ASGI Agility Income Fund, et al.; Notice of Application, 59456-59458 [2011-24589]

Download as PDF 59456 Federal Register / Vol. 76, No. 186 / Monday, September 26, 2011 / Notices jlentini on DSK4TPTVN1PROD with NOTICES 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 the Adviser for Fund assets managed by the Adviser. 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 requested order, 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 relying 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 utilizing the Manager of Managers Structure. 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. Within 90 days of the hiring of a new Subadviser, shareholders of the affected Fund will be furnished all information about the new Subadviser VerDate Mar<15>2010 17:37 Sep 23, 2011 Jkt 223001 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. 4. The Adviser will not enter into a subadvisory agreement with any Affiliated Subadviser without such agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Fund. 5. At all times, at least a majority of the Board will be Independent Trustees, and the nomination of new or additional Independent Trustees will be placed within the discretion of the thenexisting Independent Trustees. 6. Whenever a subadviser change is proposed for a Fund with an Affiliated Subadviser, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that such 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. 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: (a) Set each Fund’s overall investment strategies; (b) evaluate, select and recommend Subadvisers to manage all or part of each Fund’s assets; (c) allocate and, when appropriate, reallocate each Fund’s assets among one or more Subadvisers; (d) monitor and evaluate the performance of Subadvisers; and (e) implement procedures reasonably designed to ensure that the Subadvisers comply with each Fund’s investment objective, policies and restrictions. 8. No trustee or officer of the Trust or the Fund, or director, manager 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: (a) Ownership of interests in the Adviser or any entity that controls, is controlled by, or is under common control with the Adviser; or (b) ownership of less than 1% of the outstanding securities of any class of equity or debt of any publiclytraded company that is either a Subadviser or an entity that controls, is controlled by, or is under common control with a Subadviser. 9. For Funds that pay subadvisory fees directly from Fund assets, any PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 changes to a Subadvisory Agreement that would result in an increase in the total management and advisory fees payable by a Fund will be required to be approved by the shareholders of that Fund. 10. 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. Dated: September 19, 2011. Elizabeth M. Murphy, Secretary. [FR Doc. 2011–24590 Filed 9–23–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 29793; 812–13866] ASGI Agility Income Fund, et al.; Notice of Application September 19, 2011. 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 sections 18(c) and 18(i) of the Act and for an order pursuant to section 17(d) of the Act and rule 17d– 1 under the Act. AGENCY: Applicants request an order to permit certain registered closed-end management investment companies to issue multiple classes of shares and to impose assetbased distribution and service fees and contingent deferred sales loads (‘‘CDSCs’’). APPLICANTS: ASGI Agility Income Fund (‘‘Agility Fund’’), ASGI Aurora Opportunities Fund, LLC (‘‘Aurora Fund’’), and ASGI Corbin Multi-Strategy Fund, LLC (‘‘Corbin Fund’’) (each a ‘‘Fund’’ and collectively, the ‘‘Funds’’), Alternative Strategies Group, Inc. (the ‘‘Adviser’’) and Alternative Strategies Brokerage Services, Inc. (the ‘‘Placement Agent’’). FILING DATES: The application was filed on February 8, 2011, and amended on June 24, 2011 and September 16, 2011. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving SUMMARY OF APPLICATION: E:\FR\FM\26SEN1.SGM 26SEN1 jlentini on DSK4TPTVN1PROD with NOTICES Federal Register / Vol. 76, No. 186 / Monday, September 26, 2011 / Notices 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 October 14, 2011, and should be accompanied by proof of service on the 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, c/o Lloyd Lipsett, Esq., Wells Fargo Law Department, 200 Berkeley Street, Boston, MA 02116. FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at (202) 551–6811 or Daniele Marchesani, 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 http:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicants’ Representations: 1. Each Fund is a continuously offered non-diversified closed-end management investment company registered under the Act. The Agility Fund is organized as a Delaware statutory trust. The Aurora Fund and the Corbin Fund are each organized as a Delaware limited liability company. The Adviser serves as investment adviser to each Fund. The Placement Agent, a broker-dealer registered under the Securities Exchange Act of 1934 (‘‘1934 Act’’), acts as principal underwriter for the Funds. The Placement Agent is under common control with the Adviser and is an affiliated person, as defined in section 2(a)(3) of the Act, of the Adviser. 2. Each Fund continuously offers its shares (‘‘Shares’’) in private placements in reliance on the provisions of Regulation D under the Securities Act of 1933. The Shares are not offered or traded in a secondary market and are not listed on any securities exchange or quoted on any quotation medium. Applicants do not expect that any secondary market will ever develop for the Shares. 