Notice of Application; Hirtle Callaghan & Co., LLC and HC Capital Trust, 36020-36022 [2012-14630]

Download as PDF 36020 Federal Register / Vol. 77, No. 116 / Friday, June 15, 2012 / Notices 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. srobinson on DSK4SPTVN1PROD with NOTICES Extension: Regulation FD; OMB Control No. 3235–0536; SEC File No. 270–475. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Regulation FD (17 CFR 243.100 et seq.)—Other Disclosure Materials requires public disclosure of material information from issuers of publicly traded securities so that investors have current information upon which to base investment decisions. The purpose of the regulation is to require that: (1) When an issuer intentionally discloses material information, to do so through public disclosure, not selective disclosure; and (2) to make prompt public disclosure of material information that was unintentionally selectively disclosed. Regulation FD was adopted due to a concern that the practice of selective disclosure leads to a loss of investor confidence in the integrity of our capital markets. All information is provided to the public for review. The information required is filed on occasion and is mandatory. We estimate that approximately 13,000 issuers make Regulation FD disclosures approximately five times a year for a total of 58,000 submissions annually, not including an estimated 7,000 issuers who file Form 8–K to comply with Regulation FD. We estimate that it takes approximately 5 hours per response (58,000 responses × 5 hours) for a total burden of 290,000 hours annually. In addition, we estimate that 25% of the 5 hours (1.25 hours) is prepared by the filer for an annual reporting burden of 72,500 hours (1.25 hours per response × 58,000 responses). 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. The Commission may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be VerDate Mar<15>2010 17:05 Jun 14, 2012 Jkt 226001 subject to any penalty for failing to comply with a collection of information subject to PRA that does not display a valid Office of Management and Budget (OMB) control number. The public may view the background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, Alexandria, VA 22312 or send an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: June 11, 2012. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–14624 Filed 6–14–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 30102; 812–13859–01] Notice of Application; Hirtle Callaghan & Co., LLC and HC Capital Trust June 11, 2012. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from section 15(a) of the Act and rule 18f–2 under the Act. AGENCY: Applicants request an order that would permit them to enter into and materially amend subadvisory agreements without shareholder approval. APPLICANTS: Hirtle Callaghan & Co., LLC (the ‘‘Adviser’’) and HC Capital Trust (the ‘‘Trust’’). DATES: Filing Dates: The application was filed on January 19, 2011, and amended on May 5, 2011, and April 27, 2012. 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, SUMMARY OF APPLICATION: PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on July 9, 2012, 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants: Hirtle Callaghan & Co., LLC; Five Tower Bridge, 300 Barr Harbor Drive, Suite 500, West Conshohocken, PA 19428. FOR FURTHER INFORMATION CONTACT: Barbara T. 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. The Trust, a Delaware statutory trust, is registered under the Act as an open-end management investment company and offers series of shares (each a ‘‘Series’’), each of which has its own distinct investment objectives, policies and restrictions.1 The Adviser, 1 Applicants also request relief with respect to future Series and any other existing or future registered open-end management investment company or series thereof that: (a) Is advised by the Adviser or an entity controlling, controlled by or under common control with the Adviser or its successors (each such entity included in the term ‘‘Adviser’’); (b) uses the multi-manager structure described in the application; and (c) complies with the terms and conditions of the application (together with any Series that currently uses one or more Sub-Advisers, as defined below, each a ‘‘Subadvised Fund’’ and collectively, the ‘‘Subadvised Funds’’). The only existing registered open-end management investment company that currently intends to rely on the requested order is named as an Applicant. For purposes of the requested order, ‘‘successor’’ is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. If the name of any Subadvised Fund contains