The Integrity Funds, et al.; Notice of Application, 53355-53357 [2010-21625]
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Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices
Postal Operators, and the related rates
and classifications, respectively. In
keeping with existing practice, these
dockets are addressed on a consolidated
basis for purposes of this Order;
however, future filings should be made
in the specific docket in which issues
being addressed pertain.
Interested persons may submit
comments on whether the Postal
Service’s filings in the captioned
dockets are consistent with the policies
of 39 U.S.C. 3632, 3633, or 3642, 39 CFR
part 3015, and 39 CFR 3020 subpart B.
Comments are due no later than August
31, 2010. The public portions of these
filings can be accessed via the
Commission’s Web site (https://
www.prc.gov.)
The Commission appoints Paul L.
Harrington to serve as Public
Representative in these dockets.
III. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket
Nos. MC2010–35, R2010–5 and R2010–
6 for consideration of the issues raised
in this docket.
2. Comments by interested persons in
these proceedings are due no later than
August 31, 2010.
3. Pursuant to 39 U.S.C. 505, Paul L.
Harrington is appointed to serve as
officer of the Commission (Public
Representative) to represent the interest
of the general public in these
proceedings.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
former U.S. Army base known as the
Presidio, in San Francisco, California.
The purposes of this meeting are to
swear in new Board members, to
approve minutes of a previous Board
meeting, to elect Board officers, to
provide an Executive Director’s report
and status reports on environmental
remediation, the Public Health Service
District, Doyle Drive and the Main Post,
to receive a report on the provision of
fire services to the Presidio by the City
of San Francisco, to receive reports from
the National Park Service and the
Golden Gate National Parks
Conservancy, to provide a preview of
the Trust’s fiscal year 2011 projects, and
to receive public comment on other
matters in accordance with the Trust’s
Public Outreach Policy.
Individuals requiring special
accommodation at this meeting, such as
needing a sign language interpreter,
should contact Mollie Matull at 415–
561–5300 prior to September 13, 2010.
Time: The meeting will begin at 6:30
p.m. on Wednesday, September 22,
2010.
The meeting will be held at
the Golden Gate Club, 135 Fisher Loop,
Presidio of San Francisco.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Karen Cook, General Counsel, the
Presidio Trust, 34 Graham Street, P.O.
Box 29052, San Francisco, California
94129–0052, Telephone: 415–561–5300.
Dated: August 24, 2010.
Karen A. Cook,
General Counsel.
[FR Doc. 2010–21576 Filed 8–30–10; 8:45 am]
By the Commission.
Shoshana M. Grove,
Secretary.
BILLING CODE 4310–4R–P
[FR Doc. 2010–21693 Filed 8–30–10; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
BILLING CODE 7710–FW–S
[Investment Company Act Release No.
29399; File No. 812–13763]
PRESIDIO TRUST
The Integrity Funds, et al.; Notice of
Application
Notice of Public Meeting
The Presidio Trust.
Notice of public meeting.
AGENCY:
August 25, 2010.
ACTION:
AGENCY:
In accordance with § 103(c)(6)
of the Presidio Trust Act, 16 U.S.C.
460bb appendix, and in accordance
with the Presidio Trust’s bylaws, notice
is hereby given that a public meeting of
the Presidio Trust Board of Directors
will be held commencing 6:30 p.m. on
Wednesday, September 22, 2010, at the
Golden Gate Club, 135 Fisher Loop,
Presidio of San Francisco, California.
The Presidio Trust was created by
Congress in 1996 to manage
approximately eighty percent of the
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SUMMARY:
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Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application under
section 6(c) of the Investment Company
Act of 1940 (the ‘‘Act’’) for an exemption
from section 15(a) of the Act and rule
18f–2 under the Act.
Summary of Application: The
requested order would permit certain
registered open-end management
investment companies to enter into and
materially amend subadvisory
agreements without shareholder
approval.
