PowerShares Exchange-Traded Fund Trust, et al.; Notice of Application, 28076-28078 [E9-13812]
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28076
Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices
writing within 60 days of this
publication.
Comments should be directed to
Charles Boucher, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Shirley
Martinson, 6432 General Green Way,
Alexandria, VA 22312 or send an e-mail
to: PRA_Mailbox@sec.gov.
Dated: June 8, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–13814 Filed 6–11–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Form 13F; SEC File No. 270–22; OMB
Control No. 3235–0006.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission (the
‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Section 13(f)1 of the Securities
Exchange Act of 19342 (the ‘‘Exchange
Act’’) empowers the Commission to: (1)
Adopt rules that create a reporting and
disclosure system to collect specific
information; and (2) disseminate such
information to the public. Rule 13f-13
under the Exchange Act requires
institutional investment managers that
exercise investment discretion over
accounts—having in the aggregate a fair
market value of at least $100,000,000 of
exchange-traded or NASDAQ-quoted
equity securities—to file quarterly
reports with the Commission on Form
13F.
The information collection
requirements apply to institutional
investment managers that meet the $100
million reporting threshold. Section
13(f)(5) of the Exchange Act defines an
‘‘institutional investment manager’’ as
any person, other than a natural person,
investing in or buying and selling
securities for its own account, and any
person exercising investment discretion
with respect to the account of any other
person. Form 13F under the Exchange
Act defines ‘‘investment discretion’’ for
purposes of Form 13F reporting.
The reporting system required by
Section 13(f) of the Exchange Act is
intended, among other things, to create
in the Commission a central repository
of historical and current data about the
investment activities of institutional
investment managers, and to improve
the body of factual data available to
regulators and the public.
The Commission staff estimates that
4,052 respondents make approximately
16,208 responses under the rule each
year. The staff estimates that on average,
Form 13F filers spend 98.8 hours/year
to prepare and submit the report. In
addition, the staff estimates that 210
respondents file approximately 840
amendments each year. The staff
estimates that on average, Form 13F
filers spend 4 hours/year to prepare and
submit amendments to Form 13F. The
total annual burden of the rule’s
requirements for all respondents
therefore is estimated to be 401,178
hours ((4,052 filers x 98.8 hours) + (210
filers x 4 hours)).
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
the costs of Commission rules. An
agency may not conduct or sponsor, and
a person is not required to respond to,
a collection of information unless it
displays a currently valid control
number.
Please direct general comments
regarding the above information to the
following persons: (i) Desk Officer for
the Securities and Exchange
Commission, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503
or send an e-mail to Shagufta Ahmed at
Shagufta_Ahmed@omb.eop.gov; and (ii)
Charles Boucher, Director/CIO,
Securities and Exchange Commission,
C/O Shirley Martinson, 6432 General
Green Way, Alexandria, VA 22312; or
send an e-mail to:
PRA_Mailbox@sec.gov. Comments must
be submitted to OMB within 30 days of
this notice.
1 15
Dated: June 8, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–13813 Filed 6–11–09; 8:45 am]
2 15
BILLING CODE 8010–01–P
U.S.C. 78m(f).
U.S.C. 78a et seq.
3 17 CFR 240.13f–1.
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SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
28760; File No. 812–13604]
PowerShares Exchange-Traded Fund
Trust, et al.; Notice of Application
June 8, 2009.
AGENCY: Securities and Exchange
Commission.
ACTION: Notice of an application under
section 6(c) of the Investment Company
Act of 1940 (‘‘Act’’) for an exemption
from rule 12d1–2(a) under the Act.
SUMMARY OF APPLICATION: Applicants
request an order to permit funds of
funds relying on rule 12d1–2 under the
Act to invest in certain financial
instruments.
APPLICANTS: PowerShares ExchangeTraded Fund Trust, PowerShares
Exchange-Traded Fund Trust II,
PowerShares India Exchange-Traded
Fund Trust and PowerShares Actively
Managed Exchange-Traded Fund Trust
(collectively, ‘‘PowerShares Trusts’’),
AIM Counselor Series Trust, AIM Equity
Funds, AIM Funds Group, AIM Growth
Series, AIM International Mutual Funds,
AIM Investment Funds, AIM Investment
Securities Funds, AIM Sector Funds,
AIM Tax-Exempt Funds, AIM
Treasurer’s Series Trust, AIM Variable
Insurance Funds, and Short-Term
Investments Trust (collectively, ‘‘AIM
Trusts’’ and together with PowerShares
Trusts, the ‘‘Trusts’’), Invesco
PowerShares Capital Management LLC
(‘‘IPCM’’) and Invesco Aim Advisors,
Inc. (‘‘IAA’’) and Invesco Aim
Distributors, Inc. (the ‘‘Distributor’’).
