Arden Investment Series Trust and Arden Asset Management LLC; Notice of Application, 67029-67032 [2012-27288]
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Federal Register / Vol. 77, No. 217 / Thursday, November 8, 2012 / Notices
meeting will be held for the purpose of
soliciting, from the scientific
community and other persons, scientific
and technical information relevant to
program planning.
DATES: Monday, November 26, 2012,
1:00 p.m.–4:00 p.m., Local Time.
ADDRESSES: NASA Headquarters, 300 E
Street SW., Glennan Conference Room,
1Q39, Washington, DC 20546–0001.
FOR FURTHER INFORMATION CONTACT: Mr.
Thomas W. Rathjen, Human Exploration
and Operations Mission Directorate,
NASA Headquarters, Washington, DC
20546, (202) 358–0552, fax (202) 358–
2885, or thomas.rathjen-1@nasa.gov.
SUPPLEMENTARY INFORMATION: The
meeting will be open to the public up
to the capacity of the room. This
meeting is also available telephonically
and by WebEx. Any interested person
may call the USA toll free conference
call number (800) 857–4810 or toll
number (773) 799–3416, pass code
7840548 to participate in this meeting
by telephone. The WebEx link is
https://nasa.webex.com/, the meeting
number is 995 242 262, and the
password is Monday1126!. The agenda
for the meeting includes the following
topics:
—Status of NASA’s Commercialization
Efforts
—Overview of NASA’s Facility
Utilization and Disposition Planning
It is imperative that the meeting be
held on these dates to accommodate the
scheduling priorities of the key
participants. Attendees will be required
to comply with NASA security
procedures; visitors must show a valid
State or Federal issued picture ID, green
card, or passport to enter into NASA
Headquarters, and must state they are
attending the NASA Advisory Council
Commercial Space Committee session in
the Glennan Conference Room, 1Q39.
All U.S. citizens and Permanent
Residents (green card holders) desiring
to attend must provide their full name,
company affiliation (if applicable), and
citizenship to Thomas Rathjen via email
at thomas.rathjen-1@nasa.gov, no later
than the close of business November 15,
2012. Permanent Residents will need to
show residency status (valid green card)
and a valid, officially issued picture
identification such as a driver’s license
and must state they are attending the
Commercial Space Committee meeting
in the Glennan Conference Room, 1Q39.
Foreign Nationals must submit, no later
than the close of business November 14,
2012, their full name, gender, current
address, citizenship, company
affiliation (if applicable) to include
address, telephone number, and their
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title, place of birth, date of birth, U.S.
visa information to include type,
number and expiration date, U.S. Social
Security Number (if applicable), and an
electronically scanned or faxed copy of
their passport and visa to Thomas
Rathjen, Executive Secretary,
Commercial Space Committee, via email
at thomas.rathjen-1@nasa.gov.
Patricia D. Rausch,
Advisory Committee Management Officer,
National Aeronautics and Space
Administration.
[FR Doc. 2012–27233 Filed 11–7–12; 8:45 am]
BILLING CODE 7510–13–P
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
[Notice (12–094)]
NASA Advisory Council Meeting
National Aeronautics and
Space Administration.
ACTION: Notice.
AGENCY:
In accordance with the
Federal Advisory Committee Act, Public
Law 92–463, as amended, the National
Aeronautics and Space Administration
announces a meeting of the NASA
Advisory Council.
DATES: Wednesday, November 28, 2012,
from 1:00 to 5:00 p.m. Thursday,
November 29, 2012, from 9:00 a.m. to
4:30 p.m. Friday, November 30, 2012,
from 9:00 a.m. to 11:30 a.m. Note: All
times listed are local time.
ADDRESSES: NASA Marshall Space
Flight Center, Building 4200, Room P–
110, Marshall Space Flight Center, AL
35812.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Marla King, NAC Administrative
Officer, NASA Headquarters, 300 E
Street SW., Washington, DC 20546,
Phone: 202–358–1148.