SUMMARY:
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53355
The Integrity Funds
(‘‘Integrity Funds’’), Integrity Managed
Portfolios (‘‘Managed Portfolios’’),
Integrity Fund of Funds, Inc. (‘‘Fund of
Funds’’), Viking Mutual Funds (‘‘Viking
Funds’’) (each, a ‘‘Mutual Fund’’ and
collectively, the ‘‘Mutual Funds’’), and
Viking Fund Management, LLC (the
‘‘Adviser’’).
APPLICANTS:
Filing Dates: The application was
filed on March 30, 2010, and amended
on August 10, 2010.
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 20, 2010 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
reasons 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, Viking Fund
Management, LLC, 1 Main Street North,
Minot, North Dakota 58703.
FOR FURTHER INFORMATION CONTACT:
Keith A. Gregory, Senior Counsel at
(202) 551–6815, or Mary Kay Frech,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
DATES:
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.
SUPPLEMENTARY INFORMATION:
Applicants’ Representations
1. Each Mutual Fund is registered
under the Act as an open-end
management investment company.
Integrity Funds is organized as a
Delaware statutory trust and currently
offers three series (each, a ‘‘Fund’’ and
collectively, the ‘‘Funds’’), each with its
own distinct investment objectives,
policies and restrictions. Managed
Portfolios is organized as a
Massachusetts business trust and
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Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices
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currently offers six Funds, each with its
own distinct investment objectives,
policies and restrictions. Fund of Funds
is organized as a North Dakota
corporation and currently does not
operate as a series company (included
in the term ‘‘Funds’’). Viking Funds is
organized as a Delaware statutory trust
and currently offers four Funds, each
with its own distinct investment
objectives, policies and restrictions.1
2. The Adviser, a North Dakota
limited liability company, is registered
as an investment adviser under the
Investment Advisers Act of 1940
(‘‘Advisers Act’’). The Adviser is a
wholly-owned subsidiary of Corridor
Investors, LLC. The Adviser serves as
investment adviser to each Fund under
an investment advisory agreement
(each, an ‘‘Advisory Agreement’’) that
has been approved by the shareholders
of each Fund and by the board of
directors or trustees of the Mutual
Funds (‘‘Board’’), including a majority of
the directors or trustees who are not
‘‘interested persons,’’ as defined in
section 2(a)(19) of the Act, of a Mutual
Fund, the Adviser, or the Subadvisers
(‘‘Independent Board Members’’).2
3. Under the terms of each Fund’s
Advisory Agreement, the Adviser
provides a continuous investment
program for the Fund consistent with
the investment objectives, policies and
limitations of the Fund. For its services,
the Adviser receives a fee from each
Fund specified in the relevant Advisory
Agreement. Under each Advisory
Agreement, the Adviser may enter into
investment subadvisory agreements
with one or more subadvisers
(‘‘Subadvisers’’) who have discretionary
1 Applicants also request relief with respect to
future Funds and any other existing or future
registered open-end management investment
company or series thereof that: (a) Is advised by the
Adviser or any entity controlling, controlled by, or
under common control with the Adviser (included
in the term ‘‘Adviser’’); (b) uses the manager of
managers structure described in the application;
and (c) complies with the terms and conditions of
the application (included in the term ‘‘Funds’’). The
only existing registered open-end management
investment companies that currently intend to rely
on the requested order are named as applicants. If
the name of any Fund contains the name of a
Subadviser (as defined below), the name of the
Adviser will precede the name of the Subadviser.
2 Under a prior order, the Commission granted
relief to The Integrity Funds and Integrity Money
Management, Inc., a wholly owned subsidiary of
Integrity Mutual Funds, Inc. (‘‘Integrity Mutual
Funds’’) from the provisions of section 15(a) of the
Act and rule 18f–2 under the Act similar to that
requested in the Application. The Integrity Funds,
et al., Investment Company Act Release Nos. 27144
(Nov. 10, 2005)(notice) and 27180 (Dec. 6,
2005)(order). On July 31, 2009, Integrity Mutual
Funds generally sold its mutual fund services
business to Corridor and the Adviser. In 2009, the
existing shareholders of the Funds approved the
Advisory Agreements, the existing Subadvisory
Agreements and the manager of managers structure.
