Forward Funds, et al.; Notice of Application, 14594-14597 [2013-05167]
Download as PDF
14594
Federal Register / Vol. 78, No. 44 / Wednesday, March 6, 2013 / Notices
www.nrc.gov/reading-rm/doccollections/acmui/meeting-summaries/)
on or about May 28, 2013.
4. Persons who require special
services, such as those for the hearing
impaired, should notify Ms. Holiday of
their planned attendance.
This meeting will be held in
accordance with the Atomic Energy Act
of 1954, as amended (primarily Section
161a); the Federal Advisory Committee
Act (5 U.S.C. App); and the
Commission’s regulations in Title 10,
U.S. Code of Federal Regulations, Part 7.
Dated: February 28, 2013.
Andrew L. Bates,
Advisory Committee Management Officer.
Christine Y. Greenlees, Senior Counsel,
at (202) 551–6879, or David P. Bartels,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
SUPPLEMENTARY INFORMATION:
[Investment Company Act Release No.
30411; 812–14043]
Forward Funds, et al.; Notice of
Application
February 28, 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 (the
‘‘Act’’) for 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.
pmangrum on DSK3VPTVN1PROD with NOTICES
Elizabeth M. Murphy,
Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090;
Applicants, 101 California Street, 16th
Floor, San Francisco, CA 94111.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
[FR Doc. 2013–05168 Filed 3–5–13; 8:45 am]
AGENCY:
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.
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 is an open-end
management investment company
registered under the Act and organized
as a Delaware statutory trust. The Trust
is comprised of separate series (each a
‘‘Fund’’ and collectively, the ‘‘Funds’’).
Summary of the Application: The
The Adviser is registered as an
order would permit certain open-end
investment adviser under the
management investment companies
Investment Advisers Act of 1940
registered under the Act to acquire
(‘‘Advisers Act’’) and serves as
shares of certain open-end management investment adviser for each of the
investment companies registered under
Funds. The Distributor is registered as a
the Act that are outside of the same
broker dealer under the Securities
group of investment companies as the
Exchange Act of 1934 (the ‘‘Exchange
acquiring investment companies.
Act’’) and serves as the Funds’
Applicants: Forward Funds (the
distributor. Both the Adviser and the
‘‘Trust’’), Forward Management, LLC
Distributor are Delaware limited
(the ‘‘Adviser’’), and Forward Securities,
liability companies.
LLC (the ‘‘Distributor’’).
2. Applicants request an order to
Filing Dates: The application was
filed on June 11, 2012, and amended on permit (a) registered open-end
September 28, 2012, December 19, 2012, management investment companies (the
‘‘Investing Funds’’) that are not part of
and February 6, 2013.
Hearing or Notification of Hearing: An the same ‘‘group of investment
companies,’’ within the meaning of
order granting the application will be
section 12(d)(1)(G)(ii) of the Act, as the
issued unless the Commission orders a
hearing. Interested persons may request Trust, to acquire shares of the Funds in
excess of the limits in section
a hearing by writing to the
12(d)(1)(A) of the Act, and (b) the
Commission’s Secretary and serving
Funds, any principal underwriter for a
applicants with a copy of the request,
Fund, and any broker or dealer
personally or by mail. Hearing requests
registered under the Exchange Act
should be received by the Commission
(‘‘Broker’’) to sell shares of the Funds to
by 5:30 p.m. on March 25, 2013, and
the Investing Funds in excess of the
should be accompanied by proof of
VerDate Mar<15>2010
15:01 Mar 05, 2013
Jkt 229001
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
limits of section 12(d)(1)(B) of the Act.1
Applicants also request an order under
sections 6(c) and 17(b) of the Act to
exempt applicants from section 17(a) to
the extent necessary to permit a Fund to
sell its shares to and redeem its shares
from an Investing Fund.2
3. Each Investing Fund will be
advised by an ‘‘investment adviser,’’
within the meaning of section
2(a)(20)(A) of the Act, and such adviser
will be registered as an investment
adviser under the Advisers Act (each, an
‘‘Investing Fund Adviser’’). Some
Investing Funds may also be advised by
an investment adviser that meets the
definition of section 2(a)(20)(B) of the
Act (each, an ‘‘Investing Fund
Subadviser’’).
Applicants’ Legal Analysis
A. Section 12(d)(1)
1. Section 12(d)(1)(A) of the Act, in
relevant part, prohibits a registered
investment company from acquiring
shares of an investment company if the
securities represent more than 3% of the
total outstanding voting stock of the
acquired company, more than 5% of the
total assets of the acquiring company,
or, together with the securities of any
other investment companies, more than
10% of the total assets of the acquiring
company. Section 12(d)(1)(B) of the Act
prohibits a registered open-end
investment company, its principal
underwriter, and any Broker from
knowingly selling the investment
company’s shares to another investment
company if the sale will cause the
acquiring company to own more than
3% of the acquired company’s total
outstanding voting stock, or if the sale
will cause more than 10% of the
acquired company’s total outstanding
voting stock to be owned by investment
companies generally.
2. Section 12(d)(1)(J) of the Act
provides that the Commission may
1 All entities that currently intend to rely on the
requested order are named as applicants. Any other
entity that relies on the order in the future will
comply with the terms and conditions of the
application. Certain of the Funds created in the
future may be registered under the Act as open-end
management investment companies and may have
received exemptive relief to permit their shares to
be listed and traded on a national securities
exchange at negotiated prices (‘‘ETFs’’).