SUPPLEMENTARY INFORMATION: The
agenda topics for the meeting will
include:
• Aeronautics
• Audit, Finance and Analysis
• Commercial Space
• Education and Public Outreach
• Human Exploration and Operations
• Information Technology
Infrastructure
• Science
• Technology and Innovation
The meeting will be open to the
public up to the seating capacity of the
room. This meeting is also available
telephonically and by WebEx. You must
use a touch tone phone to participate in
this meeting. Any interested person may
call the USA toll free conference call
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number (866) 731–2093 and then enter
the numeric participant passcode:
8467465 followed by the # sign. To join
via WebEx the link is https://
nasa.webex.com, meeting number 998
094 377, and password
Nov12NAC@MSFC. It is imperative that
the meeting be held on this date to
accommodate the scheduling priorities
of the key participants. All U.S. citizens
desiring to attend the NASA Advisory
Council (NAC) meeting at the Marshall
Space Flight Center (MSFC) must
provide his or her full name, company
affiliation (if applicable), citizenship,
place of birth, and date of birth to the
MSFC Protective Services Office no later
than the close of business on November
19, 2012. All non-U.S. citizens must
submit his or her name, current address,
citizenship, company affiliation (if
applicable) to include address,
telephone number, and title, place of
birth, date of birth, U.S. visa
information to include type, number,
and expiration date, U.S. Social Security
Number (if applicable), Permanent
Resident card number and expiration
date (if applicable), place and date of
entry into the U.S., and passport
information to include country of issue,
number, and expiration date to the
MSFC Protective Services Office no later
than the close of business on November
12, 2012. If the above information is not
received by the noted dates, attendees
should expect a minimum delay of two
(2) hours. All visitors to this meeting
will be required to process in through
the Redstone/MSFC Joint Visitor
Control Center located on Rideout Road,
north of Gate 9 prior to entering MSFC.
Please provide the appropriate data, via
fax 256–544–2101, noting at the top of
the page ‘‘Public Admission to the
NASA Advisory Council (NAC)
Meeting.’’ For security questions, please
call Becky Hopson at 256–544–4541.
Patricia D. Rausch,
Advisory Committee Management Officer,
National Aeronautics and Space
Administration.
[FR Doc. 2012–27263 Filed 11–7–12; 8:45 am]
BILLING CODE 7510–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
30255; 812–14062]
Arden Investment Series Trust and
Arden Asset Management LLC; Notice
of Application
November 2, 2012.
Securities and Exchange
Commission (‘‘Commission’’).
AGENCY:
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Federal Register / Vol. 77, No. 217 / Thursday, November 8, 2012 / Notices
Applicants’ Representations
1. The Trust, a Delaware statutory
trust, is registered under the Act as an
open-end management investment
company. The Trust currently consists
of a single series that will be advised by
the Initial Advisor.1 The Initial Advisor,
a Delaware limited liability company, is
SUMMARY OF THE APPLICATION:
registered as an investment adviser
Applicants request an order that would
under the Investment Advisers Act of
permit them to enter into and materially 1940 (‘‘Advisers Act’’). Any other
amend subadvisory agreements without Advisor will be registered as an
shareholder approval and would grant
investment adviser under the Advisers
relief from certain disclosure
Act. Applicants state that the Initial
requirements.
Advisor serves as investment adviser to
APPLICANTS: Arden Investment Series
the initial Fund under an investment
Trust (the ‘‘Trust’’) and Arden Asset
advisory agreement with the Trust (the
Management LLC (the ‘‘Initial
‘‘Advisory Agreement’’) 2 that has been
Advisor’’).
approved by each respective Fund’s
DATES: Filing Dates: The application was shareholders and the Trust’s Board of
Trustees (‘‘Board’’), including a majority
filed on July 23, 2012, and amended on
of the trustees who are not ‘‘interested
October 22, 2012.
persons,’’ as defined in section 2(a)(19)
HEARING OR NOTIFICATION OF HEARING:
of the Act, of either the Trust or the
An order granting the application will
be issued unless the Commission orders Advisor (‘‘Independent Trustees’’) in the
manner required by sections 15(a) and
a hearing. Interested persons may
(c) of the Act and rule 18f–2 under the
request a hearing by writing to the
Act.