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authority to invest all or a portion of the
Fund’s assets pursuant to a separate
subadvisory agreement (‘‘Subadvisory
Agreement’’). The Adviser will evaluate,
allocate assets to, and oversee
Subadvisers, and recommend to the
Board their hiring, termination and
replacement. Each Subadviser is or will
be an investment adviser registered
under the Advisers Act. For its services
to a Fund, the Adviser pays each
Subadviser a monthly fee out of the fee
paid to the Adviser by the Fund.
4. Applicants request an order to
permit the Adviser, subject to Board
approval, to enter into and materially
amend Subadvisory Agreements
without obtaining shareholder approval.
The requested relief will not extend to
any Subadviser who is an affiliated
person, as defined in section 2(a)(3) of
the Act, of a Fund or the Adviser (other
than by reason of serving as a
Subadviser to one or more of the Funds)
(‘‘Affiliated Subadviser’’).
Applicants’ Legal Analysis
1. Section 15(a) of the Act provides,
in relevant part, that it is unlawful for
any person to act as an investment
adviser to a registered investment
company except pursuant to a written
contract that has been approved by the
vote of a majority of the company’s
outstanding voting securities. Rule 18f–
2 under the Act provides that each
series or class of stock in a series
company affected by a matter must
approve such matter if the Act requires
shareholder approval.
2. 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 provision of the
Act, or from any rule thereunder, if and
to the extent that such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policy and
provisions of the Act. Applicants
believe that the requested relief meets
this standard for the reasons discussed
below.
3. Applicants state that the
shareholders rely on the Adviser’s
experience to select one or more
Subadvisers best suited to achieve the
Fund’s investment objectives.
Applicants assert that, from the
perspective of the investor, the role of
the Subadvisers is substantially
equivalent to that of the individual
portfolio managers employed by
traditional investment company
advisory firms. Applicants contend that
requiring shareholder approval of
Subadvisory Agreements would impose
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costs and unnecessary delays on the
Funds and may preclude the Adviser
and the Board from acting promptly
when a change in Subadvisers would
benefit a Fund. Applicants note that
each Advisory Agreement and any
Subadvisory Agreement with an
Affiliated Subadviser will remain
subject to the shareholder approval
requirements of section 15(a) and rule
18f–2 under the Act.
Applicants’ Conditions
Applicants agree that any order
granting the requested relief shall be
subject to the following conditions:
1. Before a Fund may rely on the
order requested in the application, the
operation of the Fund in the manner
described in the application will be
approved by a majority of the Fund’s
outstanding voting securities, as defined
in the Act, or in the case of a Fund
whose public shareholders purchase
shares on the basis of a prospectus
containing the disclosure contemplated
by condition 2 below, by the initial
shareholder(s) before offering shares of
that Fund to the public.
2. Each Fund that relies on the
requested order will disclose in its
prospectus the existence, substance, and
effect of any order granted pursuant to
the application. In addition, each Fund
will hold itself out to the public as
employing the manager of managers
structure described in the application.
The prospectus will prominently
disclose that the Adviser has the
ultimate responsibility (subject to
oversight by the Board) to oversee the
Subadvisers and to recommend their
hiring, termination and replacement.
3. At all times, at least a majority of
the Board will be Independent Board
Members, and the nomination of new or
additional Independent Board Members
will be placed within the discretion of
the then-existing Independent Board
Members.
4. The Adviser will not enter into a
Subadvisory Agreement with any
Affiliated Subadviser without that
agreement, including the compensation
to be paid thereunder, being approved
by the shareholders of the applicable
Fund.
