Highland Associates, Inc. and Financial Investors Trust; Notice of Application, 68854-68856 [2012-27875]

Download as PDF 68854 Federal Register / Vol. 77, No. 222 / Friday, November 16, 2012 / Notices specified in Section IV above shall be final 30 days from the date this Order is published in the Federal Register without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received. If a hearing or ADR is requested, the effective date of this Order shall be determined in accordance with the hearing or ADR process. Dated at Rockville, Maryland, this 6th day of November, 2012. For the Nuclear Regulatory Commission. Roy P. Zimmerman, Director, Office of Enforcement. [FR Doc. 2012–27930 Filed 11–15–12; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 30259; 812–14006] Highland Associates, Inc. and Financial Investors Trust; Notice of Application November 9, 2012. Securities and Exchange Commission (the ‘‘Commission’’). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940, as amended (the ‘‘Act’’), for an exemption from section 15(a) of the Act and rule 18f–2 under the Act. AGENCY: Summary of Application: Applicants request an order that would permit them to enter into and materially amend subadvisory agreements without shareholder approval. APPLICANTS: Highland Associates, Inc. (the ‘‘Adviser’’) and Financial Investors Trust (the ‘‘Trust’’), on behalf of the Redmont Resolute Fund I and Redmont Resolute Fund II (the ‘‘Redmont Funds’’). SUMMARY: Filing Dates: The application was filed on February 2, 2012, and amended on July 17, 2012, and October 16, 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 December 4, 2012, and should be accompanied by proof of service on the applicants, in the form of mstockstill on DSK4VPTVN1PROD with NOTICES DATES: VerDate Mar<15>2010 15:43 Nov 15, 2012 Jkt 229001 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: c/o JoAnn Strasser, Thompson Hine LLP, 41 South High Street, 17th Floor, Columbus OH 43215. FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at (202) 551–6876, or Mary Kay Frech, Branch Chief, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or an applicant using the Company name box, at https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicants’ Representations 1. The Trust, a Delaware statutory trust, is registered under the Act as an open-end management investment company and is comprised of individual series, including the Redmont Funds, each with its own investment objective, policies and restrictions.1 The Adviser, an Alabama corporation, is, and each other Adviser will be, registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the ‘‘Advisers Act’’). The Adviser serves as the investment adviser of the Redmont Funds and will serve as investment adviser to the future Funds. 1 Applicants also request relief with respect to any existing or future series of the Trust and any other existing or future registered open-end management investment company or series thereof that: (a) Is advised by the Adviser or any entity controlling, controlled by, or under common control with the Adviser or its successors (included within the term ‘‘Adviser’’); (b) uses the manager of managers structure (the ‘‘Manager of Managers Structure’’) described in the application; and (c) complies with the terms and conditions of the application (together with the Redmont Funds, the ‘‘Funds’’ and each, individually, a ‘‘Fund’’). For purposes of the requested order, ‘‘successor’’ is limited to any entity or entities that result from a reorganization of the Adviser into another jurisdiction or a change in the type of business organization. The only existing registered open-end investment company that currently intends to rely on the order is named as an applicant. The Redmont Funds are the only Funds that currently intend to rely on the requested order. If the name of any Fund contains the name of a Subadviser (as defined below), the name of the Adviser will precede the name of the Subadviser. PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 The Redmont Funds have entered into an investment advisory agreement with the Adviser (the ‘‘Advisory Agreement’’),2 approved by the Trust’s board of trustees (the ‘‘Board’’),3 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 (the ‘‘Independent Trustees’’), and by shareholders representing a majority of each Redmont Fund’s shares. 2. Under the terms of the Advisory Agreement, the Adviser is responsible for the overall management of each Redmont Fund’s business affairs and selecting investments according to their respective investment objectives, policies and restrictions. For the investment management services that it provides to a Redmont Fund, the Adviser receives the fee specified in the Advisory Agreement. The Advisory Agreement also permits the Adviser to retain one or more subadvisers for the purpose of managing the investments of all or a portion of the assets of the Redmont Funds. Pursuant to this authority, the Adviser may enter into investment subadvisory agreements with unaffiliated investment subadvisers (‘‘Subadvisers’’) to provide investment advisory services to the Redmont Funds (each, a ‘‘Subadvisory Agreement’’ and together, the ‘‘Subadvisory Agreements’’).4 Each Subadviser will be registered as an investment adviser under the Advisers Act. The Adviser will supervise, evaluate and allocate assets to the Subadvisers, and make recommendations to the Board about their hiring, retention or release, at all times subject to the authority of the Board. The Adviser will compensate each Subadviser out of the fees paid to the Adviser under the Advisory Agreement. 