
the proceeds for the relevant International Fund.

Future Relief

    3. Applicants also seek to amend the Prior Order to modify the 
terms under which the Trust may offer Future Funds. The Prior Order is 
currently subject to a condition that does not permit relief for Future 
Funds unless applicants request and receive with respect to such Future 
Fund, either exemptive relief from the Commission or a no-action letter 
from the Division of Investment Management of the Commission, or the 
Future Fund could be listed on an Exchange without the need for a 
filing pursuant to rule 19b-4 under the Exchange Act.
    4. The order would amend the Prior Order to delete this condition. 
Any Future Fund will: (a) Be advised by the Adviser, or an entity 
controlled by or under common control with the Adviser; (b) track an 
Underlying Index that is created, compiled, sponsored or maintained by 
an entity that is not an affiliated person, as defined in section 
2(a)(3) of the Act, or an affiliated person of an affiliated person, of 
the Adviser, the Distributor, the Trust or any Sub-Adviser or promoter 
of a Fund; and (c) comply with the respective terms and conditions of 
the Prior Order, as amended by the present application.
    5. Applicants believe that the modification of the future relief 
available under the Prior Order would be consistent with sections 6(c) 
and 17(b) of the Act and that granting the requested relief will 
facilitate the timely creation of Future Funds by removing the need to 
seek additional exemptive relief. Applicants submit that the terms and 
conditions of the Prior Order have been appropriate for the existing 
Funds and would remain appropriate for Future Funds. Applicants also 
submit that tying exemptive relief under the Act to the ability of a 
Future Fund to be listed on an Exchange without the need for a rule 
19b-4 filing under the Exchange Act is not necessary to meet the 
standards under sections 6(c) and 17(b) of the Act.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the same conditions as those imposed by the Prior Order, 
except for condition 1 to the Prior Order, which will be deleted.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Nancy M. Morris,
Secretary.
 [FR Doc. E7-17499 Filed 9-4-07; 8:45 am]
BILLING CODE 8010-01-P