5. When a Subadviser change is
proposed for a Fund with an Affiliated
Subadviser, the Board, including a
majority of the Independent Board
Members, will make a separate finding,
reflected in the Board minutes, that the
change is in the best interests of the
Fund and its shareholders and does not
involve a conflict of interest from which
the Adviser or the Affiliated Subadviser
derives an inappropriate advantage.
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6. Within 90 days of the hiring of any
new Subadviser, shareholders of the
affected Fund will be furnished all
information about the new Subadviser
that would be included in a proxy
statement. To meet this condition, each
affected Fund will provide shareholders
with an information statement meeting
the requirements of Regulation 14C,
Schedule 14C and Item 22 of Schedule
14A under the 1934 Act.
7. The Adviser will provide general
management services to each Fund,
including overall supervisory
responsibility for the general
management and investment of each
Fund’s assets, and, subject to the review
and approval by the Board, will: (i) Set
each Fund’s overall investment
strategies; (ii) evaluate, select and
recommend Subadvisers to manage all
or part of each Fund’s assets; (iii) when
appropriate, allocate and reallocate each
applicable Fund’s assets among
multiple Subadvisers; (iv) monitor and
evaluate the performance of
Subadvisers; and (v) implement
procedures reasonably designed to
ensure that the Subadvisers comply
with each Fund’s investment objective,
policies and restrictions.
8. No Board Member or officer of a
Mutual Fund, or director or officer of
the Adviser will own directly or
indirectly (other than through a pooled
investment vehicle that is not controlled
by such person), any interest in a
Subadviser except for: (i) Ownership of
interests in the Adviser or any entity
that controls, is controlled by, or under
common control with the Adviser; or (ii)
ownership of less than 1% of the
outstanding securities of any class of
equity or debt of a publicly-traded
company that is either a Subadviser or
an entity that controls, is controlled by,
or is under common control with a
Subadviser.
9. In the event that the Commission
adopts a rule under the Act providing
substantially similar relief to that in the
order requested in the application, the
requested order will expire on the
effective date of that rule.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–21625 Filed 8–30–10; 8:45 am]
BILLING CODE 8010–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
29400; File No. 812–13775]
Aston Funds, et al.; Notice of
Application
August 26, 2010.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 12(d)(1)(J) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
12(d)(1)(A) and (B) of the Act, under
sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and (2)
of the Act, and under section 6(c) of the
Act for an exemption from rule 12d1–
2(a) under the Act.
AGENCY:
53357
Julia
Kim Gilmer, Branch Chief, at (202) 551–
16821 (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 for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm, or by
calling (202) 551–8090.
FOR FURTHER INFORMATION CONTACT:
Applicants’ Representations
1. The Trust is an open-end
management investment company
registered under the Act and organized
as a Delaware statutory trust. The Trust
is comprised of separate series (‘‘Funds’’)
that pursue distinct investment
SUMMARY:
objectives and strategies.1 Certain Funds
Summary of the Application: The
currently pursue their investment
requested order would (a) permit certain
objectives by investing primarily in
registered open-end management
other investment companies, including
investment companies that operate as
exchange-traded funds, in reliance on
‘‘funds of funds’’ to acquire shares of
certain registered open-end management Section 12(d)(1)(F) of the Act. The
Adviser, a Delaware limited
investment companies and unit
partnership, is registered as an
investment trusts (‘‘UITs’’) that are
investment adviser under the
within and outside the same group of
Investment Advisers Act of 1940
investment companies as the acquiring
(‘‘Advisers Act’’) and serves as
investment companies, and (b) permit
investment adviser for each of the
funds of funds relying on rule 12d1–2
Funds.
under the Act to invest in certain
2. Applicants request an order to
financial instruments.
permit (a) a Fund that operates as a
Applicants: Aston Funds (‘‘Trust’’)
‘‘fund of funds’’ (each a ‘‘Fund of
and Aston Asset Management, LP
Funds’’) to acquire shares of (i)
(‘‘Adviser’’).
registered open-end management
DATES:
investment companies that are not part
Filing Dates: The application was
filed on May 21, 2010, and amended on of the same ‘‘group of investment
companies,’’ within the meaning of
August 11, 2010, and August 16, 2010.