the name of a Sub-Adviser, the name of the Adviser that serves as the primary adviser to the Subadvised Fund, or a trademark or trade name that is owned by that Adviser, will precede the name of the Sub-Adviser. E:\FR\FM\15JNN1.SGM 15JNN1 Federal Register / Vol. 77, No. 116 / Friday, June 15, 2012 / Notices srobinson on DSK4SPTVN1PROD with NOTICES a Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’) and serves as the investment adviser to the Trust pursuant to two separate investment advisory agreements currently in effect, one of which applies to each Series (each an ‘‘Investment Advisory Agreement’’ and together the ‘‘Investment Advisory Agreements’’). Each Investment Advisory Agreement was initially approved by the board of trustees of the Trust (the ‘‘Board’’),2 including a majority of the trustees who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, of the Trust or the Adviser (‘‘Independent Trustees’’) and by the shareholders of the applicable Subadvised Fund in accordance with sections 15(a) and 15(c) of the Act and rule 18f–2 thereunder.3 2. Under the terms of each Investment Advisory Agreement, the Adviser, subject to the oversight of the Board, furnishes a continuous investment program for each Subadvised Fund. The Adviser periodically reviews each Subadvised Fund’s investment policies and strategies and based on the need of a particular Subadvised Fund may recommend changes to the investment policies and strategies of the Subadvised Fund for consideration by its Board. For its services to each Subadvised Fund, the Adviser receives an investment advisory fee from that Subadvised Fund as specified in the applicable Investment Advisory Agreement. The investment advisory fees for the current Series of the Trust are calculated based on the ‘‘Average Daily Net Assets’’ of the particular Series.4 The terms of each Investment Advisory Agreement also permit the Adviser, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable Subadvised Fund, to delegate portfolio management responsibilities of all or a portion of the assets of the Subadvised Fund to one or more sub-advisers (‘‘Sub2 The term ‘‘Board’’ also includes the board of trustees or directors of a future Subadvised Fund. 3 Each other Subadvised Fund will enter into an investment advisory agreement with its Adviser (included in the term ‘‘Investment Advisory Agreement’’). Each Investment Advisory Agreement will be approved by the applicable Board, including a majority of the Independent Trustees and the shareholders of that Subadvised Fund. Each other Adviser will be registered with the Commission as an investment adviser under the Advisers Act. 4 The amounts of the investment advisory fees paid for the current Series of the Trust are calculated based on the ‘‘Average Daily Net Assets’’ of the particular Series, which means the average daily value of the total assets of the Series, less all accrued liabilities of the Series, (other than the aggregate amount of any outstanding borrowings constituting financial leverage). VerDate Mar<15>2010 17:05 Jun 14, 2012 Jkt 226001 Advisers’’). The Trust has entered into investment subadvisory agreements with various Sub-Advisers (‘‘SubAdvisory Agreements’’) to provide investment advisory services to certain Subadvised Funds.5 The Adviser may also enter into Sub-Advisory Agreements on behalf of other Subadvised Funds. Each Sub-Adviser is, and any future Sub-Adviser will be, an investment adviser as defined in section 2(a)(20) of the Act as well as registered as an investment adviser under the Advisers Act. The Adviser evaluates, allocates assets to and oversees the SubAdvisers, and makes recommendations about their hiring, termination and replacement to the Board, at all times subject to the authority of the Board. For its services to a Subadvised Fund, each Sub-Adviser will receive from the Subadvised Fund, a monthly fee, computed and accrued daily, on the same basis (but not necessarily the same rate) as the Adviser’s investment advisory fees are calculated for the particular Subadvised Fund managed by that Sub-Adviser. The Adviser is not responsible for paying sub-advisory fees to the Sub-Adviser. 3. Applicants request an order to permit the Adviser, subject to Board approval, including a majority of Independent Trustees, to select certain Sub-Advisers to manage all or a portion of the assets of a Subadvised Fund pursuant to a Sub-Advisory Agreement and materially amend Sub-Advisory Agreements without obtaining shareholder approval. The requested relief will not extend to any SubAdviser that is an affiliated person, as defined in section 2(a)(3) of the Act, of a Subadvised Fund, or the Adviser other than by reason of serving as a SubAdviser to a Subadvised Fund (‘‘Affiliated Sub-Adviser’’). Because the Sub-Advisers are paid directly by the Subadvised Funds, Applicants acknowledge that, after the requested order is issued, shareholder approval will still be sought for any amendment to a Sub-Advisory Agreement that would increase the total management and advisory fees payable by a Subadvised Fund. 