DATES: Filing Dates: The application was
filed on November 14, 2008, and
amended on May 26, 2009. 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 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 July 6, 2009 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.
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Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices
Secretary, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090;
Applicants: PowerShares Trusts and
IPCM, 301 West Roosevelt Road,
Wheaton, IL 60187, AIM Trusts, IAA,
and the Distributor, 11 Greenway Plaza,
Suite 100, Houston, TX 77046.
FOR FURTHER INFORMATION CONTACT:
Barbara Heussler, Senior Counsel, at
(202) 551–6990, or Jennifer L. Sawin,
Branch Chief, 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 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.
ADDRESSES:
Applicants’ Representations
1. Each of PowerShares ExchangeTraded Fund Trust, PowerShares
Exchange-Traded Fund Trust II, and
PowerShares India Exchange-Traded
Fund Trust is organized as a
Massachusetts business trust. Each of
the other Trusts is organized as a
Delaware statutory trust.
IPCM is a Delaware limited liability
company and IAA is a Delaware
corporation; each is registered as an
investment adviser under the
Investment Advisers Act of 1940, as
amended, and currently serves as an
investment adviser to existing series of
the Trusts. The Distributor is a Delaware
corporation and is registered as a
broker-dealer under the Securities
Exchange Act of 1934, as amended
(‘‘Exchange Act’’). The Distributor
serves as the distributor of existing
series of the Trusts.
2. Applicants request the exemption
to the extent necessary to permit any
existing or future registered open-end
management investment company or
series thereof that (a) is advised by
IPCM, IAA or any entity controlling,
controlled by or under common control
with either of them (each, an
‘‘Adviser’’), (b) is in the same group of
investment companies as defined in
section 12(d)(1)(G) of the Act, (c) invests
in shares of other registered open-end
investment companies (‘‘Underlying
Funds’’) in reliance on section
12(d)(1)(G) of the Act, and (d) is also
eligible to invest in securities (as
defined in section 2(a)(36) of the Act) in
reliance on rule 12d1–2 under the Act
(each, a ‘‘Fund of Funds’’), to also
invest, to the extent consistent with its
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investment objective, policies, strategies
and limitations, in financial instruments
that may not be securities within the
meaning of section 2(a)(36) of the Act
(‘‘Other Investments’’).1 Applicants state
that all Funds of Funds and Underlying
Funds are or will be registered with the
Commission as open-end management
investment companies.
3. Consistent with its fiduciary
obligations under the Act, each Fund of
Fund’s board of trustees or directors
will review the advisory fees charged by
the Fund of Fund’s investment adviser
to ensure that they are based on services
provided that are in addition to, rather
than duplicative of, services provided
pursuant to the advisory agreement of
any investment company in which the
Fund may invest.
Applicants’ Legal Analysis
1. Section 12(d)(1)(A) of the Act
provides that no registered investment
company (‘‘acquiring company’’) may
acquire securities of another investment
company (‘‘acquired company’’) if such
securities represent more than 3% of the
acquired company’s outstanding voting
stock or more than 5% of the acquiring
company’s total assets, or if such
securities, together with the securities of
other investment companies, represent
more than 10% of the acquiring
company’s total assets. Section
12(d)(1)(B) of the Act provides that no
registered open-end investment
company may sell its securities to
another investment company if the sale
will cause the acquiring company to
own more than 3% of the acquired
company’s voting stock, or cause more
than 10% of the acquired company’s
voting stock to be owned by investment
companies and companies controlled by
them.
2. Section 12(d)(1)(G) of the Act
provides that section 12(d)(1) will not
apply to securities of an acquired
company purchased by an acquiring
company if: (i) The acquired company
and acquiring company are part of the
same group of investment companies;
(ii) the acquiring company holds only
securities of acquired companies that
are part of the same group of investment
companies, government securities, and
short-term paper; (iii) the aggregate sales
loads and distribution-related fees of the
acquiring company and the acquired
company are not excessive under rules
adopted pursuant to section 22(b) or
section 22(c) of the Act by a securities
1 Every existing entity that currently intends to
rely on the requested order is named as an
applicant. Any existing or future entity that relies
on the order in the future will do so only in
accordance with the terms and conditions in the
application.
