Credit Suisse Opportunity Funds, et al.; Notice of Application, 2453-2456 [2013-00434]

Download as PDF mstockstill on DSK4VPTVN1PROD with Federal Register / Vol. 78, No. 8 / Friday, January 11, 2013 / Notices hearing in this proceeding if the Secretary has not already established an electronic docket. Information about applying for a digital ID certificate is available on the NRC’s public Web site at http:// www.nrc.gov/site-help/e-submittals/ apply-certificates.html. System requirements for accessing the ESubmittal server are detailed in the NRC’s ‘‘Guidance for Electronic Submission,’’ which is available on the NRC’s public Web site at http:// www.nrc.gov/site-help/esubmittals.html. Participants may attempt to use other software not listed on the Web site, but should note that the NRC’s E-Filing system does not support unlisted software, and the NRC Meta System Help Desk will not be able to offer assistance in using unlisted software. If a participant is electronically submitting a document to the NRC in accordance with the E-Filing rule, the participant must file the document using the NRC’s online, Web-based submission form. In order to serve documents through the Electronic Information Exchange System, users will be required to install a Web browser plug-in from the NRC’s public Web site. Further information on the Web-based submission form, including the installation of the Web browser plug-in, is available on the NRC’s public Web site at http://www.nrc.gov/sitehelp/e-submittals.html. Once a participant has obtained a digital ID certificate and a docket has been created, the participant can then submit a request for hearing or petition for leave to intervene. Submissions should be in Portable Document Format (PDF) in accordance with NRC guidance available on the NRC’s public Web site at http://www.nrc.gov/site-help/esubmittals.html. A filing is considered complete at the time the documents are submitted through the NRC’s E-Filing system. To be timely, an electronic filing must be submitted to the E-Filing system no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of a transmission, the E-Filing system time-stamps the document and sends the submitter an email notice confirming receipt of the document. The E-Filing system also distributes an email notice that provides access to the document to the NRC’s Office of the General Counsel and any others who have advised the Office of the Secretary that they wish to participate in the proceeding, so that the filer need not serve the documents on those participants separately. Therefore, applicants and other participants (or their counsel or representative) must VerDate Mar<15>2010 16:38 Jan 10, 2013 Jkt 229001 apply for and receive a digital ID certificate before a hearing request/ petition to intervene is filed so that they can obtain access to the document via the E-Filing system. A person filing electronically using the NRC’s adjudicatory E-Filing system may seek assistance by contacting the NRC Meta System Help Desk through the ‘‘Contact Us’’ link located on the NRC’s public Web site at http:// www.nrc.gov/site-help/esubmittals.html, by email to MSHD.Resource@nrc.gov, or by a tollfree call to 1–866–672–7640. The NRC Meta System Help Desk is available between 8 a.m. and 8 p.m., Eastern Time, Monday through Friday, excluding government holidays. Participants who believe that they have a good cause for not submitting documents electronically must file an exemption request, in accordance with 10 CFR 2.302(g), with their initial paper filing requesting authorization to continue to submit documents in paper format. Such filings must be submitted by: (1) First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555– 0001, Attention: Rulemaking and Adjudications Staff; or (2) courier, express mail, or expedited delivery service to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by firstclass mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. A presiding officer, having granted an exemption request from using E-Filing, may require a participant or party to use E-Filing if the presiding officer subsequently determines that the reason for granting the exemption from use of E-Filing no longer exists. Documents submitted in adjudicatory proceedings will appear in NRC’s electronic hearing docket which is available to the public at http:// ehd1.nrc.gov/ehd/, unless excluded pursuant to an order of the Commission, or the presiding officer. Participants are requested not to include personal privacy information, such as social security numbers, home addresses, or home phone numbers in their filings, unless an NRC regulation or other law requires submission of such information. With respect to PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 2453 copyrighted works, except for limited excerpts that serve the purpose of the adjudicatory filings and would constitute a Fair Use application, participants are requested not to include copyrighted materials in their submission. The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the Federal Register and served on the parties to the hearing. Within 30 days from the date of publication of this notice, persons may submit written comments regarding the license transfer application, as provided for in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of this Federal Register notice. For further details with respect to this application, see the application dated September 27, 2012. Dated at Rockville, Maryland, this 2nd day of January 2013. For the Nuclear Regulatory Commission. Alan B. Wang, Project Manager, Plant Licensing Branch IV, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. 2013–00479 Filed 1–10–13; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–30342; 812–14015] Credit Suisse Opportunity Funds, et al.; Notice of Application January 7, 2013. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from sections 12(d)(1)(A) and (B) of the Act, and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act. AGENCY: Summary of Application: The order would permit certain registered closed-end management investment SUMMARY: E:\FR\FM\11JAN1.SGM 11JAN1 2454 Federal Register / Vol. 78, No. 8 / Friday, January 11, 2013 / Notices companies to acquire shares of registered open-end management investment companies that are within the same group of investment companies. Applicants: Credit Suisse Opportunity Funds (‘‘Opportunity Funds’’), Credit Suisse Commodity Strategy Funds (‘‘Commodity Strategy Funds’’), Credit Suisse High Yield Bond Fund (‘‘High Yield Bond Fund’’), Credit Suisse Asset Management Income Fund, Inc. (‘‘Income Fund’’); Credit Suisse Asset Management, LLC (‘‘Adviser’’), and Credit Suisse Securities (USA) LLC (‘‘CSSU’’).1 DATES: Filing Dates: The application was filed on March 15, 2012, and amended on August 23, 2012, December 14, 2012, January 3, 2013, and January 4, 2013. 