3. Each Fund currently offers an initial class of Shares (‘‘Initial Class’’) at VerDate Mar<15>2010 17:37 Sep 23, 2011 Jkt 223001 net asset value and proposes to offer multiple classes of Shares. Each Fund may offer a new Share class at net asset value and may also charge a front-end sales load and an annual service and/or distribution fee. The Funds intend to continue to offer Initial Class Shares at net asset value without a sales load, subject to minimum purchase requirements. The Funds may in the future offer additional classes of shares and/or another sales charge structure. The Funds do not plan to offer exchange privileges. 4. In order to provide a limited degree of liquidity to Shareholders, the Funds may from time to time offer to repurchase Shares at net asset value in accordance with rule 13e-4 under the 1934 Act pursuant to written tenders by Shareholders (‘‘Repurchases’’).1 A Fund will Repurchase Shares at the times, in the amounts and on the terms as may be determined by the Board of Trustees (‘‘Board’’) of the Fund in its sole discretion. The Adviser expects to recommend ordinarily that the Board authorize each Fund to offer to Repurchase Shares from Shareholders quarterly. 5. Applicants request that the order also apply to any other continuously offered registered closed-end management investment companies existing now or in the future for which the Adviser, the Placement Agent, or any entity controlling, controlled by or under common control with the Adviser or the Placement Agent acts as investment adviser or principal underwriter, and which provides periodic liquidity with respect to its Shares pursuant to rule 13e–4 under the 1934 Act (such investment companies, together with the Funds, the ‘‘Funds’’).2 6. Applicants represent that any assetbased service and distribution fees will comply with the provisions of rule 2830(d) of the Conduct Rules of the National Association of Securities Dealers, Inc. (‘‘NASD Conduct Rule 2830’’).3 Applicants also represent that 1 Shares are subject to a repurchase fee if the interval between the date of initial purchase and the valuation date with respect to the Repurchase of such Shares under the tender offer is, with respect to the Agility Fund and the Aurora Fund, less than one year, and, with respect to the Corbin Fund, less than 180 days. To the extent the Funds determine to waive, impose scheduled variations of, or eliminate a repurchase fee, each Fund will do it consistent with the requirements of Rule 22d-1 under the Act as if the repurchase fee were a CDSC and apply any such change uniformly to all Shareholders of the Fund. 2 Any Fund relying on this relief in the future will do so in a manner consistent with the terms and conditions of the application. Applicants represent that any person presently intending to rely on the requested relief is listed as an applicant. 3 All references to NASD Conduct Rule 2830 include any successor or replacement rule that may PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 59457 each Fund will disclose in its private placement memorandum, the fees, expenses and other characteristics of each class of Shares offered for sale by the memorandum as is required for open-end multiple class funds under Form N–1A. Each Fund will disclose fund expenses in shareholder reports as if it were an open-end management investment company, and disclose any arrangements that result in breakpoints in, or elimination of, sales loads in its private placement memorandum.4 Each Fund and the Placement Agent will also comply with any requirements that may be adopted by the Commission or FINRA regarding disclosure at the point of sale and in transaction confirmations about the costs and conflicts of interest arising out of the distribution of openend investment company shares, and regarding prospectus disclosure of sales loads and revenue sharing arrangements as if those requirements applied to the Fund and the Placement Agent.5 7. Each Fund will allocate all expenses incurred by it among the various classes of Shares based on the respective net assets of the Fund attributable to each class, except that the net asset value and expenses of each class will reflect distribution fees, service fees, and any other incremental expenses of that class. Expenses of a Fund allocated to a particular class of Shares will be borne on a pro rata basis by each outstanding Share of that class. Applicants state that each Fund will comply with the provisions of rule 18f– 3 under the Act as if it were an openend investment company. 8. Each Fund may waive the CDSC for certain categories of shareholders or transactions to be established from time to time. With respect to any waiver of, scheduled variation in, or elimination of be adopted by the Financial Industry Regulatory Authority (‘‘FINRA’’). 4 See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies, Investment Company Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring open-end investment companies to disclose fund expenses in shareholder reports); and Disclosure of Breakpoint Discounts by Mutual Funds, Investment Company Act Release No. 26464 (June 7, 2004) (adopting release) (requiring open-end investment companies to provide prospectus disclosure of certain sales load information). 