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28077
association registered under section 15A
of the Exchange Act or by the
Commission; and (iv) the acquired
company has a policy that prohibits it
from acquiring securities of registered
open-end investment companies or
registered unit investment trusts in
reliance on section 12(d)(1)(F) or (G) of
the Act.
3. Rule 12d1–2 under the Act permits
a registered open-end investment
company or a registered unit investment
trust that relies on section 12(d)(1)(G) of
the Act to acquire, in addition to
securities issued by another registered
investment company in the same group
of investment companies, government
securities, and short-term paper: (1)
Securities issued by an investment
company that is not in the same group
of investment companies, when the
acquisition is in reliance on section
12(d)(1)(A) or 12(d)(1)(F) of the Act; (2)
securities (other than securities issued
by an investment company); and (3)
securities issued by a money market
fund, when the investment is in reliance
on rule 12d1–1 under the Act. For the
purposes of rule 12d1–2, ‘‘securities’’
means any security as defined in section
2(a)(36) of the Act.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction from any
provision of the Act, or from any rule
under 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 policies and
provisions of the Act.
5. Applicants state that the proposed
arrangement would comply with the
provisions of rule 12d1–2 under the Act,
but for the fact that the Funds may
invest a portion of their assets in Other
Investments. Applicants request an
order under section 6(c) of the Act for
an exemption from rule 12d1–2(a) to
allow the Funds to invest in Other
Investments. Applicants assert that
permitting the Funds to invest in Other
Investments as described in the
application would not raise any of the
concerns that the requirements of
section 12(d)(1) were designed to
address.
Applicants’ Condition
Applicants agree that the order
granting the requested relief will be
subject to the following condition:
Applicants will comply with all
provisions of rule 12d1–2 under the Act,
except for paragraph (a)(2) to the extent
that it restricts any Fund of Funds from
investing in Other Investments as
described in the application.
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28078
Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–13812 Filed 6–11–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60054; File No. SR–
NYSEArca-2009–45]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change To Adopt Rules To
Implement the Options Order
Protection and Locked/Crossed Market
Plan
June 5, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’)1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 20,
2009, the NYSE Arca, Inc. (‘‘NYSE
Arca’’ 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
prepared by the Exchange. 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 adopt rules
to implement the Options Order
Protection and Locked/Crossed Market
Plan (the ‘‘Plan’’), and to delete
provisions which will no longer be
applicable following adoption of the
Plan. The text of the proposed rule
change is available on the Exchange’s
Web site at https://www.nyse.com, at the
Exchange’s principal office and at the
Commission’s Public Reference Room.
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
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,
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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17:53 Jun 11, 2009
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of the most significant parts 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 adopt rules
to implement the Plan. These rules will
amend Rules 6.92 through 6.94 [sic] of
the Exchange’s rules in their entirety.
The proposed rules also will amend
various other rules to accommodate the
Plan.
Background to the plan and the
implementing rules. NYSE Arca filed
the current version of the Plan on
October 31, 2008.3 The Plan would
replace the current Plan for the Purpose
of Creating and Operating an
Intermarket Option Linkage (‘‘Old
Plan’’). The Old Plan requires its
participant exchanges to operate a
stand-alone system or ‘‘Linkage’’ for
sending order-flow between exchanges
to limit trade-throughs. The Options
Clearing Corporation (‘‘OCC’’) operates
the Linkage system. The Linkage rules
provide for unique types of Linkage
orders, with a complicated set of
requirements as to who may send such
orders and under what conditions.
While the Linkage largely has
operated satisfactorily, it is under
significant strain. When the
Commission approved the Old Plan in
2000, average daily volume (‘‘ADV’’) in
the options market was approximately
2.6 million contracts across all
exchanges. Now the ADV has increased
to more than 10 million contracts,
putting added strain on the ability of
market makers to comply with the
complex Linkage rules. At the same
time, the options markets have been
moving towards quoting in pennies, and
are quoting in pennies options
representing over half the total industry
volume. This greatly increases the
number of price changes in an option,
giving rise to greater chances of tradethroughs and missing markets as market
makers send Linkage orders and have to
wait for a response.
Experience in the equities markets
shows that there is a more efficient way
to provide price protection in options.
When first implemented, the Linkage
represented a vast improvement over
the then-current equities priceprotection system, which depended on
the operation of the Intermarket Trading
3 The October 3, 2008 filing was Amendment No.
3 to the Plan. NYSE Arca initially filed the Plan on
September 18, 2007, filed Amendment No. 1 on
December 10, 2007, and filed Amendment No. 2 on
April 17, 2008.