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 February 1, 2013 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: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington DC 20549–1090; Applicants, c/o Joanne Doldo, Esq., Credit Suisse Asset Management, LLC, One Madison Avenue, New York, NY 10010. FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, at (202) 551–6812 or David P. Bartels, Branch Chief, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The mstockstill on DSK4VPTVN1PROD with 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 http:// 1 Each Fund (as defined below) that currently intends to rely on the requested order is named as an applicant. Any Fund that relies on the order in the future will do so only in accordance with the terms and conditions contained in the application, as amended. VerDate Mar<15>2010 16:38 Jan 10, 2013 Jkt 229001 www.sec.gov/search/search.htm, or by calling (202) 551–8090. Applicants’ Representations 1. Opportunity Funds and Commodity Strategy Funds are organized as Delaware statutory trusts. Each is an open-end management investment company registered under the Act and is comprised of separate series that pursue distinct investment objectives and strategies. 2. The High Yield Bond Fund is organized as a Delaware statutory trust. The Income Fund (together with the High Yield Bond Fund, the ‘‘Applicant Investing Funds’’) is organized as a Maryland corporation. Each Applicant Investing Fund is registered under the Act as a closed-end management investment company. The Applicant Investing Funds invest or will invest in a variety of debt and/or equity securities or other financial instruments in accordance with their respective investment objectives and policies. 3. The Adviser, a Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940, and serves as the investment adviser to each of the existing Funds (as defined below). The Adviser is a wholly owned subsidiary of CSAM Americas Holding Corp., a holding company that is ultimately wholly owned by Credit Suisse Group. CSSU, a Delaware limited liability company, is a broker-dealer registered under the Securities Exchange Act of 1934. CSSU serves as principal underwriter and distributor for the shares of the Underlying Funds. CSSU is a wholly owned subsidiary of Credit Suisse (USA), Inc., a holding company that is ultimately wholly owned by Credit Suisse Group. 4. Applicants state that each of the Investing Funds (as defined below) would like the flexibility to invest, subject to and consistent with its investment objectives, policies, and restrictions, in the Underlying Funds in excess of the limits set out in sections 12(d)(1)(A) and (B) of the Act. Accordingly, Applicants seek an order of the Commission pursuant to Section 12(d)(1)(J) of the Act, granting an exemption from Sections 12(d)(1)(A) and (B) of the Act, and under Sections 6(c) and 17(b) of the Act, granting an exemption from Section 17(a) of the Act, to the extent necessary to permit (a) each of the Applicant Investing Funds to purchase shares of Opportunity Funds or Commodity Strategies Funds or their series (the ‘‘Underlying Funds’’) and (b) the Underlying Funds to sell their shares to, and redeem their shares from, the Applicant Investing Funds. PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 5. Applicants request that the relief also apply to any future registered closed-end management investment company advised by the Adviser or any entity controlling, controlled by, or under common control with the Adviser (together with the Applicant Investing Funds, the ‘‘Investing Funds’’) that wishes to invest in a registered openend 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, and (b) is part of the same ‘‘group of investment companies,’’ as defined in section 12(d)(1)(G)(ii) as the Investing Funds (included in the term ‘‘Underlying Funds’’). The Investing Funds and the Underlying Funds are referred to herein as the ‘‘Funds.’’ 6. The Adviser believes that it may, from time to time, be more efficient for the Investing Funds to gain exposure to particular investment styles and/or asset classes by investing in one or more Underlying Funds. In particular, applicants note that if the total amount of an Investing Fund’s desired exposure to a particular investment style or asset class is small, an investment in an Underlying Fund may enable an Investing Fund to obtain such exposure on a significantly more diversified basis than would be possible through a direct investment in such securities. 7. An Underlying Fund may invest up to 25% of its assets in a wholly-owned and controlled subsidiary of the Underlying Fund, organized under the laws of the Cayman Islands or another non-U.S. jurisdiction (a ‘‘Cayman Subsidiary’’) in order to invest in commodity-related instruments and certain other instruments. The Adviser will serve as the investment adviser to both such Underlying Fund and Cayman Subsidiary. The Cayman Subsidiary is created for the purpose of assuring that the Underlying Fund continues to qualify as a regulated investment company for U.S. federal income tax purposes. Applicants’ Legal Analysis A. Section 12(d)(1) of the Act 1. Section 12(d)(1)(A) provides that no registered investment company may acquire securities of another investment company if such securities represent more than 3% of the acquired company’s outstanding voting stock, more than 5% of the acquiring company’s total assets, or if such securities, together with the securities of other investment companies, represent more than 10% of the acquiring company’s total assets. Section E:\FR\FM\11JAN1.SGM 11JAN1 mstockstill on DSK4VPTVN1PROD with Federal Register / Vol. 78, No. 8 / Friday, January 11, 2013 / Notices 12(d)(1)(B) provides that no registered open-end investment company, its principal underwriter or any broker or dealer may sell the company’s securities to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company’s voting stock or cause more than 10% of the acquired company’s voting stock to be owned by investment companies. 