2 Applicants request that the relief apply to: (1)
Each registered open-end management investment
company or series thereof that currently or
subsequently is part of the same ‘‘group of
investment companies,’’ within the meaning of
section 12(d)(1)(G)(ii) of the Act, as the Trust and
is advised by the Adviser (included in the term
‘‘Funds’’); (2) each Investing Fund that enters into
a Participation Agreement (as defined below) with
a Fund to purchase shares of the Fund; and (3) any
principal underwriter to a Fund or Broker (as
defined below) selling shares of a Fund.
E:\FR\FM\06MRN1.SGM
06MRN1
Federal Register / Vol. 78, No. 44 / Wednesday, March 6, 2013 / Notices
pmangrum on DSK3VPTVN1PROD with NOTICES
exempt any person, security, or
transaction, or any class or classes of
persons, securities or transactions, 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) of the Act to permit
Investing Funds to acquire shares of the
Funds in excess of the limits in section
12(d)(1)(A), and a Fund, any principal
underwriter for a Fund and any Broker
to sell shares of a Fund to an Investing
Fund in excess of the limits in section
12(d)(1)(B) of the Act.
3. Applicants state that the proposed
arrangement will not give rise to the
policy concerns underlying sections
12(d)(1)(A) and (B), which include
concerns about 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.
4. Applicants believe that the
proposed arrangement will not result in
the exercise of undue influence by an
Investing Fund or an Investing Fund
Affiliate over the Funds.3 To limit the
control that an Investing Fund may have
over a Fund, applicants propose a
condition prohibiting the Investing
Fund’s Advisory Group from controlling
(individually or in the aggregate) a Fund
within the meaning of section 2(a)(9) of
the Act.4 The same prohibition would
apply to any Investing Fund’s
Subadvisory Group.5 Applicants
propose other conditions to limit the
potential for undue influence over the
Funds, including that no Investing Fund
3 An ‘‘Investing Fund Affiliate’’ is the Investing
Fund Adviser, any Investing Fund Subadviser,
promoter or principal underwriter of an Investing
Fund, as well as any person controlling, controlled
by, or under common control with any of those
entities. A ‘‘Fund Affiliate’’ is an investment
adviser, sponsor, promoter, or principal
underwriter of a Fund, as well as any person
controlling, controlled by, or under common
control with any of those entities.
4 An ‘‘Investing Fund’s Advisory Group’’ is the
Investing Fund Adviser, any person controlling,
controlled by or under common control with the
Investing Fund Adviser, and any investment
company or issuer that would be an investment
company but for section 3(c)(1) or 3(c)(7) of the Act
that is advised or sponsored by the Investing Fund
Adviser or any person controlling, controlled by or
under common control with the Investing Fund
Adviser.
5 An ‘‘Investing Fund’s Subadvisory Group’’ is an
Investing Fund Subadviser, any person controlling,
controlled by or under common control with the
Investing Fund Subadviser, and any investment
company or issuer that would be an investment
company but for section 3(c)(1) or 3(c)(7) of the Act
(or portion of such investment company or issuer)
advised or sponsored by the Investing Fund
Subadviser or any person controlling, controlled by
or under common control with the Investing Fund
Subadviser.
VerDate Mar<15>2010
15:01 Mar 05, 2013
Jkt 229001
or Investing Fund Affiliate (except to
the extent it is acting in its capacity as
an investment adviser to a Fund) will
cause a Fund to purchase a security in
an offering of securities during the
existence of any underwriting or selling
syndicate of which a principal
underwriter is an Underwriting Affiliate
(‘‘Affiliated Underwriting’’).6
5. To ensure that the Investing Funds
comply with the terms and conditions
of the requested relief, prior to an
Investing Fund’s investment in the
shares of a Fund in excess of the limit
in section 12(d)(1)(A) of the Act, the
Investing Fund and the Fund will
execute an agreement stating, without
limitation, that their Boards (as defined
below) and their investment advisers
understand the terms and conditions of
the order and agree to fulfill their
responsibilities under the order
(‘‘Participation Agreement’’).7
Applicants note that each of the Funds
(other than an ETF whose shares are
purchased by an Investing Fund in the
secondary market) will retain its right at
all times to reject any investment by an
Investing Fund.8
6. Applicants state that they do not
believe that the proposed arrangement
will involve excessive layering of fees.
The Board of each Investing Fund,
including a majority of the directors or
trustees who are not ‘‘interested
persons’’ (within the meaning of section
2(a)(19) of the Act) (‘‘Disinterested
Directors’’), will find that the advisory
fees charged under investment advisory
contract(s) are based on services
provided that will be in addition to,
rather than duplicative of, the services
provided under the advisory contract(s)
of any Fund in which the Investing
Fund may invest. In addition, the
Investing Fund Adviser will waive fees
otherwise payable to it by an Investing
Fund in an amount at least equal to any
compensation (including fees received
pursuant to any plan adopted by a Fund
under rule 12b–1 under the Act)
6 An ‘‘Underwriting Affiliate’’ is a principal
underwriter in any underwriting or selling
syndicate that is an officer, director, trustee,
advisory board member, Investing Fund Adviser,
Investing Fund Subadviser, or employee of the
Investing Fund, or a person of which any such
officer, director, trustee, advisory board member,
Investing Fund Adviser, Investing Fund Subadviser,
or employee is an affiliated person. An
Underwriting Affiliate does not include any person
whose relationship to the Fund is covered by
section 10(f) of the Act.