Hearing or Notification of Hearing: An section 12(d)(1)(G)(ii) of the Act, as the
Fund of Funds (‘‘Unaffiliated Investment
order granting the application will be
Companies’’) and UITs that are not part
issued unless the Commission orders a
hearing. Interested persons may request of the same group of investment
companies as the Fund of Funds
a hearing by writing to the
(‘‘Unaffiliated Trusts,’’ together with the
Commission’s Secretary and serving
Unaffiliated Investment Companies,
applicants with a copy of the request,
‘‘Unaffiliated Funds’’) 2 or (ii) registered
personally or by mail. Hearing requests
open-end management companies or
should be received by the Commission
UITs that are part of the same group of
by 5:30 p.m. on September 20, 2010,
investment companies as the Fund of
and should be accompanied by proof of
Funds (collectively, ‘‘Affiliated Funds,’’
service on applicants, in the form of an
affidavit or, for lawyers, a certificate of
1 Applicants request that the relief apply to each
service. Hearing requests should state
existing and future Fund and to each existing and
the nature of the writer’s interest, the
future registered open-end management investment
reason for the request, and the issues
company or series thereof that is advised by the
Adviser or any entity controlling, controlled by or
contested. Persons who wish to be
under common control with the Adviser and which
notified of a hearing may request
is part of the same group of investment companies
notification by writing to the
(as defined in section 12(d)(1)(G)(ii)) as the Trust
Commission’s Secretary.
(included in the term ‘‘Funds’’).
2 Certain of the Unaffiliated Funds may be
ADDRESSES: Secretary, U.S. Securities
registered under the Act as either UITs or open-end
and Exchange Commission, 100 F
management investment companies and have
Street, NE., Washington, DC 20549–
received exemptive relief to permit their shares to
1090. Applicants: 120 N. LaSalle Street, be listed and traded on a national securities
exchange at negotiated prices (‘‘ETFs’’).
25th Floor, Chicago, Illinois 60602.
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]]>Agencies
[Federal Register Volume 75, Number 168 (Tuesday, August 31, 2010)]
[Notices]
[Pages 53355-53357]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-21625]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 29399; File No. 812-13763]
The Integrity Funds, et al.; Notice of Application
August 25, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (the ``Act'') for an exemption from section 15(a)
of the Act and rule 18f-2 under the Act.
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SUMMARY: Summary of Application: The requested order would permit
certain registered open-end management investment companies to enter
into and materially amend subadvisory agreements without shareholder
approval.
Applicants: The Integrity Funds (``Integrity Funds''), Integrity
Managed Portfolios (``Managed Portfolios''), Integrity Fund of Funds,
Inc. (``Fund of Funds''), Viking Mutual Funds (``Viking Funds'') (each,
a ``Mutual Fund'' and collectively, the ``Mutual Funds''), and Viking
Fund Management, LLC (the ``Adviser'').
DATES: Filing Dates: The application was filed on March 30, 2010, and
amended on August 10, 2010.
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 20, 2010 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 reasons 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, Viking Fund
Management, LLC, 1 Main Street North, Minot, North Dakota 58703.
FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel at
(202) 551-6815, or Mary Kay Frech, 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 Mutual Fund is registered under the Act as an open-end
management investment company. Integrity Funds is organized as a
Delaware statutory trust and currently offers three series (each, a
``Fund'' and collectively, the ``Funds''), each with its own distinct
investment objectives, policies and restrictions. Managed Portfolios is
organized as a Massachusetts business trust and
[[Page 53356]]
currently offers six Funds, each with its own distinct investment
objectives, policies and restrictions. Fund of Funds is organized as a
North Dakota corporation and currently does not operate as a series
company (included in the term ``Funds''). Viking Funds is organized as
a Delaware statutory trust and currently offers four Funds, each with
its own distinct investment objectives, policies and restrictions.\1\
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\1\ Applicants also request relief with respect to future Funds
and any other existing or future registered open-end management
investment company or series thereof that: (a) Is advised by the
Adviser or any entity controlling, controlled by, or under common
control with the Adviser (included in the term ``Adviser''); (b)
uses the manager of managers structure described in the application;
and (c) complies with the terms and conditions of the application
(included in the term ``Funds''). The only existing registered open-
end management investment companies that currently intend to rely on
the requested order are named as applicants. If the name of any Fund
contains the name of a Subadviser (as defined below), the name of
the Adviser will precede the name of the Subadviser.