5 Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 to Adopt NASD Rule 2830 as FINRA Rule 2341 (Investment Company Securities) in Consolidated FINRA Rulebook, Securities Exchange Act Release No. 64386 (May 3, 2011); Confirmation Requirements and Point of Sale Disclosure Requirements for Transactions in Certain Mutual Funds and Other Securities, and Other Confirmation Requirement Amendments, and Amendments to the Registration Form for Mutual Funds, Investment Company Act Release No. 26341 (Jan. 29, 2004) (proposing release). E:\FR\FM\26SEN1.SGM 26SEN1 59458 Federal Register / Vol. 76, No. 186 / Monday, September 26, 2011 / Notices jlentini on DSK4TPTVN1PROD with NOTICES the CDSC, each Fund will comply with rule 22d–1 under the Act as if the Fund were an open-end investment company. Applicants’ Legal Analysis: Multiple Classes of Shares 1. Section 18(c) of the Act provides, in relevant part, that a closed-end investment company may not issue or sell any senior security if, immediately thereafter, the company has outstanding more than one class of senior security. Applicants state that the creation of multiple classes of Shares of the Funds may be prohibited by section 18(c). 2. Section 18(i) of the Act provides that each share of stock issued by a registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants state that permitting multiple classes of Shares of the Funds may violate section 18(i) of the Act because each class would be entitled to exclusive voting rights with respect to matters solely related to that class. 3. 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 under the Act, if and to the extent 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 request an exemption under section 6(c) from sections 18(c) and 18(i) to permit the Funds to issue multiple classes of shares. 4. Applicants submit that the proposed allocation of expenses and voting rights among multiple classes is equitable and will not discriminate against any group or class of shareholders. Applicants submit that the proposed arrangements would permit a Fund to facilitate the distribution of its Shares and provide investors with a broader choice of shareholder services. Applicants assert that the proposed closed-end investment company multiple class structure does not raise the concerns underlying section 18 of the Act to any greater degree than open-end investment companies’ multiple class structures that are permitted by rule 18f–3 under the Act. CDSCs 1. Applicants believe that the requested relief meets the standards of section 6(c) of the Act. Rule 6c–10 under the Act permits open-end investment companies to impose VerDate Mar<15>2010 17:37 Sep 23, 2011 Jkt 223001 CDSCs, subject to certain conditions. Applicants state that the CDSCs may be necessary for the Placement Agent to recover distribution costs. Applicants state that any CDSC imposed by the Funds will comply with rule 6c–10 under the Act as if the rule were applicable to closed-end investment companies. The Funds also will disclose CDSCs in accordance with the requirements of Form N–1A concerning CDSCs as if the Funds were open-end investment companies. Applicants further state that the Funds will apply the CDSC (and any waivers or scheduled variations of the CDSC) uniformly to all shareholders in a given class and consistently with the requirements of rule 22d–1 under the Act. Asset-Based Service and/or Distribution Fees 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit an affiliated person of a registered investment company or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section 17(d) and rule 17d–1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants. 2. Rule 17d–3 under the Act provides an exemption from section 17(d) and rule 17d–1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b–1 under the Act. Applicants request an order under section 17(d) and rule 17d–1 under the Act to permit the Funds to impose asset-based service and/or distribution fees. Applicants have agreed to comply with rules 12b– 1 and 17d–3 as if those rules applied to closed-end investment companies. Applicants’ Condition: Applicants agree that any order granting the requested relief will be subject to the following condition: Each Fund will comply with the provisions of rules 6c–10, 12b–1, 17d– 3, 18f–3 and 22d–1 under the Act, as amended from time to time or replaced, as if those rules applied to closed-end management investment companies, and will comply with the NASD PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 Conduct Rule 2830, as amended from time to time, as if that rule applied to all closed-end management investment companies. For the Commission, by the Division of Investment Management, under delegated authority. Elizabeth M. Murphy, Secretary. [FR Doc. 2011–24589 Filed 9–23–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 29791; File No. 812–13867] Stone Harbor Emerging Markets Income Fund, et al.; Notice of Application September 16, 2011. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of application under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from section 19(b) of the Act and rule 19b–1 under the Act. AGENCY: Summary of Application: Applicants request an order to permit certain registered closed-end investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common stock as frequently as monthly in any one taxable year, and as frequently as distributions are specified by or in accordance with the terms of any outstanding preferred stock that such investment companies may issue. Applicants: Stone Harbor Emerging Markets Income Fund (the ‘‘Current Fund’’) and Stone Harbor Investment Partners LP (‘‘Stone Harbor’’ or the ‘‘Adviser’’). Filing Dates: The application was filed on February 9, 2011 and amended on May 27, 2011 and September 13, 2011. 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 October 11, 2011, 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 E:\FR\FM\26SEN1.SGM 26SEN1