7 The board of directors or trustees, as applicable,
of a specified entity is referred to herein as a
‘‘Board.’’
8 A Fund, including an ETF, would retain its right
to reject any initial investment by an Investing
Fund in excess of the limit in section 12(d)(1)(A)(i)
of the Act by declining to execute the Participation
Agreement with the Investing Fund.
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
14595
received from a Fund by the Investing
Fund Adviser, or an affiliated person of
the Investing Fund Adviser, other than
any advisory fees paid to the Investing
Fund Adviser or its affiliated person by
the Fund, in connection with the
investment by the Investing Fund in the
Fund. 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 Rule 2830 of the Conduct
Rules of the NASD (‘‘NASD Conduct
Rule 2830’’).9
7. Applicants submit that the
proposed arrangement will not create an
overly complex fund structure.
Applicants note that no 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 in certain
circumstances identified in condition 12
below.
B. Section 17(a)
1. Section 17(a) of the Act generally
prohibits sales or purchases of securities
between a registered investment
company and any affiliated person of
the company. Section 2(a)(3) of the Act
defines an ‘‘affiliated person’’ of another
person to include (a) any person directly
or indirectly owning, controlling, or
holding with power to vote, 5% or more
of the outstanding voting securities of
the other person; (b) 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; and (c) any
person directly or indirectly controlling,
controlled by, or under common control
with the other person.
2. Applicants state that an Investing
Fund and a Fund might be deemed to
be affiliated persons of one another if
the Investing Fund acquires 5% or more
of a Fund’s outstanding voting
securities. Accordingly, section 17(a)
could prevent a Fund from selling
shares to and redeeming shares from an
Investing Fund.
3. 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 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)
9 Any references to NASD Conduct Rule 2830
include any successor or replacement FINRA rule
to NASD Conduct Rule 2830.
E:\FR\FM\06MRN1.SGM
06MRN1
14596
Federal Register / Vol. 78, No. 44 / Wednesday, March 6, 2013 / Notices
the proposed transaction is consistent
with the general purposes of the Act.
Section 6(c) of the Act permits the
Commission to exempt any 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.
4. Applicants submit that the
proposed transactions satisfy the
standards for relief under sections 17(b)
and 6(c) of the Act.10 Applicants state
that the terms of the transactions are
reasonable and fair and do not involve
overreaching. Applicants state that the
terms upon which a Fund will sell its
shares to or purchase its shares from an
Investing Fund will be based on the net
asset value of the Fund.11 Applicants
state that the proposed transactions will
be consistent with the policies of each
Investing Fund and each Fund and with
the general purposes of the Act.
pmangrum on DSK3VPTVN1PROD with NOTICES
Applicants’ Conditions
Applicants agree that the relief to
permit Investing Funds to invest in
Funds shall be subject to the following
conditions:
1. The members of an Investing
Fund’s Advisory Group will not control
(individually or in the aggregate) a Fund
within the meaning of section 2(a)(9) of
the Act. The members of an Investing
Fund’s Subadvisory Group will not
control (individually or in the aggregate)
a Fund within the meaning of section
2(a)(9) of the Act. If, as a result of a
decrease in the outstanding voting
securities of a Fund, the Investing
Fund’s Advisory Group or the Investing
Fund’s Subadvisory Group, each in the
aggregate, becomes a holder of more
than 25 percent of the outstanding
voting securities of a Fund, it will vote
10 Applicants acknowledge that receipt of any
compensation by (a) an affiliated person of an
Investing Fund, or an affiliated person of such
person, for the purchase by an Investing Fund of
shares of a Fund or (b) an affiliated person of a
Fund, or an affiliated person of such person, for the
sale by the Fund of its shares to an Investing Fund
may be prohibited by section 17(e)(1) of the Act.
The Participation Agreement also will include this
acknowledgement.
11 Applicants note that an Investing Fund
generally would purchase and sell shares of a Fund
that operates as an ETF through secondary market
transactions rather than through principal
transactions with the Fund. The requested relief is
intended to cover, however, transactions directly
between Funds and Investing Funds. Applicants are
not seeking relief from section 17(a) for, and the
requested relief will not apply to, transactions
where an ETF could be deemed an affiliated person,
or an affiliated person of an affiliated person of an
Investing Fund because an investment adviser to
the ETF is also an investment adviser to the
Investing Fund.
VerDate Mar<15>2010
15:01 Mar 05, 2013
Jkt 229001
its shares of the Fund in the same
proportion as the vote of all other
holders of the Fund’s shares. This
condition does not apply to the
Investing Fund’s Subadvisory Group
with respect to a Fund for which the
Investing Fund Subadviser or a person
controlling, controlled by, or under
common control with the Investing
Fund Subadviser acts as the investment
adviser within the meaning of section
2(a)(20)(A) of the Act.
2. No Investing Fund or Investing
Fund Affiliate will cause any existing or
potential investment by the Investing
Fund in shares of a Fund to influence
the terms of any services or transactions
between the Investing Fund or an
Investing Fund Affiliate and the Fund or
a Fund Affiliate.
3. The Board of an Investing Fund,
including a majority of the Disinterested
Directors, will adopt procedures
reasonably designed to ensure that the
Investing Fund Adviser and any
Investing Fund Subadviser(s) are
conducting the investment program of
the Investing Fund without taking into
account any consideration received by
the Investing Fund or an Investing Fund
Affiliate from a Fund or a Fund Affiliate
in connection with any services or
transactions.