Commission’s Secretary and serving
2. Under the terms of the Advisory
applicants with a copy of the request,
Agreement, the Advisor manages the
personally or by mail. Hearing requests
Fund in accordance with its investment
should be received by the Commission
objective and policies and oversees,
by 5:30 p.m. on November 27, 2012 and
implements and administers the Fund’s
should be accompanied by proof of
investment program, subject to the
service on applicants, in the form of an
supervision of, and policies established
affidavit or, for lawyers, a certificate of
by, the Board. For the investment
service. Hearing requests should state
management services it will provide to
the nature of the writer’s interest, the
each Fund, the Advisor will receive the
reason for the request, and the issues
fee specified in the Advisory Agreement
contested. Persons who wish to be
from such Fund based on the average
notified of a hearing may request
daily net assets of the Fund. The
notification by writing to the
Advisory Agreement permits the
Commission’s Secretary.
Advisor, subject to the approval of the
ADDRESSES: Elizabeth M. Murphy,
Board, to delegate certain
Secretary, U.S. Securities and Exchange responsibilities to one or more
Commission, 100 F Street NE.,
subadvisers (‘‘Subadvisors’’). The
Washington, DC 20549–1090.
Applicants, Arden Investment Series
1 Applicants request relief with respect to any
Trust, 375 Park Avenue, 32nd Floor,
existing and any future series of the Trust or any
other registered open-end management company
New York, New York 10152 and Arden
that: (a) Is advised by the Initial Advisor or a person
Asset Management LLC, 375 Park
controlling, controlled by, or under common
Avenue, 32nd Floor, New York, New
control with the Initial Advisor or its successor
York 10152.
(each, an ‘‘Advisor’’); (b) uses the manager of
managers structure described in the application
FOR FURTHER INFORMATION CONTACT:
(‘‘Manager of Managers Structure’’); and (c)
David J. Marcinkus, Attorney-Advisor,
complies with the terms and conditions of the
at (202) 551–6882, or David P. Bartels,
requested order (any such series, a ‘‘Fund’’ and
collectively, the ‘‘Funds’’). The only existing
Branch Chief, at (202) 551–6821 (Office
registered open-end management investment
of Investment Company Regulation,
company that currently intends to rely on the
Division of Investment Management).
requested order is named as an applicant and the
only series that currently intends to rely on the
SUPPLEMENTARY INFORMATION: The
requested order as a Fund is identified in the
following is a summary of the
application. For purposes of the requested order,
application. The complete application
‘‘successor’’ is limited to an entity that results from
may be obtained via the Commission’s
a reorganization into another jurisdiction or a
change in the type of business organization. If the
Web site by searching for the file
name of any Fund contains the name of a
number, or for an applicant using the
Subadvisor (as defined below), that name will be
Company name box, at https://
preceded by the name of the Advisor.
www.sec.gov/search/search.htm or by
2 ‘‘Advisory Agreement’’ includes advisory
agreements with an Advisor for future Funds.
calling (202) 551–8090.
Notice of an application for an
order 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, as well as from certain
disclosure requirements.
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Advisor expects to enter into
subadvisory agreements with various
Subadvisors (‘‘Subadvisory
Agreements’’) to provide investment
advisory services to the Funds.3 Each
Subadvisor will be an investment
adviser as defined in section 2(a)(20) of
the Act as well as registered with the
Commission as an ‘‘investment adviser’’
under the Advisers Act. The Advisor
evaluates, allocates assets to and
oversees the Subadvisors, and makes
recommendations about their hiring,
termination and replacement to the
Board, at all times subject to the
authority of the Board. The Advisor will
compensate the Subadvisors out of the
advisory fee paid by a Fund to the
Advisor under the Advisory Agreement.
3. Applicants request an order to
permit the Advisor, subject to Board
approval, to select certain Subadvisors
to manage all or a portion of the assets
of a Fund or Funds pursuant to a
Subadvisory Agreement and materially
amend Subadvisory Agreements
without obtaining shareholder approval.
The requested relief will not extend to
any Subadvisor that is an affiliated
person, as defined in section 2(a)(3) of
the Act, of the Trust, a Fund or the
Advisor, other than by reason of serving
as a subadviser to one or more of the
Funds (‘‘Affiliated Subadvisor’’).
4. Applicants also request an order
exempting the Funds from certain
disclosure provisions described below
that may require a Fund to disclose fees
paid by the Advisor to each Subadvisor.
Applicants seek an order to permit the
Trust to disclose for a Fund (as both a
dollar amount and as a percentage of the
Fund’s net assets): (a) the aggregate fees
paid to the Advisor and any Affiliated
Subadvisor; and (b) the aggregate fees
paid to Subadvisors other than
Affiliated Subadvisors (collectively,
‘‘Aggregate Fee Disclosure’’). Any Fund
that employs an Affiliated Subadvisor
will provide separate disclosure of any
fees paid to the Affiliated Subadvisor.