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 5 The Trust has not entered into a Sub-Advisory Agreement with an affiliate of the Adviser. The requested relief will not extend to Affiliated SubAdvisers, as defined below. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 36021 vote of a majority of the company’s outstanding voting securities. Rule 18f– 2 under the Act provides that each series or class of securities in a series investment company affected by a matter must approve that 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 provisions of the Act, or from any rule thereunder, 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 policy and provisions of the Act. Applicants state that the requested relief meets this standard for the reasons discussed below. 3. Applicants assert that the shareholders expect the Adviser, subject to the review and approval of the Board, to select the Sub-Advisers who are best suited to achieve the Subadvised Fund’s investment objective. Applicants assert that, from the perspective of the shareholder, the role of the Sub-Adviser is substantially equivalent to the role of the individual portfolio managers employed by an investment adviser to a traditional investment company. Applicants state that requiring shareholder approval of each SubAdvisory Agreement would impose unnecessary delays and expenses on the Subadvised Funds, and may preclude the Adviser from acting promptly in a manner considered advisable by the Board. Applicants note that the Investment Advisory Agreement and Sub-Advisory Agreement with an Affiliated Sub-Adviser (if any) will continue to be subject to the shareholder approval requirement of section 15(a) of the Act and rule 18f–2 under the Act. 4. If new Sub-Advisers are hired, the Subadvised Funds will inform shareholders of the hiring of a new SubAdviser pursuant to the following procedures (‘‘Modified Notice and Access Procedures’’): (a) Within 90 days after a new Sub-Adviser is hired for any Subadvised Fund, that Subadvised Fund will send its shareholders either a Multi-manager Notice or a Multimanager Notice and Multi-manager Information Statement; 6 and (b) the 6 A ‘‘Multi-manager Notice’’ will be modeled on a Notice of Internet Availability as defined in rule 14a–16 under the Securities Exchange Act of 1934 (‘‘Exchange Act’’), and specifically will, among other things: (a) Summarize the relevant information regarding the new Sub-Adviser; (b) inform shareholders that the Multi-manager Information Statement is available on a Web site; (c) provide the Web site address; (d) state the time period during which the Multi-manager Information E:\FR\FM\15JNN1.SGM Continued 15JNN1 36022 Federal Register / Vol. 77, No. 116 / Friday, June 15, 2012 / Notices Subadvised Fund will make the Multimanager Information Statement available on the Web site identified in the Multi-manager Notice no later than when the Multi-manager Notice (or Multi-manager Notice and Multimanager Information Statement) is first sent to shareholders, and will maintain it on that Web site for at least 90 days. In the circumstances described in this application, a proxy solicitation to approve the appointment of new SubAdvisers provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Moreover, as indicated above, the applicable Board would comply with the requirements of section 15(a) and 15(c) of the Act before entering into or amending Sub-Advisory Agreements. Applicants’ Conditions srobinson on DSK4SPTVN1PROD with NOTICES Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Before a Subadvised Fund may rely on the requested order, the operation of the Subadvised Fund in the manner described in the application will have been approved by a majority of the Subadvised Fund’s outstanding voting securities as defined in the Act or, in the case of a Subadvised 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 such Subadvised Fund’s shares are offered to the public. 2. The prospectus for each Subadvised Fund will disclose the existence, substance, and effect of any order granted pursuant to this application. In addition, each Subadvised Fund will hold itself out to the public as employing a multimanager structure as described in the application. The prospectus will prominently disclose that the Adviser has ultimate responsibility, subject to oversight by the Board, to oversee the Sub-Advisers and recommend their hiring, termination, and replacement. 