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2. The Adviser, a North Dakota limited liability company, is
registered as an investment adviser under the Investment Advisers Act
of 1940 (``Advisers Act''). The Adviser is a wholly-owned subsidiary of
Corridor Investors, LLC. The Adviser serves as investment adviser to
each Fund under an investment advisory agreement (each, an ``Advisory
Agreement'') that has been approved by the shareholders of each Fund
and by the board of directors or trustees of the Mutual Funds
(``Board''), including a majority of the directors or trustees who are
not ``interested persons,'' as defined in section 2(a)(19) of the Act,
of a Mutual Fund, the Adviser, or the Subadvisers (``Independent Board
Members'').\2\
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\2\ Under a prior order, the Commission granted relief to The
Integrity Funds and Integrity Money Management, Inc., a wholly owned
subsidiary of Integrity Mutual Funds, Inc. (``Integrity Mutual
Funds'') from the provisions of section 15(a) of the Act and rule
18f-2 under the Act similar to that requested in the Application.
The Integrity Funds, et al., Investment Company Act Release Nos.
27144 (Nov. 10, 2005)(notice) and 27180 (Dec. 6, 2005)(order). On
July 31, 2009, Integrity Mutual Funds generally sold its mutual fund
services business to Corridor and the Adviser. In 2009, the existing
shareholders of the Funds approved the Advisory Agreements, the
existing Subadvisory Agreements and the manager of managers
structure.
---------------------------------------------------------------------------
3. Under the terms of each Fund's Advisory Agreement, the Adviser
provides a continuous investment program for the Fund consistent with
the investment objectives, policies and limitations of the Fund. For
its services, the Adviser receives a fee from each Fund specified in
the relevant Advisory Agreement. Under each Advisory Agreement, the
Adviser may enter into investment subadvisory agreements with one or
more subadvisers (``Subadvisers'') who have discretionary authority to
invest all or a portion of the Fund's assets pursuant to a separate
subadvisory agreement (``Subadvisory Agreement''). The Adviser will
evaluate, allocate assets to, and oversee Subadvisers, and recommend to
the Board their hiring, termination and replacement. Each Subadviser is
or will be an investment adviser registered under the Advisers Act. For
its services to a Fund, the Adviser pays each Subadviser a monthly fee
out of the fee paid to the Adviser by the Fund.
4. Applicants request an order to permit the Adviser, subject to
Board approval, to enter into and materially amend Subadvisory
Agreements without obtaining shareholder approval. The requested relief
will not extend to any Subadviser who is an affiliated person, as
defined in section 2(a)(3) of the Act, of a Fund or the Adviser (other
than by reason of serving as a Subadviser to one or more of the Funds)
(``Affiliated Subadviser'').
Applicants' Legal Analysis
1. Section 15(a) of the Act provides, in relevant part, that it is
unlawful for any person to act as an investment adviser to a registered
investment company except pursuant to a written contract that has been
approved by the vote of a majority of the company's outstanding voting
securities. Rule 18f-2 under the Act provides that each series or class
of stock in a series company affected by a matter must approve such
matter if the Act requires shareholder approval.
2. 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 provision of the Act, or
from any rule thereunder, if and to the extent that such exemption is
necessary or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act. Applicants believe that the requested relief
meets this standard for the reasons discussed below.