2. Section 12(d)(1)(G) of the Act provides, in relevant part, that section 12(d)(1) will not apply to the securities of a registered open-end investment company purchased by another registered open-end investment company, if: (a) The acquiring company and the acquired company are part of the same group of investment companies; (b) the acquiring company holds only securities of acquired companies that are part of the same group of investment companies, government securities and short-term paper; (c) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the Exchange Act or by the Commission; and (d) the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act. Section 12(d)(1)(G)(ii) defines a ‘‘group of investment companies’’ as ‘‘any 2 or more registered investment companies that hold themselves out to investors as related for purposes of investment and investor services.’’ Applicants state that they may not rely on section 12(d)(1)(G) because the Investing Funds are closedend management investment companies. 3. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction from any provision of section 12(d)(1), if the exemption is consistent with the public interest and the protection of investors. Applicants seek an exemption under section 12(d)(1)(J) to permit the Investing Funds to acquire shares of Underlying Funds, and Underlying Funds to sell their shares to the Investing Funds, beyond the limits in sections 12(d)(1)(A) and (B). 4. Applicants state that the proposed arrangement will not raise the policy concerns underlying sections 12(d)(1)(A) and (B), including undue influence by a fund of funds over VerDate Mar<15>2010 16:38 Jan 10, 2013 Jkt 229001 underlying funds, excessive layering of fees, and overly complex fund structures. Accordingly, applicants believe that the requested exemption is consistent with the public interest and the protection of investors. 5. Applicants contend that the proposed arrangement will not result in undue influence by an Investing Fund over an Underlying Fund because the Investing Fund and the Underlying Fund will be advised by the Adviser or an entity controlling, controlled by, or under common control with the Adviser, and will be part of the same group of investment companies. Applicants state that the Commission, and Congress in the enactment of section 12(d)(1)(G), have recognized that fund of funds arrangements that involve funds in the same group of investment companies may not present the same concerns regarding control of one fund by another.2 6. Applicants do not believe that the proposed arrangement will involve excessive layering of fees. With respect to investment advisory fees, applicants state that, before approving any investment advisory contract under section 15 of the Act, the board of trustees or directors of each Investing Fund, including a majority of the trustees who are not ‘‘interested persons’’ (as defined in section 2(a)(19) of the Act) of the Investing Fund, will find that advisory fees, if any, charged under the advisory contract are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to any Underlying Fund’s advisory contract. 7. In addition, applicants state that any sales charges and/or service fees charged with respect to shares of an Investing Fund will not exceed the limits applicable to a fund of funds set forth in NASD Conduct Rule 2830.3 Applicants state that, although investors may incur brokerage commissions in connection with market purchases of the Investing Funds’ shares, these commissions will not differ from commissions otherwise incurred in connection with the purchase or sale of comparable securities. 8. Applicants contend that the proposed arrangement will not create an overly complex fund structure. Applicants state that no Underlying Fund will acquire securities of any investment company or company 2 Applicants assert that the omission of closedend funds from section 12(d)(1)(G) does not represent a determination by Congress that similar relief should not be provided to closed-end funds. 3 Any references to NASD Conduct Rule 2830 include any successor or replacement FINRA Rule to NASD Conduct Rule 2830. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 2455 relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits of section 12(d)(1)(A), except to the extent that such Underlying Fund receives securities of another investment company as a dividend or as a result of a plan or reorganization of a company (other than a plan devised for the purpose of evading section 12(d)(1) of the Act), acquires, or is deemed to have acquired, the securities pursuant to exemptive relief from the Commission permitting such Underlying Fund to (a) acquire securities of one or more affiliated investment companies or companies relying on section 3(c)(1) or 3(c)(7) for short-term cash management purposes, or (b) engage in interfund borrowing and lending transactions, or invests in a Cayman Subsidiary that is a wholly-owned and controlled subsidiary of the Underlying Fund. Further, no Cayman Subsidiary will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act other than money market funds that comply with rule 2a–7 for shortterm cash management purposes. 9. Applicants state that investments by an Underlying Fund in a Cayman Subsidiary also do not raise concerns about undue influence, layering of fees, and complex structures. Applicants represent that: (a) The Underlying Fund will be the sole and legal beneficial owner of its Cayman Subsidiary, which addresses concerns regarding pyramiding of voting control as a means of undue influence; (b) the Adviser will manage the investments of both the Underlying Fund and its Cayman Subsidiary, which addresses concerns over undue influence by the Adviser; and (c) there will be no inappropriate layering of fees and expenses as a result of an Underlying Fund investing in a Cayman Subsidiary. Applicants further represent that the financial statements of the Cayman Subsidiary will be consolidated with those of the Underlying Fund, if permitted by the applicable accounting standards. In addition, in assessing compliance with the asset coverage requirements under section 18(f) of the Act, an Underlying Fund will deem the