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 a
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
investment company affected by a
3 As of the date of the application the Advisor has
not entered in Subadvisory Agreements with
Subadvisors.
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Federal Register / Vol. 77, No. 217 / Thursday, November 8, 2012 / Notices
matter must approve that matter if the
Act requires shareholder approval.
2. Form N–1A is the registration
statement used by open-end investment
companies. Item 19(a)(3) of Form N–1A
requires disclosure of the method and
amount of the investment adviser’s
compensation.
3. Rule 20a–1 under the Act requires
proxies solicited with respect to an
investment company to comply with
Schedule 14A under the Securities
Exchange Act of 1934 (‘‘1934 Act’’).
Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8)
and 22(c)(9) of Schedule 14A, taken
together, require a proxy statement for a
shareholder meeting at which the
advisory contract will be voted upon to
include the ‘‘rate of compensation of the
investment adviser,’’ the ‘‘aggregate
amount of the investment adviser’s
fees,’’ a description of the ‘‘terms of the
contract to be acted upon,’’ and, if a
change in the advisory fee is proposed,
the existing and proposed fees and the
difference between the two fees.
4. Regulation S–X sets forth the
requirements for financial statements
required to be included as part of a
registered investment company’s
registration statement and shareholder
reports filed with the Commission.
Sections 6–07(2)(a), (b), and (c) of
Regulation S–X require a registered
investment company to include in its
financial statement information about
investment advisory fees.
5. 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.
6. Applicants assert that the
shareholders expect the Advisor, subject
to the review and approval of the Board,
to select the Subadvisors who are best
suited to achieve the Fund’s investment
objectives. Applicants assert that, from
the perspective of the shareholder, the
role of the Subadvisors is substantially
equivalent to that of the individual
portfolio managers employed by
traditional investment company
advisory firms. Applicants state that
requiring shareholder approval of each
Subadvisory Agreement would impose
unnecessary delays and expenses on the
Funds and may preclude the Funds
from acting promptly when the Advisor
and Board consider it appropriate to
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hire Subadvisors or amend Subadvisory
Agreements. Applicants note that the
Advisory Agreements and any
Subadvisory Agreements with Affiliated
Subadvisors will remain subject to the
shareholder approval requirements of
section 15(a) of the Act and rule 18f–2
under the Act.
7. If a new Subadvisor is retained in
reliance on the requested order, the
Funds will inform shareholders of the
hiring of a new Subadvisor pursuant to
the following procedures (‘‘Modified
Notice and Access Procedures’’): (a)
within 90 days after a new Subadvisor
is hired for any Fund, that Fund will
send its shareholders either a Multimanager Notice or a Multi-manager
Notice and Multi-manager Information
Statement; 4 and (b) the 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 the application, a proxy solicitation
to approve the appointment of new
Subadvisors provides no more
meaningful information to shareholders
than the proposed Multi-manager
Information Statement. Moreover, the
Board will comply with the
requirements of sections 15(a) and 15(c)
of the 1940 Act before entering into or
amending Subadvisory Agreements.
8. Applicants assert that the requested
disclosure relief would benefit
shareholders of the Funds because it
would improve the Advisor’s ability to
negotiate the fees paid to Subadvisors.
Applicants state that the Advisor may
be able to negotiate rates that are below
a Subadvisor’s ‘‘posted’’ amounts if the
Advisor is not required to disclose the
Subadvisors’ fees to the public.
4 A ‘‘Multi-manager Notice’’ will be modeled on
a Notice of Internet Availability as defined in rule
14a–16 under the Exchange Act, and specifically
will, among other things: (a) Summarize the
relevant information regarding the new Subadvisor;
(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 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, except
as modified by the requested order to permit
Aggregate Fee Disclosure. 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 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 sole initial
shareholder before offering the Fund’s
shares to the public.
2. The prospectus for each Fund will
disclose the existence, substance, and
effect of any order granted pursuant to
the application. Each Fund will hold
itself out to the public as employing the
Manager of Managers Structure. The
prospectus will prominently disclose
that the Advisor has ultimate
responsibility (subject to oversight by
the Board) to oversee the Subadvisors
and recommend their hiring,
termination, and replacement.