4. Once an investment by an Investing
Fund in the securities of a Fund exceeds
the limit in section 12(d)(1)(A)(i) of the
Act, the Board of the Fund, including a
majority of the Disinterested Directors,
will determine that any consideration
paid by the Fund to the Investing Fund
or an Investing Fund Affiliate in
connection with any services or
transactions: (a) Is fair and reasonable in
relation to the nature and quality of the
services and benefits received by the
Fund; (b) is within the range of
consideration that the Fund would be
required to pay to another unaffiliated
entity in connection with the same
services or transactions; and (c) does not
involve overreaching on the part of any
person concerned. This condition does
not apply with respect to any services
or transactions between a Fund and its
investment adviser(s) or any person
controlling, controlled by, or under
common control with such investment
adviser(s).
5. No Investing Fund or Investing
Fund Affiliate (except to the extent it is
acting in its capacity as an investment
adviser to a Fund) will cause a Fund to
purchase a security in any Affiliated
Underwriting.
6. The Board of a Fund, including a
majority of the Disinterested Directors,
will adopt procedures reasonably
designed to monitor any purchases of
securities by the Fund in an Affiliated
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
Underwriting once an investment by an
Investing Fund in the securities of the
Fund exceeds the limit of section
12(d)(1)(A)(i) of the Act, including any
purchases made directly from an
Underwriting Affiliate. The Board of the
Fund will review these purchases
periodically, but no less frequently than
annually, to determine whether the
purchases were influenced by the
investment by the Investing Fund in
shares of the Fund. The Board will
consider, among other things, (i)
whether the purchases were consistent
with the investment objectives and
policies of the Fund; (ii) how the
performance of securities purchased in
an Affiliated Underwriting compares to
the performance of comparable
securities purchased during a
comparable period of time in
underwritings other than Affiliated
Underwritings or to a benchmark such
as a comparable market index; and (iii)
whether the amount of securities
purchased by the Fund in Affiliated
Underwritings and the amount
purchased directly from an
Underwriting Affiliate have changed
significantly from prior years. The
Board will take any appropriate actions
based on its review, including, if
appropriate, the institution of
procedures designed to ensure that
purchases of securities in Affiliated
Underwritings are in the best interest of
shareholders.
7. Each Fund will maintain and
preserve permanently in an easily
accessible place a written copy of the
procedures described in the preceding
condition, and any modifications to
such procedures, and will maintain and
preserve for a period of not less than six
years from the end of the fiscal year in
which any purchase in an Affiliated
Underwriting occurred, the first two
years in an easily accessible place, a
written record of each purchase of
securities in Affiliated Underwritings
once an investment by an Investing
Fund in the securities of a Fund exceeds
the limit in section 12(d)(1)(A)(i) of the
Act, setting forth from whom the
securities were acquired, the identity of
the underwriting syndicate’s members,
the terms of the purchase, and the
information or materials upon which
the Board’s determinations were made.
8. Before investing in shares of a Fund
in excess of the limits in section
12(d)(1)(A), each Investing Fund and
Fund will execute a Participation
Agreement stating, without limitation,
that their Boards and their investment
advisers understand the terms and
conditions of the order and agree to
fulfill their responsibilities under the
order. At the time of its investment in
E:\FR\FM\06MRN1.SGM
06MRN1
pmangrum on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 78, No. 44 / Wednesday, March 6, 2013 / Notices
shares of a Fund in excess of the limit
in section 12(d)(1)(A)(i), an Investing
Fund will notify the Fund of the
investment. At such time, the Investing
Fund will also transmit to the Fund a
list of the names of each Investing Fund
Affiliate and Underwriting Affiliate. The
Investing Fund will notify the Fund of
any changes to the list of the names as
soon as reasonably practicable after a
change occurs. The Fund and the
Investing Fund will maintain and
preserve a copy of the order, the
Participation Agreement, and the list
with any updated information for the
duration of the investment and for a
period of not less than six years
thereafter, the first two years in an
easily accessible place.
9. Prior to approving any advisory
contract under section 15 of the Act, the
Board of each Investing Fund, including
a majority of the Disinterested Directors,
will find that the advisory fees charged
under such advisory contracts are based
on services provided that will be in
addition to, rather than duplicative of,
the services provided under the
advisory contract(s) of any Fund in
which the Investing Fund may invest.
These findings and their basis will be
recorded fully in the minute books of
the appropriate Investing Fund.
10. An Investing Fund Adviser will
waive fees otherwise payable to it by the
Investing Fund in an amount at least
equal to any compensation (including
fees received pursuant to a plan adopted
by a Fund under Rule 12b–1 under the
Act) received from a Fund by the
Investing Fund Adviser, or an affiliated
person of the Investing Fund Adviser,
other than any advisory fees paid to the
Investing Fund Adviser or its affiliated
person by the Fund, in connection with
the investment by the Investing Fund in
the Fund. Any Investing Fund
Subadviser will waive fees otherwise
payable to the Investing Fund
Subadviser, directly or indirectly, by the
Investing Fund in an amount at least
equal to any compensation received
from a Fund by the Investing Fund
Subadviser, or an affiliated person of the
Investing Fund Subadviser, other than
any advisory fees paid to the Investing
Fund Subadviser or its affiliated person
by the Fund, in connection with the
investment by the Investing Fund in the
Fund made at the direction of the
Investing Fund Subadviser. In the event
that the Investing Fund Subadviser
waives fees, the benefit of the waiver
will be passed through to the Investing
Fund.