Agencies

[Federal Register Volume 76, Number 186 (Monday, September 26, 2011)]
[Notices]
[Pages 59456-59458]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-24589]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29793; 812-13866]


ASGI Agility Income Fund, et al.; Notice of Application

September 19, 2011.
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 sections 18(c) 
and 18(i) of the Act and for an order pursuant to section 17(d) of the 
Act and rule 17d-1 under the Act.

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Summary of Application:  Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of shares and to impose asset-based distribution and service 
fees and contingent deferred sales loads (``CDSCs'').

Applicants:  ASGI Agility Income Fund (``Agility Fund''), ASGI Aurora 
Opportunities Fund, LLC (``Aurora Fund''), and ASGI Corbin Multi-
Strategy Fund, LLC (``Corbin Fund'') (each a ``Fund'' and collectively, 
the ``Funds''), Alternative Strategies Group, Inc. (the ``Adviser'') 
and Alternative Strategies Brokerage Services, Inc. (the ``Placement 
Agent'').

Filing Dates:  The application was filed on February 8, 2011, and 
amended on June 24, 2011 and September 16, 2011.

Hearing or Notification of Hearing:  An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving

[[Page 59457]]

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 October 14, 2011, and should be accompanied by proof of service on 
the 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, c/o Lloyd Lipsett, 
Esq., Wells Fargo Law Department, 200 Berkeley Street, Boston, MA 
02116.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at 
(202) 551-6811 or Daniele Marchesani, 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 http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.
    Applicants' Representations:
    1. Each Fund is a continuously offered non-diversified closed-end 
management investment company registered under the Act. The Agility 
Fund is organized as a Delaware statutory trust. The Aurora Fund and 
the Corbin Fund are each organized as a Delaware limited liability 
company. The Adviser serves as investment adviser to each Fund. The 
Placement Agent, a broker-dealer registered under the Securities 
Exchange Act of 1934 (``1934 Act''), acts as principal underwriter for 
the Funds. The Placement Agent is under common control with the Adviser 
and is an affiliated person, as defined in section 2(a)(3) of the Act, 
of the Adviser.
    2. Each Fund continuously offers its shares (``Shares'') in private 
placements in reliance on the provisions of Regulation D under the 
Securities Act of 1933. The Shares are not offered or traded in a 
secondary market and are not listed on any securities exchange or 
quoted on any quotation medium. Applicants do not expect that any 
secondary market will ever develop for the Shares.
    3. Each Fund currently offers an initial class of Shares (``Initial 
Class'') at net asset value and proposes to offer multiple classes of 
Shares. Each Fund may offer a new Share class at net asset value and 
may also charge a front-end sales load and an annual service and/or 
distribution fee. The Funds intend to continue to offer Initial Class 
Shares at net asset value without a sales load, subject to minimum 
purchase requirements. The Funds may in the future offer additional 
classes of shares and/or another sales charge structure. The Funds do 
not plan to offer exchange privileges.
    4. In order to provide a limited degree of liquidity to 
Shareholders, the Funds may from time to time offer to repurchase 
Shares at net asset value in accordance with rule 13e-4 under the 1934 
Act pursuant to written tenders by Shareholders (``Repurchases'').\1\ A 
Fund will Repurchase Shares at the times, in the amounts and on the 
terms as may be determined by the Board of Trustees (``Board'') of the 
Fund in its sole discretion. The Adviser expects to recommend 
ordinarily that the Board authorize each Fund to offer to Repurchase 
Shares from Shareholders quarterly.
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    \1\ Shares are subject to a repurchase fee if the interval 
between the date of initial purchase and the valuation date with 
respect to the Repurchase of such Shares under the tender offer is, 
with respect to the Agility Fund and the Aurora Fund, less than one 
year, and, with respect to the Corbin Fund, less than 180 days. To 
the extent the Funds determine to waive, impose scheduled variations 