3. Funds will inform shareholders of
the hiring of a new Subadvisor within
90 days after the hiring of a new
Subadvisor pursuant to the Modified
Notice and Access Procedures.
4. The Advisor will not enter into a
Subadvisory Agreement with any
Affiliated Subadvisor without that
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 and selection of
new or additional Independent Trustees
will be placed within the discretion of
the then-existing Independent Trustees.
6. When a Subadvisor change is
proposed for a Fund with an Affiliated
Subadvisor, the Board, including a
majority of the Independent Trustees,
will make a separate finding, reflected
in the applicable 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 Advisor or the Affiliated
Subadvisor derives an inappropriate
advantage.
7. Independent legal counsel, as
defined in rule 0–1(a)(6) under the Act,
will be engaged to represent the
Independent Trustees. The selection of
such counsel will be within the
discretion of the then existing
Independent Trustees.
8. Each Advisor will provide the
Board, no less frequently than quarterly,
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Federal Register / Vol. 77, No. 217 / Thursday, November 8, 2012 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
with information about the profitability
of the Advisor on a per-Fund basis. The
information will reflect the impact on
profitability of the hiring or termination
of any Subadvisor during the applicable
quarter.
9. Whenever a Subadvisor is hired or
terminated, the Advisor will provide the
Board with information showing the
expected impact on the profitability of
the Advisor.
10. The Advisor will provide general
management services to each Fund,
including overall supervisory
responsibility for the general
management and investment of the
Fund’s assets and, subject to review and
approval of the Board, will (i) Set each
Fund’s overall investment strategies; (ii)
evaluate, select and recommend
Subadvisors to manage all or part of a
Fund’s assets; (iii) when appropriate,
allocate and reallocate a Fund’s assets
among multiple Subadvisors; (iv)
monitor and evaluate the performance
of Subadvisors; and (v) implement
procedures reasonably designed to
ensure that the Subadvisors comply
with each Fund’s investment objective,
policies and restrictions.
11. No trustee or officer of the Trust,
or of a Fund, or director or officer of the
Advisor, will own directly or indirectly
(other than through a pooled investment
vehicle that is not controlled by such
person) any interest in a Subadvisor,
except for (a) ownership of interests in
the Advisor or any entity that controls,
is controlled by, or is under common
control with the Advisor; or (b)
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 Subadvisor or
an entity that controls, is controlled by,
or is under common control with a
Subadvisor.
12. Each Fund will disclose in its
registration statement the Aggregate Fee
Disclosure.
13. 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.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–27288 Filed 11–7–12; 8:45 am]
BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68131; File No. SR–CBOE–
2012–101]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fees
Schedule
November 1, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
25, 2012, Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Fees Schedule. The text of the proposed
rule change is available on the
Exchange’s Web site (https://
www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
marketing fee. The marketing fee is
assessed on certain transactions of
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Market-Makers, Designated Primary
Market-Makers (‘‘DPMs’’) and e-DPMs.3
The funds collected via this marketing
fee are then put into pools controlled by
DPMs and Preferred Market-Makers
(‘‘PMMs’’).4 The DPM or PMM
controlling a certain pool of funds can
then determine the order flow
provider(s) to which the funds should
be directed in order to encourage such
order flow provider(s) to send orders to
the Exchange. On each order, an order
flow provider that receives marketing
fee funds can designate the PMM to
which the funds generated from the
order sent by the order flow provider
should be allocated (a ‘‘Preferred
order’’).
Currently, Footnote 6 to the Exchange
Fees Schedule, which relates to the
marketing fee, states that a PMM will
only be given access to the marketing
fee funds generated from a Preferred
order if the PMM has an appointment in
the class in which the Preferred order is
received and executed. However, CBOE
recently learned that other options
exchanges allow a PMM (or similar
positions) to have access to the
marketing fee funds generated from a
Preferred order (or similar order type)
regardless of whether the PMM has an
appointment in the class in which the
Preferred order is received and
executed. As such, the Exchange
decided to examine permitting this
activity on CBOE.5
Permitting a PMM to access marketing
fee funds generated from a Preferred
order, regardless of whether the order is
for a class in which the PMM has an
appointment, may allow PMMs to
encourage greater order flow to be sent
to the Exchange. A PMM could be able
to amass a greater pool of funds with
which to use to incent order flow
providers to send order flow to the
Exchange. This increased order flow
would benefit all market participants on
the Exchange. Indeed, a PMM would
likely often not even be the direct
beneficiary of the increased order flow,
since the PMM would not trade with
that order (as the PMM is not appointed
in that class). The market participants
3 See CBOE Fees Schedule, table entitled
‘‘Marketing Fee’’ and Footnote 6 for more details
regarding the marketing fee.