3. Subadvised Funds will inform shareholders of the hiring of a new SubStatement will remain available on that Web site; (e) provide instructions for accessing and printing the Multi-manager Information Statement; and (f) instruct the shareholder that a paper or email copy of the Multi-manager Information Statement may be obtained, without charge, by contacting the Subadvised Funds. A ‘‘Multi-manager Information Statement’’ will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Exchange Act for an information statement. Multimanager Information Statements will be filed electronically with the Commission via the EDGAR system. VerDate Mar<15>2010 17:05 Jun 14, 2012 Jkt 226001 Adviser within 90 days after the hiring of the new Sub-Adviser pursuant to the Modified Notice and Access Procedures. 4. The Adviser will not enter into a Sub-Advisory Agreement with any Affiliated Sub-Adviser without that agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Subadvised 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 Sub-Adviser change is proposed for a Subadvised Fund with an Affiliated Sub-Adviser, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the change is in the best interests of the Subadvised Fund and its shareholders, and does not involve a conflict of interest from which the Adviser or the Affiliated Sub-Adviser derives an inappropriate advantage. 7. The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Fund’s assets, and subject to review and approval of the Board, will: (i) Set the Subadvised Fund’s overall investment strategies; (ii) evaluate, select and recommend SubAdvisers to manage all or a portion of the Subadvised Fund’s assets; (iii) allocate and, when appropriate, reallocate the Subadvised Fund’s assets among Sub-Advisers; (iv) monitor and evaluate the Sub-Advisers’ performance; and (v) implement procedures reasonably designed to ensure that the Sub-Advisers comply with the Subadvised Fund’s investment objective, policies and restrictions. 8. No trustee or officer of the Trust or of a Subadvised 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 Sub-Adviser, except for (i) ownership of interests in the Adviser or any entity that controls, is controlled by, or is 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 Sub-Adviser. 9. In the event the Commission adopts a rule under the Act providing substantially similar relief to that in the PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 order requested in the application, the requested order will expire on the effective date of that rule. 10. Subadvised Funds pay fees to a Sub-Adviser directly from Fund assets. Any changes to a Sub-Advisory Agreement that would result in an increase in the total management and advisory fees payable by a Subadvised Fund will be approved by the shareholders of that Subadvised Fund. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–14630 Filed 6–14–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 30101; 812–13981] Notice of Application; Precidian ETFs Trust, et al. June 8, 2012. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application to amend a prior order under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) granting an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c–1 under the Act, and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (2) of the Act, and under section 12(d)(1)(J) of the Act for an exemption from sections 12(d)(1)(A) and (B) of the Act (‘‘Prior Order’’). AGENCY: Applicants seek to amend the Prior Order 1 to permit the Funds (as defined below) to issue Shares in less than Creation Unit size to investors participating in the Distribution Reinvestment Program (as defined below). APPLICANTS: Precidian ETFs Trust (‘‘Trust’’), Precidian Funds LLC (‘‘Adviser’’) and Foreside Fund Services, LLC (‘‘Foreside’’). DATES: Filing Dates: The application was filed on November 28, 2011, and amended on March 23, 2012, and May 29, 2012. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will SUMMARY OF APPLICATION: 1 Precidian ETFs Trust, Investment Company Act Release Nos. 29692 (June 9, 2011) (notice) and 29712 (July 1, 2011) (order). E:\FR\FM\15JNN1.SGM 15JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 116 (Friday, June 15, 2012)]
[Notices]
[Pages 36020-36022]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14630]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30102; 812-13859-01]