assets, liabilities, and indebtedness of a Cayman Subsidiary in which the Underlying Fund invests as its own. Finally, the expenses of the Cayman Subsidiary will be included in the total annual fund operating expenses in the prospectus of the Underlying Fund. B. Section 17(a) of the Act 1. Section 17(a) of the Act generally prohibits purchases and sales of securities, on a principal basis, between E:\FR\FM\11JAN1.SGM 11JAN1 mstockstill on DSK4VPTVN1PROD with 2456 Federal Register / Vol. 78, No. 8 / Friday, January 11, 2013 / Notices a registered investment company and any affiliated person of the company, and affiliated persons of such persons. Section 2(a)(3) of the Act defines an ‘‘affiliated person’’ of another person to include, among other things, any person directly or indirectly owning, controlling or holding with power to vote 5% or more of the other’s outstanding voting securities; any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the other person; any person directly or indirectly controlling, controlled by, or under common control with the other person; and any investment adviser to an investment company. Applicants state that an Underlying Fund might be deemed to be an affiliated person of an Investing Fund if the Investing Fund acquires 5% or more of the Underlying Fund’s outstanding voting securities. Applicants also state that, because the Investing Funds and Underlying Funds will be advised by the Adviser, or a control affiliate of the Adviser, and may have the same officers and/or board of trustees, they may be deemed to be under common control and, therefore, affiliated persons of each other. Accordingly, section 17(a) could prevent an Underlying Fund from selling shares to, and redeeming shares from, an Investing Fund. 2. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction, including the consideration to be paid or received, are fair and reasonable and do not involve overreaching on the part of any person concerned, (b) the proposed transaction is consistent with the policies of each registered investment company involved, and (c) the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the Commission to exempt any person or transaction, or any class or classes of persons or transactions from any provision of the Act 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. 3. Applicants seek an exemption under sections 6(c) and 17(b) to allow the proposed transactions. Applicants state that the transactions satisfy the standards for relief under sections 6(c) and 17(b). Specifically, applicants state that the terms of the transactions are fair and reasonable and do not involve VerDate Mar<15>2010 16:38 Jan 10, 2013 Jkt 229001 overreaching. Applicants note that sales and redemptions of shares of the Underlying Funds will be at the net asset values of such Underlying Funds. In addition, applicants represent that the proposed transactions will be consistent with the policies of each Fund involved and the general purposes of the Act. Applicants’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Any sales charges and/or service fees charged with respect to shares of an Investing Fund will not exceed the limits applicable to a fund of funds as set forth in NASD Conduct Rule 2830. 2. Before approving any advisory contract under section 15 of the Act, the board of directors or trustees of an Investing Fund, including a majority of the trustees who are not interested persons, as defined in section 2(a)(19) of the Act, of the Investing Fund, will find that advisory fees, if any, charged under the contract are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to any Underlying Fund’s advisory contract. Such finding, and the basis upon which it was made, will be recorded fully in the minute books of the Investing Fund. 3. Each Investing Fund and each Underlying Fund will be part of the same ‘‘group of investment companies,’’ as defined in section 12(d)(1)(G)(ii) of the Act. 4. No Underlying Fund will acquire securities of any investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent that such Underlying Fund: (a) Receives securities of another investment company as a dividend or as a result of a plan of reorganization of a company (other than a plan devised for the purpose of evading section 12(d)(1) of the Act); (b) acquires (or is deemed to have acquired) securities of another investment company pursuant to exemptive relief from the Commission permitting such Underlying Fund to: (i) Acquire securities of one or more investment companies for short-term cash management purposes, or (ii) engage in interfund borrowing and lending transactions; or (c) invests in a Cayman Subsidiary that is a wholly-owned and controlled subsidiary of the Underlying Fund as described in the application. Further, no Cayman Subsidiary will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 the Act other than money market funds that comply with rule 2a–7 for shortterm cash management. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–00434 Filed 1–10–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 30341; File No. 812–13984] Fidelity Commonwealth Trust, et al.; Notice of Application January 7, 2013. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for 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, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (a)(2) of the Act, and under section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act. AGENCY: Summary of Application: Applicants request an order that would permit (a) Certain open-end management investment companies or series thereof to issue shares (‘‘Shares’’) redeemable in large aggregations only (‘‘Creation Units’’); (b) secondary market transactions in Shares to occur at negotiated market prices; (c) certain series to pay redemption proceeds, under certain circumstances, more than seven days after the tender of Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units; (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire Shares; and (f) certain series to perform creations and redemptions of Shares in-kind in a master-feeder structure. Applicants: Fidelity Commonwealth Trust (the ‘‘Trust’’), Fidelity Management & Research Company (the ‘‘Adviser’’), and Fidelity Distributors Corporation (the ‘‘Distributor’’). DATES: Filing Dates: The application was filed on December 1, 2011, and SUMMARY: E:\FR\FM\11JAN1.SGM 11JAN1