4 See CBOE Rule 8.13 for details of the PMM
program.
5 See NASDAQ OMX Phlx, LLC (‘‘Phlx’’) Pricing
Schedule, section on Payment for Order Flow Fees,
and NYSE Amex Options Fee Schedule, Footnote
10, and also International Securities Exchange, LLC
(‘‘ISE’’) Schedule of Fees, Section IV(D), none of
which contain requirements that a PMM (or similar
position) have an appointment in the class in which
a Preferred order (or similar order type) is received
and executed in order to have access to the
marketing fee funds generated from that Preferred
order.
E:\FR\FM\08NON1.SGM
08NON1
]]>Agencies
[Federal Register Volume 77, Number 217 (Thursday, November 8, 2012)]
[Notices]
[Pages 67029-67032]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27288]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 30255; 812-14062]
Arden Investment Series Trust and Arden Asset Management LLC;
Notice of Application
November 2, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').
[[Page 67030]]
ACTION: Notice of an application for an order 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, as well as from certain
disclosure requirements.
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Summary of the Application: Applicants request an order that would
permit them to enter into and materially amend subadvisory agreements
without shareholder approval and would grant relief from certain
disclosure requirements.
Applicants: Arden Investment Series Trust (the ``Trust'') and Arden
Asset Management LLC (the ``Initial Advisor'').
DATES: Filing Dates: The application was filed on July 23, 2012, and
amended on October 22, 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 November 27, 2012 and should be accompanied by proof of service
on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants,
Arden Investment Series Trust, 375 Park Avenue, 32nd Floor, New York,
New York 10152 and Arden Asset Management LLC, 375 Park Avenue, 32nd
Floor, New York, New York 10152.
FOR FURTHER INFORMATION CONTACT: David J. Marcinkus, Attorney-Advisor,
at (202) 551-6882, or David P. Bartels, Branch Chief, at (202) 551-6821
(Office of Investment Company Regulation, Division of Investment
Management).
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.
Applicants' Representations
1. The Trust, a Delaware statutory trust, is registered under the
Act as an open-end management investment company. The Trust currently
consists of a single series that will be advised by the Initial
Advisor.\1\ The Initial Advisor, a Delaware limited liability company,
is registered as an investment adviser under the Investment Advisers
Act of 1940 (``Advisers Act''). Any other Advisor will be registered as
an investment adviser under the Advisers Act. Applicants state that the
Initial Advisor serves as investment adviser to the initial Fund under
an investment advisory agreement with the Trust (the ``Advisory
Agreement'') \2\ that has been approved by each respective Fund's
shareholders and the Trust's Board of Trustees (``Board''), including a
majority of the trustees who are not ``interested persons,'' as defined
in section 2(a)(19) of the Act, of either the Trust or the Advisor
(``Independent Trustees'') in the manner required by sections 15(a) and
(c) of the Act and rule 18f-2 under the Act.
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\1\ Applicants request relief with respect to any existing and
any future series of the Trust or any other registered open-end
management company that: (a) Is advised by the Initial Advisor or a
person controlling, controlled by, or under common control with the
Initial Advisor or its successor (each, an ``Advisor''); (b) uses
the manager of managers structure described in the application
(``Manager of Managers Structure''); and (c) complies with the terms
and conditions of the requested order (any such series, a ``Fund''
and collectively, the ``Funds''). The only existing registered open-
end management investment company that currently intends to rely on
the requested order is named as an applicant and the only series
that currently intends to rely on the requested order as a Fund is
identified in the application. 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 Fund contains the name of
a Subadvisor (as defined below), that name will be preceded by the
name of the Advisor.
\2\ ``Advisory Agreement'' includes advisory agreements with an
Advisor for future Funds.
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2. Under the terms of the Advisory Agreement, the Advisor manages
the Fund in accordance with its investment objective and policies and
oversees, implements and administers the Fund's investment program,
subject to the supervision of, and policies established by, the Board.