11. Any sales charges and/or service
fees charged with respect to shares of an
Investing Fund will not exceed the
VerDate Mar<15>2010
15:01 Mar 05, 2013
Jkt 229001
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
12. No 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 permitted by exemptive
relief from the Commission permitting
the Fund to purchase shares of other
investment companies for short-term
cash management purposes.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Kevin O’Neill,
Deputy Secretary.
[FR Doc. 2013–05167 Filed 3–5–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69005; File No. SR–Phlx–
2013–16]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Establish
Transaction Fees for Options on
Treasury Securities
February 28, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
19, 2013, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘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 the Substance
of the Proposed Rule Change
The Exchange proposes to amend its
Fee Schedule to create fees for options
on Treasury securities.3
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Subsection (a)(1) of proposed Rule 1001D states
that the term ‘‘Treasury securities’’ (also known as
Treasury debt securities) means a bond or note or
other evidence of indebtedness that is a direct
obligation of, or an obligation guaranteed as to
principal or interest by, the United States or a
corporation in which the United States has a direct
or indirect interest (except debt securities
guaranteed as to timely payment of principal and
interest by the Government National Mortgage
Association). Securities issued or guaranteed by
individual departments or agencies of the United
States are sometimes referred to by the title of the
2 17
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
14597
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on March 1, 2013. The Exchange will
begin trading Options on Treasury
Securities on February 19, 2013. From
February 19, 2013 through February 28,
2013, the fees and rebates proposed
herein will not be applicable. Exchange
members and member organizations
will be assessed $0.00 Options
Transaction Charges and will receive
$0.00 Options Transactions Rebates.
The text of the proposed rule change
is provided in Exhibit 5. The text of the
proposed rule change is also available
on the Exchange’s Web site at https://
nasdaqomxphlx.cchwallstreet.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
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 purpose of the proposed rule
change is to create new fees titled
‘‘Options on Treasury Securities’’ to
support options overlying certain
treasury securities (‘‘Options on
Treasury Securities’’),4 as well as to
offer to discounted pricing to Customers
and Specialists and Market Makers and
rebates to Specialists and Market
Makers to encourage these market
participants to trade Options on
Treasury Securities.
The Options on Treasury Securities
will trade on the Exchange as a Singly
department or agency involved (e.g., a ‘‘Treasury
security’’ is a debt instrument that is issued by the
United States Treasury).
4 See Securities Exchange Release Act No. 67976
(October 4, 2012), 77 FR 61794 (October 11, 2012)
(SR–Phlx–2012–105) (approval order).
E:\FR\FM\06MRN1.SGM
06MRN1
Agencies
[Federal Register Volume 78, Number 44 (Wednesday, March 6, 2013)]
[Notices]
[Pages 14594-14597]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05167]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 30411; 812-14043]
Forward Funds, et al.; Notice of Application
February 28, 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 (the ``Act'') for 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.
-----------------------------------------------------------------------
Summary of the Application: The order would permit certain open-end
management investment companies registered under the Act to acquire
shares of certain open-end management investment companies registered
under the Act that are outside of the same group of investment
companies as the acquiring investment companies.
Applicants: Forward Funds (the ``Trust''), Forward Management, LLC
(the ``Adviser''), and Forward Securities, LLC (the ``Distributor'').
Filing Dates: The application was filed on June 11, 2012, and
amended on September 28, 2012, December 19, 2012, and February 6, 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 March 25, 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants,
101 California Street, 16th Floor, San Francisco, CA 94111.
FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior
Counsel, at (202) 551-6879, 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 https://www.sec.gov/search/search.htm, or by calling (202) 551-8090.
Applicants' Representations
1. The Trust is an open-end management investment company
registered under the Act and organized as a Delaware statutory trust.
The Trust is comprised of separate series (each a ``Fund'' and
collectively, the ``Funds''). The Adviser is registered as an
investment adviser under the Investment Advisers Act of 1940
(``Advisers Act'') and serves as investment adviser for each of the
Funds. The Distributor is registered as a broker dealer under the
Securities Exchange Act of 1934 (the ``Exchange Act'') and serves as
the Funds' distributor. Both the Adviser and the Distributor are
Delaware limited liability companies.
2. Applicants request an order to permit (a) registered open-end
management investment companies (the ``Investing Funds'') that are not
part of the same ``group of investment companies,'' within the meaning
of section 12(d)(1)(G)(ii) of the Act, as the Trust, to acquire shares
of the Funds in excess of the limits in section 12(d)(1)(A) of the Act,
and (b) the Funds, any principal underwriter for a Fund, and any broker
or dealer registered under the Exchange Act (``Broker'') to sell shares
of the Funds to the Investing Funds in excess of the limits of section
12(d)(1)(B) of the Act.\1\ Applicants also request an order under
sections 6(c) and 17(b) of the Act to exempt applicants from section
17(a) to the extent necessary to permit a Fund to sell its shares to
and redeem its shares from an Investing Fund.\2\
---------------------------------------------------------------------------
\1\ All entities that currently intend to rely on the requested
order are named as applicants. Any other entity that relies on the
order in the future will comply with the terms and conditions of the
application. Certain of the Funds created in the future may be
registered under the Act as open-end management investment companies
and may have received exemptive relief to permit their shares to be
listed and traded on a national securities exchange at negotiated
prices (``ETFs'').