Agencies

[Federal Register Volume 78, Number 8 (Friday, January 11, 2013)]
[Notices]
[Pages 2453-2456]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00434]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-30342; 812-14015]


Credit Suisse Opportunity Funds, et al.; Notice of Application

January 7, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 12(d)(1)(J) 
of the Investment Company Act of 1940 (``Act'') for an exemption from 
sections 12(d)(1)(A) and (B) of the Act, and under sections 6(c) and 
17(b) of the Act for an exemption from section 17(a) of the Act.

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SUMMARY: Summary of Application: The order would permit certain 
registered closed-end management investment

[[Page 2454]]

companies to acquire shares of registered open-end management 
investment companies that are within the same group of investment 
companies.
    Applicants: Credit Suisse Opportunity Funds (``Opportunity 
Funds''), Credit Suisse Commodity Strategy Funds (``Commodity Strategy 
Funds''), Credit Suisse High Yield Bond Fund (``High Yield Bond 
Fund''), Credit Suisse Asset Management Income Fund, Inc. (``Income 
Fund''); Credit Suisse Asset Management, LLC (``Adviser''), and Credit 
Suisse Securities (USA) LLC (``CSSU'').\1\
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    \1\ Each Fund (as defined below) that currently intends to rely 
on the requested order is named as an applicant. Any Fund that 
relies on the order in the future will do so only in accordance with 
the terms and conditions contained in the application, as amended.

DATES:  Filing Dates: The application was filed on March 15, 2012, and 
amended on August 23, 2012, December 14, 2012, January 3, 2013, and 
January 4, 2013.
    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 February 1, 2013 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: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington DC 20549-1090; Applicants, c/o Joanne Doldo, 
Esq., Credit Suisse Asset Management, LLC, One Madison Avenue, New 
York, NY 10010.

FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, 
at (202) 551-6812 or David P. Bartels, 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 for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicants' Representations