Notice of Application; Hirtle Callaghan & Co., LLC and HC Capital 
Trust

June 11, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 15(a) of 
the Act and rule 18f-2 under the Act.

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Summary of Application: Applicants request an order that would permit 
them to enter into and materially amend subadvisory agreements without 
shareholder approval.

Applicants: Hirtle Callaghan & Co., LLC (the ``Adviser'') and HC 
Capital Trust (the ``Trust'').

DATES: Filing Dates: The application was filed on January 19, 2011, and 
amended on May 5, 2011, and April 27, 2012.

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 9, 2012, 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: 
Hirtle Callaghan & Co., LLC; Five Tower Bridge, 300 Barr Harbor Drive, 
Suite 500, West Conshohocken, PA 19428.

FOR FURTHER INFORMATION CONTACT: Barbara T. 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. The Trust, a Delaware statutory trust, is registered under the 
Act as an open-end management investment company and offers series of 
shares (each a ``Series''), each of which has its own distinct 
investment objectives, policies and restrictions.\1\ The Adviser,

[[Page 36021]]

a Delaware limited liability company, is registered as an investment 
adviser under the Investment Advisers Act of 1940 (``Advisers Act'') 
and serves as the investment adviser to the Trust pursuant to two 
separate investment advisory agreements currently in effect, one of 
which applies to each Series (each an ``Investment Advisory Agreement'' 
and together the ``Investment Advisory Agreements''). Each Investment 
Advisory Agreement was initially approved by the board of trustees of 
the Trust (the ``Board''),\2\ including a majority of the trustees who 
are not ``interested persons,'' as defined in section 2(a)(19) of the 
Act, of the Trust or the Adviser (``Independent Trustees'') and by the 
shareholders of the applicable Subadvised Fund in accordance with 
sections 15(a) and 15(c) of the Act and rule 18f-2 thereunder.\3\
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    \1\ Applicants also request relief with respect to future Series 
and any other existing or future registered open-end management 
investment company or series thereof that: (a) Is advised by the 
Adviser or an entity controlling, controlled by or under common 
control with the Adviser or its successors (each such entity 
included in the term ``Adviser''); (b) uses the multi-manager 
structure described in the application; and (c) complies with the 
terms and conditions of the application (together with any Series 
that currently uses one or more Sub-Advisers, as defined below, each 
a ``Subadvised Fund'' and collectively, the ``Subadvised Funds''). 
The only existing registered open-end management investment company 
that currently intends to rely on the requested order is named as an 
Applicant. For purposes of the requested order, ``successor'' is 
limited to an entity that results from a reorganization into another 
jurisdiction or a change in the type of business organization. If 
the name of any Subadvised Fund contains the name of a Sub-Adviser, 
the name of the Adviser that serves as the primary adviser to the 
Subadvised Fund, or a trademark or trade name that is owned by that 
Adviser, will precede the name of the Sub-Adviser.
    \2\ The term ``Board'' also includes the board of trustees or 
directors of a future Subadvised Fund.
    \3\ Each other Subadvised Fund will enter into an investment 
advisory agreement with its Adviser (included in the term 
``Investment Advisory Agreement''). Each Investment Advisory 
Agreement will be approved by the applicable Board, including a 
majority of the Independent Trustees and the shareholders of that 
Subadvised Fund. Each other Adviser will be registered with the 
Commission as an investment adviser under the Advisers Act.
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    2. Under the terms of each Investment Advisory Agreement, the 
Adviser, subject to the oversight of the Board, furnishes a continuous 
investment program for each Subadvised Fund. The Adviser periodically 
reviews each Subadvised Fund's investment policies and strategies and 
based on the need of a particular Subadvised Fund may recommend changes 
to the investment policies and strategies of the Subadvised Fund for 
consideration by its Board. For its services to each Subadvised Fund, 
the Adviser receives an investment advisory fee from that Subadvised 
Fund as specified in the applicable Investment Advisory Agreement. The 
investment advisory fees for the current Series of the Trust are 
calculated based on the ``Average Daily Net Assets'' of the particular 
Series.\4\ The terms of each Investment Advisory Agreement also permit 
the Adviser, subject to the approval of the Board, including a majority 
of the Independent Trustees, and the shareholders of the applicable 
Subadvised Fund, to delegate portfolio management responsibilities of 
all or a portion of the assets of the Subadvised Fund to one or more 
sub-advisers (``Sub-Advisers''). The Trust has entered into investment 
subadvisory agreements with various Sub-Advisers (``Sub-Advisory 
Agreements'') to provide investment advisory services to certain 
Subadvised Funds.\5\ The Adviser may also enter into Sub-Advisory 
Agreements on behalf of other Subadvised Funds. Each Sub-Adviser is, 
and any future Sub-Adviser will be, an investment adviser as defined in 
section 2(a)(20) of the Act as well as registered as an investment 
adviser under the Advisers Act. The Adviser evaluates, allocates assets 
to and oversees the Sub-Advisers, and makes recommendations about their 
hiring, termination and replacement to the Board, at all times subject 
to the authority of the Board. For its services to a Subadvised Fund, 
each Sub-Adviser will receive from the Subadvised Fund, a monthly fee, 
computed and accrued daily, on the same basis (but not necessarily the 
same rate) as the Adviser's investment advisory fees are calculated for 
the particular Subadvised Fund managed by that Sub-Adviser. The Adviser 
is not responsible for paying sub-advisory fees to the Sub-Adviser.
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    \4\ The amounts of the investment advisory fees paid for the 
current Series of the Trust are calculated based on the ``Average 
Daily Net Assets'' of the particular Series, which means the average 
daily value of the total assets of the Series, less all accrued 
liabilities of the Series, (other than the aggregate amount of any 
outstanding borrowings constituting financial leverage).
    \5\ The Trust has not entered into a Sub-Advisory Agreement with 
an affiliate of the Adviser. The requested relief will not extend to 
Affiliated Sub-Advisers, as defined below.
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    3. Applicants request an order to permit the Adviser, subject to 
Board approval, including a majority of Independent Trustees, to select 
certain Sub-Advisers to manage all or a portion of the assets of a 
Subadvised Fund pursuant to a Sub-Advisory Agreement and materially 
amend Sub-Advisory Agreements without obtaining shareholder approval. 
The requested relief will not extend to any Sub-Adviser that is an 
affiliated person, as defined in section 2(a)(3) of the Act, of a 
Subadvised Fund, or the Adviser other than by reason of serving as a 
Sub-Adviser to a Subadvised Fund (``Affiliated Sub-Adviser''). Because 
the Sub-Advisers are paid directly by the Subadvised Funds, Applicants 
acknowledge that, after the requested order is issued, shareholder 
approval will still be sought for any amendment to a Sub-Advisory 
Agreement that would increase the total management and advisory fees 
payable by a Subadvised Fund.