For the investment management services it will provide to each Fund,
the Advisor will receive the fee specified in the Advisory Agreement
from such Fund based on the average daily net assets of the Fund. The
Advisory Agreement permits the Advisor, subject to the approval of the
Board, to delegate certain responsibilities to one or more subadvisers
(``Subadvisors''). The Advisor expects to enter into subadvisory
agreements with various Subadvisors (``Subadvisory Agreements'') to
provide investment advisory services to the Funds.\3\ Each Subadvisor
will be an investment adviser as defined in section 2(a)(20) of the Act
as well as registered with the Commission as an ``investment adviser''
under the Advisers Act. The Advisor evaluates, allocates assets to and
oversees the Subadvisors, and makes recommendations about their hiring,
termination and replacement to the Board, at all times subject to the
authority of the Board. The Advisor will compensate the Subadvisors out
of the advisory fee paid by a Fund to the Advisor under the Advisory
Agreement.
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\3\ As of the date of the application the Advisor has not
entered in Subadvisory Agreements with Subadvisors.
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3. Applicants request an order to permit the Advisor, subject to
Board approval, to select certain Subadvisors to manage all or a
portion of the assets of a Fund or Funds pursuant to a Subadvisory
Agreement and materially amend Subadvisory Agreements without obtaining
shareholder approval. The requested relief will not extend to any
Subadvisor that is an affiliated person, as defined in section 2(a)(3)
of the Act, of the Trust, a Fund or the Advisor, other than by reason
of serving as a subadviser to one or more of the Funds (``Affiliated
Subadvisor'').
4. Applicants also request an order exempting the Funds from
certain disclosure provisions described below that may require a Fund
to disclose fees paid by the Advisor to each Subadvisor. Applicants
seek an order to permit the Trust to disclose for a Fund (as both a
dollar amount and as a percentage of the Fund's net assets): (a) the
aggregate fees paid to the Advisor and any Affiliated Subadvisor; and
(b) the aggregate fees paid to Subadvisors other than Affiliated
Subadvisors (collectively, ``Aggregate Fee Disclosure''). Any Fund that
employs an Affiliated Subadvisor will provide separate disclosure of
any fees paid to the Affiliated Subadvisor.
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 a 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 investment company affected by a
[[Page 67031]]
matter must approve that matter if the Act requires shareholder
approval.
2. Form N-1A is the registration statement used by open-end
investment companies. Item 19(a)(3) of Form N-1A requires disclosure of
the method and amount of the investment adviser's compensation.
3. Rule 20a-1 under the Act requires proxies solicited with respect
to an investment company to comply with Schedule 14A under the
Securities Exchange Act of 1934 (``1934 Act''). Items 22(c)(1)(ii),
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together,
require a proxy statement for a shareholder meeting at which the
advisory contract will be voted upon to include the ``rate of
compensation of the investment adviser,'' the ``aggregate amount of the
investment adviser's fees,'' a description of the ``terms of the
contract to be acted upon,'' and, if a change in the advisory fee is
proposed, the existing and proposed fees and the difference between the
two fees.
4. Regulation S-X sets forth the requirements for financial
statements required to be included as part of a registered investment
company's registration statement and shareholder reports filed with the
Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require
a registered investment company to include in its financial statement
information about investment advisory fees.
5. 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.
6. Applicants assert that the shareholders expect the Advisor,
subject to the review and approval of the Board, to select the
Subadvisors who are best suited to achieve the Fund's investment
objectives. Applicants assert that, from the perspective of the
shareholder, the role of the Subadvisors is substantially equivalent to
that of the individual portfolio managers employed by traditional
investment company advisory firms. Applicants state that requiring
shareholder approval of each Subadvisory Agreement would impose
unnecessary delays and expenses on the Funds and may preclude the Funds
from acting promptly when the Advisor and Board consider it appropriate
to hire Subadvisors or amend Subadvisory Agreements. Applicants note
that the Advisory Agreements and any Subadvisory Agreements with
Affiliated Subadvisors will remain subject to the shareholder approval
requirements of section 15(a) of the Act and rule 18f-2 under the Act.