    1. Opportunity Funds and Commodity Strategy Funds are organized as 
Delaware statutory trusts. Each is an open-end management investment 
company registered under the Act and is comprised of separate series 
that pursue distinct investment objectives and strategies.
    2. The High Yield Bond Fund is organized as a Delaware statutory 
trust. The Income Fund (together with the High Yield Bond Fund, the 
``Applicant Investing Funds'') is organized as a Maryland corporation. 
Each Applicant Investing Fund is registered under the Act as a closed-
end management investment company. The Applicant Investing Funds invest 
or will invest in a variety of debt and/or equity securities or other 
financial instruments in accordance with their respective investment 
objectives and policies.
    3. The Adviser, a Delaware limited liability company, is registered 
as an investment adviser under the Investment Advisers Act of 1940, and 
serves as the investment adviser to each of the existing Funds (as 
defined below). The Adviser is a wholly owned subsidiary of CSAM 
Americas Holding Corp., a holding company that is ultimately wholly 
owned by Credit Suisse Group. CSSU, a Delaware limited liability 
company, is a broker-dealer registered under the Securities Exchange 
Act of 1934. CSSU serves as principal underwriter and distributor for 
the shares of the Underlying Funds. CSSU is a wholly owned subsidiary 
of Credit Suisse (USA), Inc., a holding company that is ultimately 
wholly owned by Credit Suisse Group.
    4. Applicants state that each of the Investing Funds (as defined 
below) would like the flexibility to invest, subject to and consistent 
with its investment objectives, policies, and restrictions, in the 
Underlying Funds in excess of the limits set out in sections 
12(d)(1)(A) and (B) of the Act. Accordingly, Applicants seek an order 
of the Commission pursuant to Section 12(d)(1)(J) of the Act, granting 
an exemption from Sections 12(d)(1)(A) and (B) of the Act, and under 
Sections 6(c) and 17(b) of the Act, granting an exemption from Section 
17(a) of the Act, to the extent necessary to permit (a) each of the 
Applicant Investing Funds to purchase shares of Opportunity Funds or 
Commodity Strategies Funds or their series (the ``Underlying Funds'') 
and (b) the Underlying Funds to sell their shares to, and redeem their 
shares from, the Applicant Investing Funds.
    5. Applicants request that the relief also apply to any future 
registered closed-end management investment company advised by the 
Adviser or any entity controlling, controlled by, or under common 
control with the Adviser (together with the Applicant Investing Funds, 
the ``Investing Funds'') that wishes to invest in a 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, and (b) is part of the same ``group of 
investment companies,'' as defined in section 12(d)(1)(G)(ii) as the 
Investing Funds (included in the term ``Underlying Funds''). The 
Investing Funds and the Underlying Funds are referred to herein as the 
``Funds.''
    6. The Adviser believes that it may, from time to time, be more 
efficient for the Investing Funds to gain exposure to particular 
investment styles and/or asset classes by investing in one or more 
Underlying Funds. In particular, applicants note that if the total 
amount of an Investing Fund's desired exposure to a particular 
investment style or asset class is small, an investment in an 
Underlying Fund may enable an Investing Fund to obtain such exposure on 
a significantly more diversified basis than would be possible through a 
direct investment in such securities.
    7. An Underlying Fund may invest up to 25% of its assets in a 
wholly-owned and controlled subsidiary of the Underlying Fund, 
organized under the laws of the Cayman Islands or another non-U.S. 
jurisdiction (a ``Cayman Subsidiary'') in order to invest in commodity-
related instruments and certain other instruments. The Adviser will 
serve as the investment adviser to both such Underlying Fund and Cayman 
Subsidiary. The Cayman Subsidiary is created for the purpose of 
assuring that the Underlying Fund continues to qualify as a regulated 
investment company for U.S. federal income tax purposes.

Applicants' Legal Analysis

A. Section 12(d)(1) of the Act

    1. Section 12(d)(1)(A) provides that no registered investment 
company may acquire securities of another investment company if such 
securities represent more than 3% of the acquired company's outstanding 
voting stock, more than 5% of the acquiring company's total assets, or 
if such securities, together with the securities of other investment 
companies, represent more than 10% of the acquiring company's total 
assets. Section

[[Page 2455]]