of, or eliminate a repurchase fee, each Fund will do it consistent 
with the requirements of Rule 22d-1 under the Act as if the 
repurchase fee were a CDSC and apply any such change uniformly to 
all Shareholders of the Fund.
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    5. Applicants request that the order also apply to any other 
continuously offered registered closed-end management investment 
companies existing now or in the future for which the Adviser, the 
Placement Agent, or any entity controlling, controlled by or under 
common control with the Adviser or the Placement Agent acts as 
investment adviser or principal underwriter, and which provides 
periodic liquidity with respect to its Shares pursuant to rule 13e-4 
under the 1934 Act (such investment companies, together with the Funds, 
the ``Funds'').\2\
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    \2\ Any Fund relying on this relief in the future will do so in 
a manner consistent with the terms and conditions of the 
application. Applicants represent that any person presently 
intending to rely on the requested relief is listed as an applicant.
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    6. Applicants represent that any asset-based service and 
distribution fees will comply with the provisions of rule 2830(d) of 
the Conduct Rules of the National Association of Securities Dealers, 
Inc. (``NASD Conduct Rule 2830'').\3\ Applicants also represent that 
each Fund will disclose in its private placement memorandum, the fees, 
expenses and other characteristics of each class of Shares offered for 
sale by the memorandum as is required for open-end multiple class funds 
under Form N-1A. Each Fund will disclose fund expenses in shareholder 
reports as if it were an open-end management investment company, and 
disclose any arrangements that result in breakpoints in, or elimination 
of, sales loads in its private placement memorandum.\4\ Each Fund and 
the Placement Agent will also comply with any requirements that may be 
adopted by the Commission or FINRA regarding disclosure at the point of 
sale and in transaction confirmations about the costs and conflicts of 
interest arising out of the distribution of open-end investment company 
shares, and regarding prospectus disclosure of sales loads and revenue 
sharing arrangements as if those requirements applied to the Fund and 
the Placement Agent.\5\
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    \3\ All references to NASD Conduct Rule 2830 include any 
successor or replacement rule that may be adopted by the Financial 
Industry Regulatory Authority (``FINRA'').
    \4\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring 
open-end investment companies to disclose fund expenses in 
shareholder reports); and Disclosure of Breakpoint Discounts by 
Mutual Funds, Investment Company Act Release No. 26464 (June 7, 
2004) (adopting release) (requiring open-end investment companies to 
provide prospectus disclosure of certain sales load information).
    \5\ Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of Proposed Rule Change and 
Amendment No. 1 to Adopt NASD Rule 2830 as FINRA Rule 2341 
(Investment Company Securities) in Consolidated FINRA Rulebook, 
Securities Exchange Act Release No. 64386 (May 3, 2011); 
Confirmation Requirements and Point of Sale Disclosure Requirements 
for Transactions in Certain Mutual Funds and Other Securities, and 
Other Confirmation Requirement Amendments, and Amendments to the 
Registration Form for Mutual Funds, Investment Company Act Release 
No. 26341 (Jan. 29, 2004) (proposing release).
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    7. Each Fund will allocate all expenses incurred by it among the 
various classes of Shares based on the respective net assets of the 
Fund attributable to each class, except that the net asset value and 
expenses of each class will reflect distribution fees, service fees, 
and any other incremental expenses of that class. Expenses of a Fund 
allocated to a particular class of Shares will be borne on a pro rata 
basis by each outstanding Share of that class. Applicants state that 
each Fund will comply with the provisions of rule 18f-3 under the Act 
as if it were an open-end investment company.
    8. Each Fund may waive the CDSC for certain categories of 
shareholders or transactions to be established from time to time. With 
respect to any waiver of, scheduled variation in, or elimination of