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 securities in a series investment company affected by a matter must 
approve that 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 provisions of the Act, or 
from any rule thereunder, 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 policy and provisions of the 
Act. Applicants state that the requested relief meets this standard for 
the reasons discussed below.
    3. Applicants assert that the shareholders expect the Adviser, 
subject to the review and approval of the Board, to select the Sub-
Advisers who are best suited to achieve the Subadvised Fund's 
investment objective. Applicants assert that, from the perspective of 
the shareholder, the role of the Sub-Adviser is substantially 
equivalent to the role of the individual portfolio managers employed by 
an investment adviser to a traditional investment company. Applicants 
state that requiring shareholder approval of each Sub-Advisory 
Agreement would impose unnecessary delays and expenses on the 
Subadvised Funds, and may preclude the Adviser from acting promptly in 
a manner considered advisable by the Board. Applicants note that the 
Investment Advisory Agreement and Sub-Advisory Agreement with an 
Affiliated Sub-Adviser (if any) will continue to be subject to the 
shareholder approval requirement of section 15(a) of the Act and rule 
18f-2 under the Act.
    4. If new Sub-Advisers are hired, the Subadvised Funds will inform 
shareholders of the hiring of a new Sub-Adviser pursuant to the 
following procedures (``Modified Notice and Access Procedures''): (a) 
Within 90 days after a new Sub-Adviser is hired for any Subadvised 
Fund, that Subadvised Fund will send its shareholders either a Multi-
manager Notice or a Multi-manager Notice and Multi-manager Information 
Statement; \6\ and (b) the

[[Page 36022]]