12(d)(1)(B) provides that no registered open-end investment company, 
its principal underwriter or any broker or dealer may sell the 
company's securities to another investment company if the sale will 
cause the acquiring company to own more than 3% of the acquired 
company's voting stock or cause more than 10% of the acquired company's 
voting stock to be owned by investment companies.
    2. Section 12(d)(1)(G) of the Act provides, in relevant part, that 
section 12(d)(1) will not apply to the securities of a registered open-
end investment company purchased by another registered open-end 
investment company, if: (a) The acquiring company and the acquired 
company are part of the same group of investment companies; (b) the 
acquiring company holds only securities of acquired companies that are 
part of the same group of investment companies, government securities 
and short-term paper; (c) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not 
excessive under rules adopted pursuant to section 22(b) or section 
22(c) of the Act by a securities association registered under section 
15A of the Exchange Act or by the Commission; and (d) the acquired 
company has a policy that prohibits it from acquiring securities of 
registered open-end management investment companies or registered unit 
investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act. 
Section 12(d)(1)(G)(ii) defines a ``group of investment companies'' as 
``any 2 or more registered investment companies that hold themselves 
out to investors as related for purposes of investment and investor 
services.'' Applicants state that they may not rely on section 
12(d)(1)(G) because the Investing Funds are closed-end management 
investment companies.
    3. Section 12(d)(1)(J) of the Act provides that the Commission may 
exempt any person, security, or transaction from any provision of 
section 12(d)(1), if the exemption is consistent with the public 
interest and the protection of investors. Applicants seek an exemption 
under section 12(d)(1)(J) to permit the Investing Funds to acquire 
shares of Underlying Funds, and Underlying Funds to sell their shares 
to the Investing Funds, beyond the limits in sections 12(d)(1)(A) and 
(B).
    4. Applicants state that the proposed arrangement will not raise 
the policy concerns underlying sections 12(d)(1)(A) and (B), including 
undue influence by a fund of funds over underlying funds, excessive 
layering of fees, and overly complex fund structures. Accordingly, 
applicants believe that the requested exemption is consistent with the 
public interest and the protection of investors.
    5. Applicants contend that the proposed arrangement will not result 
in undue influence by an Investing Fund over an Underlying Fund because 
the Investing Fund and the Underlying Fund will be advised by the 
Adviser or an entity controlling, controlled by, or under common 
control with the Adviser, and will be part of the same group of 
investment companies. Applicants state that the Commission, and 
Congress in the enactment of section 12(d)(1)(G), have recognized that 
fund of funds arrangements that involve funds in the same group of 
investment companies may not present the same concerns regarding 
control of one fund by another.\2\
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    \2\ Applicants assert that the omission of closed-end funds from 
section 12(d)(1)(G) does not represent a determination by Congress 
that similar relief should not be provided to closed-end funds.
---------------------------------------------------------------------------

    6. Applicants do not believe that the proposed arrangement will 
involve excessive layering of fees. With respect to investment advisory 
fees, applicants state that, before approving any investment advisory 
contract under section 15 of the Act, the board of trustees or 
directors of each Investing Fund, including a majority of the trustees 
who are not ``interested persons'' (as defined in section 2(a)(19) of 
the Act) of the Investing Fund, will find that advisory fees, if any, 
charged under the advisory contract are based on services provided that 
are in addition to, rather than duplicative of, services provided 
pursuant to any Underlying Fund's advisory contract.
    7. In addition, applicants state that any sales charges and/or 
service fees charged with respect to shares of an Investing Fund will 
not exceed the limits applicable to a fund of funds set forth in NASD 
Conduct Rule 2830.\3\ Applicants state that, although investors may 
incur brokerage commissions in connection with market purchases of the 
Investing Funds' shares, these commissions will not differ from 
commissions otherwise incurred in connection with the purchase or sale 
of comparable securities.
---------------------------------------------------------------------------

    \3\ Any references to NASD Conduct Rule 2830 include any 
successor or replacement FINRA Rule to NASD Conduct Rule 2830.
---------------------------------------------------------------------------

    8. Applicants contend that the proposed arrangement will not create 
an overly complex fund structure. Applicants state that no Underlying 
Fund will acquire securities of any investment company or company 
relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the 
limits of section 12(d)(1)(A), except to the extent that such 
Underlying Fund receives securities of another investment company as a 
dividend or as a result of a plan or reorganization of a company (other 
than a plan devised for the purpose of evading section 12(d)(1) of the 
Act), acquires, or is deemed to have acquired, the securities pursuant 
to exemptive relief from the Commission permitting such Underlying Fund 
to (a) acquire securities of one or more affiliated investment 
companies or companies relying on section 3(c)(1) or 3(c)(7) for short-
term cash management purposes, or (b) engage in interfund borrowing and 
lending transactions, or invests in a Cayman Subsidiary that is a 
wholly-owned and controlled subsidiary of the Underlying Fund. Further, 
no Cayman Subsidiary will acquire securities of any other investment 
company or company relying on section 3(c)(1) or 3(c)(7) of the Act 
other than money market funds that comply with rule 2a-7 for short-term 
cash management purposes.
    9. Applicants state that investments by an Underlying Fund in a 
Cayman Subsidiary also do not raise concerns about undue influence, 
layering of fees, and complex structures. Applicants represent that: 
(a) The Underlying Fund will be the sole and legal beneficial owner of 
its Cayman Subsidiary, which addresses concerns regarding pyramiding of 
voting control as a means of undue influence; (b) the Adviser will 
manage the investments of both the Underlying Fund and its Cayman 
Subsidiary, which addresses concerns over undue influence by the 
Adviser; and (c) there will be no inappropriate layering of fees and 
expenses as a result of an Underlying Fund investing in a Cayman 
Subsidiary. Applicants further represent that the financial statements 
of the Cayman Subsidiary will be consolidated with those of the 
Underlying Fund, if permitted by the applicable accounting standards. 
In addition, in assessing compliance with the asset coverage 
requirements under section 18(f) of the Act, an Underlying Fund will 
deem the assets, liabilities, and indebtedness of a Cayman Subsidiary 
in which the Underlying Fund invests as its own. Finally, the expenses 
of the Cayman Subsidiary will be included in the total annual fund 
operating expenses in the prospectus of the Underlying Fund.