[[Page 59458]]

the CDSC, each Fund will comply with rule 22d-1 under the Act as if the 
Fund were an open-end investment company.
    Applicants' Legal Analysis:

Multiple Classes of Shares

    1. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the creation of 
multiple classes of Shares of the Funds may be prohibited by section 
18(c).
    2. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that permitting multiple classes of Shares of 
the Funds may violate section 18(i) of the Act because each class would 
be entitled to exclusive voting rights with respect to matters solely 
related to that class.
    3. 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 under the Act, if and to the extent 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 request an exemption under section 
6(c) from sections 18(c) and 18(i) to permit the Funds to issue 
multiple classes of shares.
    4. Applicants submit that the proposed allocation of expenses and 
voting rights among multiple classes is equitable and will not 
discriminate against any group or class of shareholders. Applicants 
submit that the proposed arrangements would permit a Fund to facilitate 
the distribution of its Shares and provide investors with a broader 
choice of shareholder services. Applicants assert that the proposed 
closed-end investment company multiple class structure does not raise 
the concerns underlying section 18 of the Act to any greater degree 
than open-end investment companies' multiple class structures that are 
permitted by rule 18f-3 under the Act.

CDSCs

    1. Applicants believe that the requested relief meets the standards 
of section 6(c) of the Act. Rule 6c-10 under the Act permits open-end 
investment companies to impose CDSCs, subject to certain conditions. 
Applicants state that the CDSCs may be necessary for the Placement 
Agent to recover distribution costs. Applicants state that any CDSC 
imposed by the Funds will comply with rule 6c-10 under the Act as if 
the rule were applicable to closed-end investment companies. The Funds 
also will disclose CDSCs in accordance with the requirements of Form N-
1A concerning CDSCs as if the Funds were open-end investment companies. 
Applicants further state that the Funds will apply the CDSC (and any 
waivers or scheduled variations of the CDSC) uniformly to all 
shareholders in a given class and consistently with the requirements of 
rule 22d-1 under the Act.

Asset-Based Service and/or Distribution Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to permit the Funds to impose asset-based service and/or 
distribution fees. Applicants have agreed to comply with rules 12b-1 
and 17d-3 as if those rules applied to closed-end investment companies.
    Applicants' Condition:
    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Each Fund will comply with the provisions of rules 6c-10, 12b-1, 
17d-3, 18f-3 and 22d-1 under the Act, as amended from time to time or 
replaced, as if those rules applied to closed-end management investment 
companies, and will comply with the NASD Conduct Rule 2830, as amended 
from time to time, as if that rule applied to all closed-end management 
investment companies.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-24589 Filed 9-23-11; 8:45 am]
BILLING CODE 8011-01-P