Subadvised Fund will make the Multi-manager Information Statement 
available on the Web site identified in the Multi-manager Notice no 
later than when the Multi-manager Notice (or Multi-manager Notice and 
Multi-manager Information Statement) is first sent to shareholders, and 
will maintain it on that Web site for at least 90 days. In the 
circumstances described in this application, a proxy solicitation to 
approve the appointment of new Sub-Advisers provides no more meaningful 
information to shareholders than the proposed Multi-manager Information 
Statement. Moreover, as indicated above, the applicable Board would 
comply with the requirements of section 15(a) and 15(c) of the Act 
before entering into or amending Sub-Advisory Agreements.
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    \6\ A ``Multi-manager Notice'' will be modeled on a Notice of 
Internet Availability as defined in rule 14a-16 under the Securities 
Exchange Act of 1934 (``Exchange Act''), and specifically will, 
among other things: (a) Summarize the relevant information regarding 
the new Sub-Adviser; (b) inform shareholders that the Multi-manager 
Information Statement is available on a Web site; (c) provide the 
Web site address; (d) state the time period during which the Multi-
manager Information Statement will remain available on that Web 
site; (e) provide instructions for accessing and printing the Multi-
manager Information Statement; and (f) instruct the shareholder that 
a paper or email copy of the Multi-manager Information Statement may 
be obtained, without charge, by contacting the Subadvised Funds.
    A ``Multi-manager Information Statement'' will meet the 
requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 
14A under the Exchange Act for an information statement. Multi-
manager Information Statements will be filed electronically with the 
Commission via the EDGAR system.
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Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Before a Subadvised Fund may rely on the requested order, the 
operation of the Subadvised Fund in the manner described in the 
application will have been approved by a majority of the Subadvised 
Fund's outstanding voting securities as defined in the Act or, in the 
case of a Subadvised 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 such Subadvised 
Fund's shares are offered to the public.
    2. The prospectus for each Subadvised Fund will disclose the 
existence, substance, and effect of any order granted pursuant to this 
application. In addition, each Subadvised Fund will hold itself out to 
the public as employing a multi-manager structure as described in the 
application. The prospectus will prominently disclose that the Adviser 
has ultimate responsibility, subject to oversight by the Board, to 
oversee the Sub-Advisers and recommend their hiring, termination, and 
replacement.
    3. Subadvised Funds will inform shareholders of the hiring of a new 
Sub-Adviser within 90 days after the hiring of the new Sub-Adviser 
pursuant to the Modified Notice and Access Procedures.
    4. The Adviser will not enter into a Sub-Advisory Agreement with 
any Affiliated Sub-Adviser without that agreement, including the 
compensation to be paid thereunder, being approved by the shareholders 
of the applicable Subadvised 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 then-
existing Independent Trustees.
    6. Whenever a Sub-Adviser change is proposed for a Subadvised Fund 
with an Affiliated Sub-Adviser, the Board, including a majority of the 
Independent Trustees, will make a separate finding, reflected in the 
Board minutes, that the change is in the best interests of the 
Subadvised Fund and its shareholders, and does not involve a conflict 
of interest from which the Adviser or the Affiliated Sub-Adviser 
derives an inappropriate advantage.
    7. The Adviser will provide general management services to each 
Subadvised Fund, including overall supervisory responsibility for the 
general management and investment of the Subadvised Fund's assets, and 
subject to review and approval of the Board, will: (i) Set the 
Subadvised Fund's overall investment strategies; (ii) evaluate, select 
and recommend Sub-Advisers to manage all or a portion of the Subadvised 
Fund's assets; (iii) allocate and, when appropriate, reallocate the 
Subadvised Fund's assets among Sub-Advisers; (iv) monitor and evaluate 
the Sub-Advisers' performance; and (v) implement procedures reasonably 
designed to ensure that the Sub-Advisers comply with the Subadvised 
Fund's investment objective, policies and restrictions.
    8. No trustee or officer of the Trust or of a Subadvised 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 Sub-Adviser, except for (i) ownership 
of interests in the Adviser or any entity that controls, is controlled 
by, or is 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 Sub-Adviser or an 
entity that controls, is controlled by, or is under common control with 
a Sub-Adviser.
    9. In the event 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.
    10. Subadvised Funds pay fees to a Sub-Adviser directly from Fund 
assets. Any changes to a Sub-Advisory Agreement that would result in an 
increase in the total management and advisory fees payable by a 
Subadvised Fund will be approved by the shareholders of that Subadvised 
Fund.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14630 Filed 6-14-12; 8:45 am]
BILLING CODE 8011-01-P

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