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System (‘‘ITS’’). The plan governing ITS
imposed long waiting times for filling
ITS commitments and a cumbersome
method for satisfying trade-throughs.
Learning from the shortcomings of ITS,
the options Linkage has shorter waiting
periods and more efficient trade-through
protections.
The equity price-protection
mechanisms have now leapfrogged the
options Linkage. By adopting Regulation
NMS in 2005 the Commission
effectively terminated ITS, replacing it
with a rules-based price-protection
system.4 The key to Regulation NMS’s
price-protection provisions is the
Intermarket Sweep Order, or ISO. Each
equity exchange must adopt rules
‘‘reasonably designed to prevent tradethroughs.’’ 5 Exempted from tradethrough liability is an ISO, which is an
order a member sends to an exchange
displaying a price inferior to the
national best bid and offer (‘‘NBBO’’),
while simultaneously sending orders to
trade against the full size of any other
exchange that is displaying the NBBO.6
The Regulation NMS rules-based
price-protection system is working well.
It requires neither a central linkage
mechanism nor a complex set of
operating rules. It also has eliminated
the need for achieving unanimity to
change even the most minor aspects of
a linkage mechanism. A simple
prohibition against most trade-throughs,
coupled with the ISO mechanism, has
given the equities markets a straightforward system to provide customers
with price protection in a fast-moving,
high-volume market that is quoted in
pennies. NYSE Arca and the other
options exchange participants in the
Plan intend for the Plan, and the
implementing rules, to bring the
efficiencies of Regulation NMS to the
options market.
Operation of the plan. The Plan
effectively would apply the Regulation
NMS price-protection provisions to the
options markets. Similar to Regulation
NMS, the Plan would require
participants to adopt rules ‘‘reasonably
designed to prevent Trade-Throughs,’’
while exempting ISOs from that
prohibition.7 The definition of an ISO is
essentially the same as under Regulation
NMS,8 and there are a number of
additional exceptions to the tradethrough prohibition. Like Regulation
NMS,9 the Plan requires participating
4 Release No. 34–51808 (June 9, 2005), 70 F.R.
37496 (June 29 2005).
5 Regulation NMS Rule 611(a).
6 Regulation NMS Rule 600(b)(30).
7 Sections 5(a)(i) and 5(b)(iv) of the Plan.
8 Section 2(9) of the Plan.
9 Regulation NMS Rule 611(c) and Section 5(c) of
the Plan.
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]]>Agencies
[Federal Register Volume 74, Number 112 (Friday, June 12, 2009)]
[Notices]
[Pages 28076-28078]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-13812]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 28760; File No. 812-13604]
PowerShares Exchange-Traded Fund Trust, et al.; Notice of
Application
June 8, 2009.
AGENCY: Securities and Exchange Commission.
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a)
under the Act.
-----------------------------------------------------------------------
Summary of Application: Applicants request an order to permit funds of
funds relying on rule 12d1-2 under the Act to invest in certain
financial instruments.
Applicants: PowerShares Exchange-Traded Fund Trust, PowerShares
Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund
Trust and PowerShares Actively Managed Exchange-Traded Fund Trust
(collectively, ``PowerShares Trusts''), AIM Counselor Series Trust, AIM
Equity Funds, AIM Funds Group, AIM Growth Series, AIM International
Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds,
AIM Sector Funds, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust,
AIM Variable Insurance Funds, and Short-Term Investments Trust
(collectively, ``AIM Trusts'' and together with PowerShares Trusts, the
``Trusts''), Invesco PowerShares Capital Management LLC (``IPCM'') and
Invesco Aim Advisors, Inc. (``IAA'') and Invesco Aim Distributors, Inc.
(the ``Distributor'').
DATES: Filing Dates: The application was filed on November 14, 2008,
and amended on May 26, 2009. 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 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 July 6, 2009 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.
[[Page 28077]]
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090; Applicants: PowerShares Trusts and
IPCM, 301 West Roosevelt Road, Wheaton, IL 60187, AIM Trusts, IAA, and
the Distributor, 11 Greenway Plaza, Suite 100, Houston, TX 77046.
FOR FURTHER INFORMATION CONTACT: Barbara Heussler, Senior Counsel, at
(202) 551-6990, or Jennifer L. Sawin, Branch Chief, 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 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.
Applicants' Representations
1. Each of PowerShares Exchange-Traded Fund Trust, PowerShares
Exchange-Traded Fund Trust II, and PowerShares India Exchange-Traded
Fund Trust is organized as a Massachusetts business trust. Each of the
other Trusts is organized as a Delaware statutory trust.