3. Applicants request an order to permit the Adviser, subject to Board approval, to enter into and materially amend Subadvisory Agreements without obtaining shareholder approval. 2 The Adviser will enter into substantially similar investment advisory agreements to provide investment management services to future Funds (‘‘Future Advisory Agreements’’). The terms of Future Advisory Agreements will comply with section 15(a) of the Act and Future Advisory Agreements will be approved by shareholders and by the Board, including a majority of the Independent Trustees, in the manner required by sections 15(a) and 15(c) of the Act and rule 18f–2 thereunder. References to any Advisory Agreement include Future Advisory Agreements as they pertain to future Funds. 3 The term ‘‘Board’’ also includes the board of trustees or directors of a future Fund, if different. 4 The Redmont Funds do not currently employ Subadvisers, but each anticipates doing so in the future. E:\FR\FM\16NON1.SGM 16NON1 Federal Register / Vol. 77, No. 222 / Friday, November 16, 2012 / Notices 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 the Trust, a Fund or the Adviser, other than by reason of serving as a subadviser to one or more of the Funds (an ‘‘Affiliated Subadviser’’). 4. 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 Subadviser 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; 5 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 Subadvisers provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Moreover, as indicated above, the Board would comply with the requirements of sections 15(a) and 15(c) of the Act before entering into or amending Subadvisory Agreements. mstockstill on DSK4VPTVN1PROD with NOTICES 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 5 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 Subadviser; (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. Multimanager Information Statements will be filed electronically with the Commission via the EDGAR system. VerDate Mar<15>2010 15:43 Nov 15, 2012 Jkt 229001 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. 3. Applicants assert that the shareholders expect the Adviser and the Board to select the Subadvisers for the Funds that are best suited to achieve each Fund’s investment objective. 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. Applicants state that requiring shareholder approval of each Subadvisory Agreement would impose costs and unnecessary delays on the Funds, and may preclude the Adviser from acting promptly in a manner considered advisable by the Board. Applicants note that the Advisory Agreement and any Subadvisory Agreement with an Affiliated Subadviser will remain subject to section 15(a) of the Act and rule 18f-2 under the Act, including the requirement for shareholder voting. 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 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. 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 ultimate responsibility (subject to oversight by the Board) to oversee the Subadvisers PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 68855 and recommend their hiring, termination, and replacement. 3. Funds will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures. 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 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 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 review and approval of the Board, will: (a) Set each Fund’s overall investment strategies; (b) evaluate, select and recommend Subadvisers to manage all or a 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 a 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 publicly traded company that is either a Subadviser or an entity that controls, is controlled by, or is under common control with a Subadviser. E:\FR\FM\16NON1.SGM 16NON1 68856 Federal Register / Vol. 77, No. 222 / Friday, November 16, 2012 / Notices 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. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–27875 Filed 11–15–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68202; File Nos. SR–Phlx– 2012–27; SR–Phlx–2012–54] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing of Amendments No. 1, and Order Granting Accelerated Approval for Proposed Rule Changes as Modified by Amendments No. 1 Relating to Complex Order Fees and Rebates for Adding and Removing Liquidity in Select Symbols November 9, 2012. SECURITIES AND EXCHANGE COMMISSION mstockstill on DSK4VPTVN1PROD with NOTICES Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Closed Meeting on Wednesday, November 14, 2012 at 9:30 a.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(4), (8), (9)(A)(i) and (ii), and 17 CFR 200.402(a)(4), (8), (9)(A)(i) and (ii), permit consideration of the scheduled matter at the Closed Meeting. Commissioner Walter, as duty officer, voted to consider the item listed for the Closed Meeting in a closed session, and determined that no earlier notice was possible. The subject matter of the Closed Meeting will be an examination of a financial institution. At times, changes in Commission priorities require alterations in the scheduling of meeting item. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Dated: November 13, 2012. Elizabeth M. Murphy, Secretary. [FR Doc. 2012–28048 Filed 11–14–12; 4:15 pm] BILLING CODE 8011–01–P VerDate Mar<15>2010 15:43 Nov 15, 2012 Jkt 229001 I. Introduction On March 1, 2012 and April 23, 2012, NASDAQ OMX PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 two proposed rule changes relating to the transaction fees for certain complex order (‘‘Complex Order’’) transactions.3 The notice of filing of Phlx–2012–27 was published for comment in the Federal Register on March 15, 2012,4 and the notice of filing of Phlx–2012–54 was published for comment in the Federal Register on May 4, 2012.5 On April 30, 2012, the Commission suspended the proposals and instituted proceedings to determine whether to approve or disapprove the proposals.6 Following the institution of the proceedings, the Commission received a letter from the Exchange in support of its proposals.7 On September 11, 2012, 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 A Complex Order is any order involving the simultaneous purchase and/or sale of two or more different options series in the same underlying security, priced at a net debit or credit based on the relative prices of the individual components, for the same account, for the purpose of executing a particular investment strategy. A Complex Order may also be a stock-option order, which is an order to buy or sell a stated number of units of an underlying stock or exchange-traded fund (‘‘ETF’’) coupled with the purchase or sale of options contract(s). See Exchange Rule 1080, Commentary .08(a)(i). 4 See Securities Exchange Act Release No. 66551 (March 9, 2012), 77 FR 15400 (SR–Phlx–2012–27) (‘‘Notice I’’). 5 See Securities Exchange Act Release No. 66883 (April 30, 2012), 77 FR 26591 (SR–Phlx–2012–54) (‘‘Notice II’’). 6 See Securities Exchange Act Release No. 66884 (April 30, 2012), 77 FR 26595 (May 4, 2012) (‘‘Order Instituting Proceedings’’). The Order Instituting Proceedings suspended the fees adopted in SR– Phlx–2012–27 and SR–Phlx–2012–54. Consequently, these fees were in effect for only two months, from March 1, 2012 to April 30, 2012. 7 See Letter from Joan C. Conley, Senior Vice President and Corporate Secretary, Nasdaq OMX, to 2 17 PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 the Commission issued a notice of designation of a longer period for Commission action on the proceedings to determine whether to disapprove the proposed rule changes.8 On October 24, 2012, the Exchange filed Amendment No. 1 to each of the proposed rule changes. In the amendments, the Exchange proposed to put certain of the fees (for Complex Order executions by Directed Participants 9 and Market Makers) 10 on a one-year pilot program, and stated that the proposed fees would be operative on December 3, 2012. The Exchange committed to provide publicly available data and data analyses of those fees to the Commission during the pilot.11 The Exchange also represented that, prior to and at the time of a complex order transaction, Market Makers, including Directed Participants, are unaware of the identity of the contra-party to the transaction. The Exchange stated that Rule 707 is intended to prohibit coordinated actions between Directed Participants and order flow providers (‘‘OFPs’’), and that the Exchange proactively conducts surveillance for, and enforces against, such violations.12 The Commission received no comment letters on the proposals. This order approves the proposed rule changes, as modified by Amendments No. 1, and approves, as a one-year pilot program, those fees which the Exchange proposes to implement on a pilot basis. II. Description of the Proposals The Exchange’s first proposal amended Complex Order fees and rebates for adding and removing liquidity in its Select Symbols.13 Specifically, Phlx’s proposal: (1) Increased the customer rebate for adding liquidity from $0.30 per contract to Elizabeth M. Murphy, Secretary, Commission, dated July 26, 2012 (‘‘Response’’). 8 See Securities Exchange Act Release No. 67825 (September 11, 2012), 77 FR 57168 (September 17, 2012). 9 The term ‘‘Directed Participant’’ applies to transactions for the account of a Specialist, Streaming Quote Trader (‘‘SQT’’) or Remote Streaming Quote Trader (‘‘RSQT’’) resulting from a Customer order that is (1) directed to the Specialist, SQT or RSQT by an order flow provider, and (2) executed by that Specialist, SQT or RSQT electronically on Phlx XL II. See Phlx Fee Schedule at 3. 10 A ‘‘Market Maker’’ includes Specialists (see Exchange Rule 1020) and Registered Options Traders (‘‘ROTs’’) (see Exchange Rule 1014(b)(i) and (ii), which includes SQTs (see Exchange Rule 1014(b)(ii)(A)) and RSQTs (see Exchange Rule 1014(b)(ii)(B)). 11 See Amendment No. 1 to SR–Phlx–2012–27 and SR–Phlx–2012–54, filed October 24, 2012. 12 See Amendment No. 1 to each filing, supra note 11. 13 The Select Symbols are listed in Section I of the Phlx Fee Schedule. E:\FR\FM\16NON1.SGM 16NON1