B. Section 17(a) of the Act

    1. Section 17(a) of the Act generally prohibits purchases and sales 
of securities, on a principal basis, between

[[Page 2456]]

a registered investment company and any affiliated person of the 
company, and affiliated persons of such persons. Section 2(a)(3) of the 
Act defines an ``affiliated person'' of another person to include, 
among other things, any person directly or indirectly owning, 
controlling or holding with power to vote 5% or more of the other's 
outstanding voting securities; any person 5% or more of whose 
outstanding voting securities are directly or indirectly owned, 
controlled, or held with power to vote by the other person; any person 
directly or indirectly controlling, controlled by, or under common 
control with the other person; and any investment adviser to an 
investment company. Applicants state that an Underlying Fund might be 
deemed to be an affiliated person of an Investing Fund if the Investing 
Fund acquires 5% or more of the Underlying Fund's outstanding voting 
securities. Applicants also state that, because the Investing Funds and 
Underlying Funds will be advised by the Adviser, or a control affiliate 
of the Adviser, and may have the same officers and/or board of 
trustees, they may be deemed to be under common control and, therefore, 
affiliated persons of each other. Accordingly, section 17(a) could 
prevent an Underlying Fund from selling shares to, and redeeming shares 
from, an Investing Fund.
    2. Section 17(b) of the Act authorizes the Commission to grant an 
order permitting a transaction otherwise prohibited by section 17(a) if 
it finds that (a) the terms of the proposed transaction, including the 
consideration to be paid or received, are fair and reasonable and do 
not involve overreaching on the part of any person concerned, (b) the 
proposed transaction is consistent with the policies of each registered 
investment company involved, and (c) the proposed transaction is 
consistent with the general purposes of the Act. Section 6(c) of the 
Act permits the Commission to exempt any person or transaction, or any 
class or classes of persons or transactions from any provision of the 
Act 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.
    3. Applicants seek an exemption under sections 6(c) and 17(b) to 
allow the proposed transactions. Applicants state that the transactions 
satisfy the standards for relief under sections 6(c) and 17(b). 
Specifically, applicants state that the terms of the transactions are 
fair and reasonable and do not involve overreaching. Applicants note 
that sales and redemptions of shares of the Underlying Funds will be at 
the net asset values of such Underlying Funds. In addition, applicants 
represent that the proposed transactions will be consistent with the 
policies of each Fund involved and the general purposes of the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Any sales charges and/or service fees charged with respect to 
shares of an Investing Fund will not exceed the limits applicable to a 
fund of funds as set forth in NASD Conduct Rule 2830.
    2. Before approving any advisory contract under section 15 of the 
Act, the board of directors or trustees of an Investing Fund, including 
a majority of the trustees who are not interested persons, as defined 
in section 2(a)(19) of the Act, of the Investing Fund, will find that 
advisory fees, if any, charged under the contract are based on services 
provided that are in addition to, rather than duplicative of, services 
provided pursuant to any Underlying Fund's advisory contract. Such 
finding, and the basis upon which it was made, will be recorded fully 
in the minute books of the Investing Fund.
    3. Each Investing Fund and each Underlying Fund will be part of the 
same ``group of investment companies,'' as defined in section 
12(d)(1)(G)(ii) of the Act.
    4. No Underlying Fund will acquire securities of any investment 
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in 
excess of the limits contained in section 12(d)(1)(A) of the Act, 
except to the extent that such Underlying Fund: (a) Receives securities 
of another investment company as a dividend or as a result of a plan of 
reorganization of a company (other than a plan devised for the purpose 
of evading section 12(d)(1) of the Act); (b) acquires (or is deemed to 
have acquired) securities of another investment company pursuant to 
exemptive relief from the Commission permitting such Underlying Fund 
to: (i) Acquire securities of one or more investment companies for 
short-term cash management purposes, or (ii) engage in interfund 
borrowing and lending transactions; or (c) invests in a Cayman 
Subsidiary that is a wholly-owned and controlled subsidiary of the 
Underlying Fund as described in the application. Further, no Cayman 
Subsidiary will acquire securities of any other investment company or 
company relying on section 3(c)(1) or 3(c)(7) of the Act other than 
money market funds that comply with rule 2a-7 for short-term cash 
management.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00434 Filed 1-10-13; 8:45 am]
BILLING CODE 8011-01-P