IPCM is a Delaware limited liability company and IAA is a Delaware
corporation; each is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and currently serves as an
investment adviser to existing series of the Trusts. The Distributor is
a Delaware corporation and is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (``Exchange Act''). The
Distributor serves as the distributor of existing series of the Trusts.
2. Applicants request the exemption to the extent necessary to
permit any existing or future registered open-end management investment
company or series thereof that (a) is advised by IPCM, IAA or any
entity controlling, controlled by or under common control with either
of them (each, an ``Adviser''), (b) is in the same group of investment
companies as defined in section 12(d)(1)(G) of the Act, (c) invests in
shares of other registered open-end investment companies (``Underlying
Funds'') in reliance on section 12(d)(1)(G) of the Act, and (d) is also
eligible to invest in securities (as defined in section 2(a)(36) of the
Act) in reliance on rule 12d1-2 under the Act (each, a ``Fund of
Funds''), to also invest, to the extent consistent with its investment
objective, policies, strategies and limitations, in financial
instruments that may not be securities within the meaning of section
2(a)(36) of the Act (``Other Investments'').\1\ Applicants state that
all Funds of Funds and Underlying Funds are or will be registered with
the Commission as open-end management investment companies.
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\1\ Every existing entity that currently intends to rely on the
requested order is named as an applicant. Any existing or future
entity that relies on the order in the future will do so only in
accordance with the terms and conditions in the application.
---------------------------------------------------------------------------
3. Consistent with its fiduciary obligations under the Act, each
Fund of Fund's board of trustees or directors will review the advisory
fees charged by the Fund of Fund's investment adviser to ensure that
they are based on services provided that are in addition to, rather
than duplicative of, services provided pursuant to the advisory
agreement of any investment company in which the Fund may invest.
Applicants' Legal Analysis
1. Section 12(d)(1)(A) of the Act provides that no registered
investment company (``acquiring company'') may acquire securities of
another investment company (``acquired company'') if such securities
represent more than 3% of the acquired company's outstanding voting
stock or more than 5% of the acquiring company's total assets, or if
such securities, together with the securities of other investment
companies, represent more than 10% of the acquiring company's total
assets. Section 12(d)(1)(B) of the Act provides that no registered
open-end investment company may sell its securities to another
investment company if the sale will cause the acquiring company to own
more than 3% of the acquired company's voting stock, or cause more than
10% of the acquired company's voting stock to be owned by investment
companies and companies controlled by them.
2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1)
will not apply to securities of an acquired company purchased by an
acquiring company if: (i) The acquired company and acquiring company
are part of the same group of investment companies; (ii) the acquiring
company holds only securities of acquired companies that are part of
the same group of investment companies, government securities, and
short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not
excessive under rules adopted pursuant to section 22(b) or section
22(c) of the Act by a securities association registered under section
15A of the Exchange Act or by the Commission; and (iv) the acquired
company has a policy that prohibits it from acquiring securities of
registered open-end investment companies or registered unit investment
trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
3. Rule 12d1-2 under the Act permits a registered open-end
investment company or a registered unit investment trust that relies on
section 12(d)(1)(G) of the Act to acquire, in addition to securities
issued by another registered investment company in the same group of
investment companies, government securities, and short-term paper: (1)
Securities issued by an investment company that is not in the same
group of investment companies, when the acquisition is in reliance on
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other
than securities issued by an investment company); and (3) securities
issued by a money market fund, when the investment is in reliance on
rule 12d1-1 under the Act. For the purposes of rule 12d1-2,
``securities'' means any security as defined in section 2(a)(36) of the
Act.
4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction from any provision of the Act, or
from any rule under 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 policies and
provisions of the Act.
5. Applicants state that the proposed arrangement would comply with
the provisions of rule 12d1-2 under the Act, but for the fact that the
Funds may invest a portion of their assets in Other Investments.
Applicants request an order under section 6(c) of the Act for an
exemption from rule 12d1-2(a) to allow the Funds to invest in Other
Investments. Applicants assert that permitting the Funds to invest in
Other Investments as described in the application would not raise any
of the concerns that the requirements of section 12(d)(1) were designed
to address.
Applicants' Condition
Applicants agree that the order granting the requested relief will
be subject to the following condition:
Applicants will comply with all provisions of rule 12d1-2 under the
Act, except for paragraph (a)(2) to the extent that it restricts any
Fund of Funds from investing in Other Investments as described in the
application.
[[Page 28078]]
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13812 Filed 6-11-09; 8:45 am]
BILLING CODE 8010-01-P