Agencies

[Federal Register Volume 77, Number 222 (Friday, November 16, 2012)]
[Notices]
[Pages 68854-68856]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27875]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30259; 812-14006]


Highland Associates, Inc. and Financial Investors Trust; Notice 
of Application

November 9, 2012.
AGENCY: Securities and Exchange Commission (the ``Commission'').

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

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

Applicants: Highland Associates, Inc. (the ``Adviser'') and Financial 
Investors Trust (the ``Trust''), on behalf of the Redmont Resolute Fund 
I and Redmont Resolute Fund II (the ``Redmont Funds'').

DATES: Filing Dates: The application was filed on February 2, 2012, and 
amended on July 17, 2012, and October 16, 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 December 4, 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: c/
o JoAnn Strasser, Thompson Hine LLP, 41 South High Street, 17th Floor, 
Columbus OH 43215.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876, or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at https://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Trust, a Delaware statutory trust, is registered under the 
Act as an open-end management investment company and is comprised of 
individual series, including the Redmont Funds, each with its own 
investment objective, policies and restrictions.\1\ The Adviser, an 
Alabama corporation, is, and each other Adviser will be, registered as 
an investment adviser under the Investment Advisers Act of 1940, as 
amended (the ``Advisers Act''). The Adviser serves as the investment 
adviser of the Redmont Funds and will serve as investment adviser to 
the future Funds. The Redmont Funds have entered into an investment 
advisory agreement with the Adviser (the ``Advisory Agreement''),\2\ 
approved by the Trust's board of trustees (the ``Board''),\3\ 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 
(the ``Independent Trustees''), and by shareholders representing a 
majority of each Redmont Fund's shares.
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    \1\ Applicants also request relief with respect to any existing 
or future series of the Trust and any other existing or future 
registered open-end management investment company or series thereof 
that: (a) Is advised by the Adviser or any entity controlling, 
controlled by, or under common control with the Adviser or its 
successors (included within the term ``Adviser''); (b) uses the 
manager of managers structure (the ``Manager of Managers 
Structure'') described in the application; and (c) complies with the 
terms and conditions of the application (together with the Redmont 
Funds, the ``Funds'' and each, individually, a ``Fund''). For 
purposes of the requested order, ``successor'' is limited to any 
entity or entities that result from a reorganization of the Adviser 
into another jurisdiction or a change in the type of business 
organization. The only existing registered open-end investment 
company that currently intends to rely on the order is named as an 
applicant. The Redmont Funds are the only Funds that currently 
intend to rely on the requested order. If the name of any Fund 
contains the name of a Subadviser (as defined below), the name of 
the Adviser will precede the name of the Subadviser.
    \2\ The Adviser will enter into substantially similar investment 
advisory agreements to provide investment management services to 
future Funds (``Future Advisory Agreements''). The terms of Future 
Advisory Agreements will comply with section 15(a) of the Act and 
Future Advisory Agreements will be approved by shareholders and by 
the Board, including a majority of the Independent Trustees, in the 
manner required by sections 15(a) and 15(c) of the Act and rule 18f-
2 thereunder. References to any Advisory Agreement include Future 
Advisory Agreements as they pertain to future Funds.
    \3\ The term ``Board'' also includes the board of trustees or 
directors of a future Fund, if different.
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    2. Under the terms of the Advisory Agreement, the Adviser is 
responsible for the overall management of each Redmont Fund's business 
affairs and selecting investments according to their respective 
investment objectives, policies and restrictions. For the investment 
management services that it provides to a Redmont Fund, the Adviser 
receives the fee specified in the Advisory Agreement. The Advisory 
Agreement also permits the Adviser to retain one or more subadvisers 
for the purpose of managing the investments of all or a portion of the 
assets of the Redmont Funds. Pursuant to this authority, the Adviser 
may enter into investment subadvisory agreements with unaffiliated 
investment subadvisers (``Subadvisers'') to provide investment advisory 
services to the Redmont Funds (each, a ``Subadvisory Agreement'' and 
together, the ``Subadvisory Agreements'').\4\ Each Subadviser will be 
registered as an investment adviser under the Advisers Act. The Adviser 
will supervise, evaluate and allocate assets to the Subadvisers, and 
make recommendations to the Board about their hiring, retention or 
release, at all times subject to the authority of the Board. The 
Adviser will compensate each Subadviser out of the fees paid to the 
Adviser under the Advisory Agreement.
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    \4\ The Redmont Funds do not currently employ Subadvisers, but 
each anticipates doing so in the future.
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    3. Applicants request an order to permit the Adviser, subject to 
Board approval, to enter into and materially amend Subadvisory 
Agreements without obtaining shareholder approval.