7. If a new Subadvisor is retained in reliance on the requested
order, the Funds will inform shareholders of the hiring of a new
Subadvisor pursuant to the following procedures (``Modified Notice and
Access Procedures''): (a) within 90 days after a new Subadvisor is
hired for any Fund, that Fund will send its shareholders either a
Multi-manager Notice or a Multi-manager Notice and Multi-manager
Information Statement; \4\ and (b) the 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 the application, a
proxy solicitation to approve the appointment of new Subadvisors
provides no more meaningful information to shareholders than the
proposed Multi-manager Information Statement. Moreover, the Board will
comply with the requirements of sections 15(a) and 15(c) of the 1940
Act before entering into or amending Subadvisory Agreements.
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\4\ A ``Multi-manager Notice'' will be modeled on a Notice of
Internet Availability as defined in rule 14a-16 under the Exchange
Act, and specifically will, among other things: (a) Summarize the
relevant information regarding the new Subadvisor; (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 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, except as
modified by the requested order to permit Aggregate Fee Disclosure.
Multi-manager Information Statements will be filed electronically
with the Commission via the EDGAR system.
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8. Applicants assert that the requested disclosure relief would
benefit shareholders of the Funds because it would improve the
Advisor's ability to negotiate the fees paid to Subadvisors. Applicants
state that the Advisor may be able to negotiate rates that are below a
Subadvisor's ``posted'' amounts if the Advisor is not required to
disclose the Subadvisors' fees to the public.
Applicants' Conditions
Applicants agree that any order granting the requested relief will
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
sole initial shareholder before offering the Fund's shares to the
public.
2. The prospectus for each Fund will disclose the existence,
substance, and effect of any order granted pursuant to the application.
Each Fund will hold itself out to the public as employing the Manager
of Managers Structure. The prospectus will prominently disclose that
the Advisor has ultimate responsibility (subject to oversight by the
Board) to oversee the Subadvisors and recommend their hiring,
termination, and replacement.
3. Funds will inform shareholders of the hiring of a new Subadvisor
within 90 days after the hiring of a new Subadvisor pursuant to the
Modified Notice and Access Procedures.
4. The Advisor will not enter into a Subadvisory Agreement with any
Affiliated Subadvisor without that 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 and selection of new or
additional Independent Trustees will be placed within the discretion of
the then-existing Independent Trustees.
6. When a Subadvisor change is proposed for a Fund with an
Affiliated Subadvisor, the Board, including a majority of the
Independent Trustees, will make a separate finding, reflected in the
applicable 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 Advisor or the Affiliated Subadvisor derives an
inappropriate advantage.
7. Independent legal counsel, as defined in rule 0-1(a)(6) under
the Act, will be engaged to represent the Independent Trustees. The
selection of such counsel will be within the discretion of the then
existing Independent Trustees.
8. Each Advisor will provide the Board, no less frequently than
quarterly,
[[Page 67032]]
with information about the profitability of the Advisor on a per-Fund
basis. The information will reflect the impact on profitability of the
hiring or termination of any Subadvisor during the applicable quarter.
9. Whenever a Subadvisor is hired or terminated, the Advisor will
provide the Board with information showing the expected impact on the
profitability of the Advisor.
10. The Advisor will provide general management services to each
Fund, including overall supervisory responsibility for the general
management and investment of the Fund's assets and, subject to review
and approval of the Board, will (i) Set each Fund's overall investment
strategies; (ii) evaluate, select and recommend Subadvisors to manage
all or part of a Fund's assets; (iii) when appropriate, allocate and
reallocate a Fund's assets among multiple Subadvisors; (iv) monitor and
evaluate the performance of Subadvisors; and (v) implement procedures
reasonably designed to ensure that the Subadvisors comply with each
Fund's investment objective, policies and restrictions.
11. No trustee or officer of the Trust, or of a Fund, or director
or officer of the Advisor, will own directly or indirectly (other than
through a pooled investment vehicle that is not controlled by such
person) any interest in a Subadvisor, except for (a) ownership of
interests in the Advisor or any entity that controls, is controlled by,
or is under common control with the Advisor; or (b) 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 Subadvisor or an entity that
controls, is controlled by, or is under common control with a
Subadvisor.
12. Each Fund will disclose in its registration statement the
Aggregate Fee Disclosure.
13. 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.
For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27288 Filed 11-7-12; 8:45 am]
BILLING CODE 8011-01-P