3. Applicants state that the shareholders rely on the Adviser's
experience to select one or more Subadvisers best suited to achieve the
Fund's investment objectives. Applicants assert that, from the
perspective of the investor, the role of the Subadvisers is
substantially equivalent to that of the individual portfolio managers
employed by traditional investment company advisory firms. Applicants
contend that requiring shareholder approval of Subadvisory Agreements
would impose costs and unnecessary delays on the Funds and may preclude
the Adviser and the Board from acting promptly when a change in
Subadvisers would benefit a Fund. Applicants note that each Advisory
Agreement and any Subadvisory Agreement with an Affiliated Subadviser
will remain subject to the shareholder approval requirements of section
15(a) and rule 18f-2 under the Act.
Applicants' Conditions
Applicants agree that any order granting the requested relief shall
be subject to the following conditions:
1. Before a Fund may rely on the order requested in the
application, the operation of the Fund in the manner described in the
application will be approved by a majority of the Fund's outstanding
voting securities, as defined in the Act, or in the case of a Fund
whose public shareholders purchase shares on the basis of a prospectus
containing the disclosure contemplated by condition 2 below, by the
initial shareholder(s) before offering shares of that Fund to the
public.
2. Each Fund that relies on the requested order will disclose in
its prospectus the existence, substance, and effect of any order
granted pursuant to the application. In addition, each Fund will hold
itself out to the public as employing the manager of managers structure
described in the application. The prospectus will prominently disclose
that the Adviser has the ultimate responsibility (subject to oversight
by the Board) to oversee the Subadvisers and to recommend their hiring,
termination and replacement.
3. At all times, at least a majority of the Board will be
Independent Board Members, and the nomination of new or additional
Independent Board Members will be placed within the discretion of the
then-existing Independent Board Members.
4. The Adviser will not enter into a Subadvisory Agreement with any
Affiliated Subadviser without that agreement, including the
compensation to be paid thereunder, being approved by the shareholders
of the applicable Fund.
5. When a Subadviser change is proposed for a Fund with an
Affiliated Subadviser, the Board, including a majority of the
Independent Board Members, will make a separate finding, reflected in
the Board minutes, that the change is in the best interests of the Fund
and its shareholders and does not involve a conflict of interest from
which the Adviser or the Affiliated Subadviser derives an inappropriate
advantage.
[[Page 53357]]
6. Within 90 days of the hiring of any new Subadviser, shareholders
of the affected Fund will be furnished all information about the new
Subadviser that would be included in a proxy statement. To meet this
condition, each affected Fund will provide shareholders with an
information statement meeting the requirements of Regulation 14C,
Schedule 14C and Item 22 of Schedule 14A under the 1934 Act.
7. The Adviser will provide general management services to each
Fund, including overall supervisory responsibility for the general
management and investment of each Fund's assets, and, subject to the
review and approval by the Board, will: (i) Set each Fund's overall
investment strategies; (ii) evaluate, select and recommend Subadvisers
to manage all or part of each Fund's assets; (iii) when appropriate,
allocate and reallocate each applicable Fund's assets among multiple
Subadvisers; (iv) monitor and evaluate the performance of Subadvisers;
and (v) implement procedures reasonably designed to ensure that the
Subadvisers comply with each Fund's investment objective, policies and
restrictions.
8. No Board Member or officer of a Mutual Fund, or director or
officer of the Adviser will own directly or indirectly (other than
through a pooled investment vehicle that is not controlled by such
person), any interest in a Subadviser except for: (i) Ownership of
interests in the Adviser or any entity that controls, is controlled by,
or under common control with the Adviser; or (ii) ownership of less
than 1% of the outstanding securities of any class of equity or debt of
a publicly-traded company that is either a Subadviser or an entity that
controls, is controlled by, or is under common control with a
Subadviser.
9. In the event that the Commission adopts a rule under the Act
providing substantially similar relief to that in the order requested
in the application, the requested order will expire on the effective
date of that rule.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-21625 Filed 8-30-10; 8:45 am]
BILLING CODE 8010-01-P