[[Page 68855]]

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 the 
Trust, a Fund or the Adviser, other than by reason of serving as a 
subadviser to one or more of the Funds (an ``Affiliated Subadviser'').
    4. 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 Subadviser 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; \5\ 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 Subadvisers provides no 
more meaningful information to shareholders than the proposed Multi-
manager Information Statement. Moreover, as indicated above, the Board 
would comply with the requirements of sections 15(a) and 15(c) of the 
Act before entering into or amending Subadvisory Agreements.
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    \5\ 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 Subadviser; (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. Multi-
manager Information Statements will be filed electronically with the 
Commission via the EDGAR system.
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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.
    3. Applicants assert that the shareholders expect the Adviser and 
the Board to select the Subadvisers for the Funds that are best suited 
to achieve each Fund's investment objective. 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. Applicants state that requiring shareholder 
approval of each Subadvisory Agreement would impose costs and 
unnecessary delays on the Funds, and may preclude the Adviser from 
acting promptly in a manner considered advisable by the Board. 
Applicants note that the Advisory Agreement and any Subadvisory 
Agreement with an Affiliated Subadviser will remain subject to section 
15(a) of the Act and rule 18f-2 under the Act, including the 
requirement for shareholder voting.

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 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. 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 ultimate responsibility 
(subject to oversight by the Board) to oversee the Subadvisers and 
recommend their hiring, termination, and replacement.
    3. Funds will inform shareholders of the hiring of a new Subadviser 
within 90 days after the hiring of the new Subadviser pursuant to the 
Modified Notice and Access Procedures.
    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 then-
existing 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 
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 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 review 
and approval of the Board, will: (a) Set each Fund's overall investment 
strategies; (b) evaluate, select and recommend Subadvisers to manage 
all or a 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 a 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 publicly traded company that is either a Subadviser or an 
entity that controls, is controlled by, or is under common control with 
a Subadviser.

[[Page 68856]]

    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.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27875 Filed 11-15-12; 8:45 am]
BILLING CODE 8011-01-P
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