\2\ Applicants request that the relief apply to: (1) Each
registered open-end management investment company or series thereof
that currently or subsequently is part of the same ``group of
investment companies,'' within the meaning of section
12(d)(1)(G)(ii) of the Act, as the Trust and is advised by the
Adviser (included in the term ``Funds''); (2) each Investing Fund
that enters into a Participation Agreement (as defined below) with a
Fund to purchase shares of the Fund; and (3) any principal
underwriter to a Fund or Broker (as defined below) selling shares of
a Fund.
---------------------------------------------------------------------------
3. Each Investing Fund will be advised by an ``investment
adviser,'' within the meaning of section 2(a)(20)(A) of the Act, and
such adviser will be registered as an investment adviser under the
Advisers Act (each, an ``Investing Fund Adviser''). Some Investing
Funds may also be advised by an investment adviser that meets the
definition of section 2(a)(20)(B) of the Act (each, an ``Investing Fund
Subadviser'').
Applicants' Legal Analysis
A. Section 12(d)(1)
1. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a
registered investment company from acquiring shares of an investment
company if the securities represent more than 3% of the total
outstanding voting stock of the acquired company, more than 5% of the
total assets of the acquiring company, or, together with the securities
of any other investment companies, more than 10% of the total assets of
the acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter, and
any Broker from knowingly selling the investment company's shares to
another investment company if the sale will cause the acquiring company
to own more than 3% of the acquired company's total outstanding voting
stock, or if the sale will cause more than 10% of the acquired
company's total outstanding voting stock to be owned by investment
companies generally.
2. Section 12(d)(1)(J) of the Act provides that the Commission may
[[Page 14595]]
exempt any person, security, or transaction, or any class or classes of
persons, securities or transactions, 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) of the Act to permit Investing Funds to acquire shares of
the Funds in excess of the limits in section 12(d)(1)(A), and a Fund,
any principal underwriter for a Fund and any Broker to sell shares of a
Fund to an Investing Fund in excess of the limits in section
12(d)(1)(B) of the Act.
3. Applicants state that the proposed arrangement will not give
rise to the policy concerns underlying sections 12(d)(1)(A) and (B),
which include concerns about 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.
4. Applicants believe that the proposed arrangement will not result
in the exercise of undue influence by an Investing Fund or an Investing
Fund Affiliate over the Funds.\3\ To limit the control that an
Investing Fund may have over a Fund, applicants propose a condition
prohibiting the Investing Fund's Advisory Group from controlling
(individually or in the aggregate) a Fund within the meaning of section
2(a)(9) of the Act.\4\ The same prohibition would apply to any
Investing Fund's Subadvisory Group.\5\ Applicants propose other
conditions to limit the potential for undue influence over the Funds,
including that no Investing Fund or Investing Fund Affiliate (except to
the extent it is acting in its capacity as an investment adviser to a
Fund) will cause a Fund to purchase a security in an offering of
securities during the existence of any underwriting or selling
syndicate of which a principal underwriter is an Underwriting Affiliate
(``Affiliated Underwriting'').\6\
---------------------------------------------------------------------------
\3\ An ``Investing Fund Affiliate'' is the Investing Fund
Adviser, any Investing Fund Subadviser, promoter or principal
underwriter of an Investing Fund, as well as any person controlling,
controlled by, or under common control with any of those entities. A
``Fund Affiliate'' is an investment adviser, sponsor, promoter, or
principal underwriter of a Fund, as well as any person controlling,
controlled by, or under common control with any of those entities.
\4\ An ``Investing Fund's Advisory Group'' is the Investing Fund
Adviser, any person controlling, controlled by or under common
control with the Investing Fund Adviser, and any investment company
or issuer that would be an investment company but for section
3(c)(1) or 3(c)(7) of the Act that is advised or sponsored by the
Investing Fund Adviser or any person controlling, controlled by or
under common control with the Investing Fund Adviser.
\5\ An ``Investing Fund's Subadvisory Group'' is an Investing
Fund Subadviser, any person controlling, controlled by or under
common control with the Investing Fund Subadviser, and any
investment company or issuer that would be an investment company but
for section 3(c)(1) or 3(c)(7) of the Act (or portion of such
investment company or issuer) advised or sponsored by the Investing
Fund Subadviser or any person controlling, controlled by or under
common control with the Investing Fund Subadviser.
\6\ An ``Underwriting Affiliate'' is a principal underwriter in
any underwriting or selling syndicate that is an officer, director,
trustee, advisory board member, Investing Fund Adviser, Investing
Fund Subadviser, or employee of the Investing Fund, or a person of
which any such officer, director, trustee, advisory board member,
Investing Fund Adviser, Investing Fund Subadviser, or employee is an
affiliated person. An Underwriting Affiliate does not include any
person whose relationship to the Fund is covered by section 10(f) of
the Act.
---------------------------------------------------------------------------
5. To ensure that the Investing Funds comply with the terms and
conditions of the requested relief, prior to an Investing Fund's
investment in the shares of a Fund in excess of the limit in section
12(d)(1)(A) of the Act, the Investing Fund and the Fund will execute an
agreement stating, without limitation, that their Boards (as defined
below) and their investment advisers understand the terms and
conditions of the order and agree to fulfill their responsibilities
under the order (``Participation Agreement'').\7\ Applicants note that
each of the Funds (other than an ETF whose shares are purchased by an
Investing Fund in the secondary market) will retain its right at all
times to reject any investment by an Investing Fund.\8\
---------------------------------------------------------------------------
\7\ The board of directors or trustees, as applicable, of a
specified entity is referred to herein as a ``Board.''
\8\ A Fund, including an ETF, would retain its right to reject
any initial investment by an Investing Fund in excess of the limit
in section 12(d)(1)(A)(i) of the Act by declining to execute the
Participation Agreement with the Investing Fund.
---------------------------------------------------------------------------
6. Applicants state that they do not believe that the proposed
arrangement will involve excessive layering of fees. The Board of each
Investing Fund, including a majority of the directors or trustees who
are not ``interested persons'' (within the meaning of section 2(a)(19)
of the Act) (``Disinterested Directors''), will find that the advisory
fees charged under investment advisory contract(s) are based on
services provided that will be in addition to, rather than duplicative
of, the services provided under the advisory contract(s) of any Fund in
which the Investing Fund may invest. In addition, the Investing Fund
Adviser will waive fees otherwise payable to it by an Investing Fund in
an amount at least equal to any compensation (including fees received
pursuant to any plan adopted by a Fund under rule 12b-1 under the Act)
received from a Fund by the Investing Fund Adviser, or an affiliated
person of the Investing Fund Adviser, other than any advisory fees paid
to the Investing Fund Adviser or its affiliated person by the Fund, in
connection with the investment by the Investing Fund in the Fund. 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 Rule 2830 of the Conduct Rules of the NASD (``NASD
Conduct Rule 2830'').\9\
---------------------------------------------------------------------------
\9\ Any references to NASD Conduct Rule 2830 include any
successor or replacement FINRA rule to NASD Conduct Rule 2830.
---------------------------------------------------------------------------
7. Applicants submit that the proposed arrangement will not create
an overly complex fund structure. Applicants note that no 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 in certain circumstances
identified in condition 12 below.
B. Section 17(a)
1. Section 17(a) of the Act generally prohibits sales or purchases
of securities between a registered investment company and any
affiliated person of the company. Section 2(a)(3) of the Act defines an
``affiliated person'' of another person to include (a) any person
directly or indirectly owning, controlling, or holding with power to
vote, 5% or more of the outstanding voting securities of the other
person; (b) 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; and (c) any person directly or
indirectly controlling, controlled by, or under common control with the
other person.
2. Applicants state that an Investing Fund and a Fund might be
deemed to be affiliated persons of one another if the Investing Fund
acquires 5% or more of a Fund's outstanding voting securities.
Accordingly, section 17(a) could prevent a Fund from selling shares to
and redeeming shares from an Investing Fund.
3. 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 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)
[[Page 14596]]
the proposed transaction is consistent with the general purposes of the
Act. Section 6(c) of the Act permits the Commission to exempt any
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.
4. Applicants submit that the proposed transactions satisfy the
standards for relief under sections 17(b) and 6(c) of the Act.\10\
Applicants state that the terms of the transactions are reasonable and
fair and do not involve overreaching. Applicants state that the terms
upon which a Fund will sell its shares to or purchase its shares from
an Investing Fund will be based on the net asset value of the Fund.\11\
Applicants state that the proposed transactions will be consistent with
the policies of each Investing Fund and each Fund and with the general
purposes of the Act.
---------------------------------------------------------------------------
\10\ Applicants acknowledge that receipt of any compensation by
(a) an affiliated person of an Investing Fund, or an affiliated
person of such person, for the purchase by an Investing Fund of
shares of a Fund or (b) an affiliated person of a Fund, or an
affiliated person of such person, for the sale by the Fund of its
shares to an Investing Fund may be prohibited by section 17(e)(1) of
the Act. The Participation Agreement also will include this
acknowledgement.
\11\ Applicants note that an Investing Fund generally would
purchase and sell shares of a Fund that operates as an ETF through
secondary market transactions rather than through principal
transactions with the Fund. The requested relief is intended to
cover, however, transactions directly between Funds and Investing
Funds. Applicants are not seeking relief from section 17(a) for, and
the requested relief will not apply to, transactions where an ETF
could be deemed an affiliated person, or an affiliated person of an
affiliated person of an Investing Fund because an investment adviser
to the ETF is also an investment adviser to the Investing Fund.
---------------------------------------------------------------------------
Applicants' Conditions
Applicants agree that the relief to permit Investing Funds to
invest in Funds shall be subject to the following conditions:
1. The members of an Investing Fund's Advisory Group will not
control (individually or in the aggregate) a Fund within the meaning of
section 2(a)(9) of the Act. The members of an Investing Fund's
Subadvisory Group will not control (individually or in the aggregate) a
Fund within the meaning of section 2(a)(9) of the Act. If, as a result
of a decrease in the outstanding voting securities of a Fund, the
Investing Fund's Advisory Group or the Investing Fund's Subadvisory
Group, each in the aggregate, becomes a holder of more than 25 percent
of the outstanding voting securities of a Fund, it will vote its shares
of the Fund in the same proportion as the vote of all other holders of
the Fund's shares. This condition does not apply to the Investing
Fund's Subadvisory Group with respect to a Fund for which the Investing
Fund Subadviser or a person controlling, controlled by, or under common
control with the Investing Fund Subadviser acts as the investment
adviser within the meaning of section 2(a)(20)(A) of the Act.
2. No Investing Fund or Investing Fund Affiliate will cause any
existing or potential investment by the Investing Fund in shares of a
Fund to influence the terms of any services or transactions between the
Investing Fund or an Investing Fund Affiliate and the Fund or a Fund
Affiliate.
3. The Board of an Investing Fund, including a majority of the
Disinterested Directors, will adopt procedures reasonably designed to
ensure that the Investing Fund Adviser and any Investing Fund
Subadviser(s) are conducting the investment program of the Investing
Fund without taking into account any consideration received by the
Investing Fund or an Investing Fund Affiliate from a Fund or a Fund
Affiliate in connection with any services or transactions.
4. Once an investment by an Investing Fund in the securities of a
Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, the Board
of the Fund, including a majority of the Disinterested Directors, will
determine that any consideration paid by the Fund to the Investing Fund
or an Investing Fund Affiliate in connection with any services or
transactions: (a) Is fair and reasonable in relation to the nature and
quality of the services and benefits received by the Fund; (b) is
within the range of consideration that the Fund would be required to
pay to another unaffiliated entity in connection with the same services
or transactions; and (c) does not involve overreaching on the part of
any person concerned. This condition does not apply with respect to any
services or transactions between a Fund and its investment adviser(s)
or any person controlling, controlled by, or under common control with
such investment adviser(s).
5. No Investing Fund or Investing Fund Affiliate (except to the
extent it is acting in its capacity as an investment adviser to a Fund)
will cause a Fund to purchase a security in any Affiliated
Underwriting.
6. The Board of a Fund, including a majority of the Disinterested
Directors, will adopt procedures reasonably designed to monitor any
purchases of securities by the Fund in an Affiliated Underwriting once
an investment by an Investing Fund in the securities of the Fund
exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any
purchases made directly from an Underwriting Affiliate. The Board of
the Fund will review these purchases periodically, but no less
frequently than annually, to determine whether the purchases were
influenced by the investment by the Investing Fund in shares of the
Fund. The Board will consider, among other things, (i) whether the
purchases were consistent with the investment objectives and policies
of the Fund; (ii) how the performance of securities purchased in an
Affiliated Underwriting compares to the performance of comparable
securities purchased during a comparable period of time in
underwritings other than Affiliated Underwritings or to a benchmark
such as a comparable market index; and (iii) whether the amount of
securities purchased by the Fund in Affiliated Underwritings and the
amount purchased directly from an Underwriting Affiliate have changed
significantly from prior years. The Board will take any appropriate
actions based on its review, including, if appropriate, the institution
of procedures designed to ensure that purchases of securities in
Affiliated Underwritings are in the best interest of shareholders.
7. Each Fund will maintain and preserve permanently in an easily
accessible place a written copy of the procedures described in the
preceding condition, and any modifications to such procedures, and will
maintain and preserve for a period of not less than six years from the
end of the fiscal year in which any purchase in an Affiliated
Underwriting occurred, the first two years in an easily accessible
place, a written record of each purchase of securities in Affiliated
Underwritings once an investment by an Investing Fund in the securities
of a Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act,
setting forth from whom the securities were acquired, the identity of
the underwriting syndicate's members, the terms of the purchase, and
the information or materials upon which the Board's determinations were
made.
8. Before investing in shares of a Fund in excess of the limits in
section 12(d)(1)(A), each Investing Fund and Fund will execute a
Participation Agreement stating, without limitation, that their Boards
and their investment advisers understand the terms and conditions of
the order and agree to fulfill their responsibilities under the order.
At the time of its investment in
[[Page 14597]]
shares of a Fund in excess of the limit in section 12(d)(1)(A)(i), an
Investing Fund will notify the Fund of the investment. At such time,
the Investing Fund will also transmit to the Fund a list of the names
of each Investing Fund Affiliate and Underwriting Affiliate. The
Investing Fund will notify the Fund of any changes to the list of the
names as soon as reasonably practicable after a change occurs. The Fund
and the Investing Fund will maintain and preserve a copy of the order,
the Participation Agreement, and the list with any updated information
for the duration of the investment and for a period of not less than
six years thereafter, the first two years in an easily accessible
place.
9. Prior to approving any advisory contract under section 15 of the
Act, the Board of each Investing Fund, including a majority of the
Disinterested Directors, will find that the advisory fees charged under
such advisory contracts are based on services provided that will be in
addition to, rather than duplicative of, the services provided under
the advisory contract(s) of any Fund in which the Investing Fund may
invest. These findings and their basis will be recorded fully in the
minute books of the appropriate Investing Fund.
10. An Investing Fund Adviser will waive fees otherwise payable to
it by the Investing Fund in an amount at least equal to any
compensation (including fees received pursuant to a plan adopted by a
Fund under Rule 12b-1 under the Act) received from a Fund by the
Investing Fund Adviser, or an affiliated person of the Investing Fund
Adviser, other than any advisory fees paid to the Investing Fund
Adviser or its affiliated person by the Fund, in connection with the
investment by the Investing Fund in the Fund. Any Investing Fund
Subadviser will waive fees otherwise payable to the Investing Fund
Subadviser, directly or indirectly, by the Investing Fund in an amount
at least equal to any compensation received from a Fund by the
Investing Fund Subadviser, or an affiliated person of the Investing
Fund Subadviser, other than any advisory fees paid to the Investing
Fund Subadviser or its affiliated person by the Fund, in connection
with the investment by the Investing Fund in the Fund made at the
direction of the Investing Fund Subadviser. In the event that the
Investing Fund Subadviser waives fees, the benefit of the waiver will
be passed through to the Investing Fund.
11. 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.
12. No 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 permitted by exemptive relief from the Commission permitting the
Fund to purchase shares of other investment companies for short-term
cash management purposes.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2013-05167 Filed 3-5-13; 8:45 am]
BILLING CODE 8011-01-P