Goldman Sachs Trust, et al.; Notice of Application, 24447-24449 [2013-09769]
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Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
the Multi-manager Information
Statement available on the Web site
identified in the Multi-manager Notice
no later than when the Multi-manager
Notice (or Multi-manager Notice and
Multi-manager Information Statement)
is first sent to shareholders, and will
maintain it on that Web site for at least
90 days. In the circumstances described
in the application, a proxy solicitation
to approve the appointment of new
Subadvisers provides no more
meaningful information to shareholders
than the proposed Multi-manager
Information Statement. Moreover, the
applicable Board will comply with the
requirements of sections 15(a) and 15(c)
of the 1940 Act before entering into or
amending Subadvisory Agreements.
8. Applicants assert that the requested
disclosure relief would benefit
shareholders of the Funds because it
would improve the Adviser’s ability to
negotiate the fees paid to Subadvisers.
Applicants state that the Adviser may be
able to negotiate rates that are below a
Subadviser’s ‘‘posted’’ amounts if the
Adviser is not required to disclose the
Subadvisers’ fees to the public.
Applicants’ Conditions
Applicants agree that any order
granting the requested relief will be
subject to the following conditions: 5
1. Before a Fund may rely on the
order requested in the application, the
operation of the Fund in the manner
described in the application will be
approved by a majority of the Fund’s
outstanding voting securities, as defined
in the Act, or, in the case of a Fund
whose public shareholders purchase
shares on the basis of a prospectus
containing the disclosure contemplated
by condition 2 below, by the sole initial
shareholder before offering the Fund’s
shares to the public.
2. The prospectus for each Fund will
disclose the existence, substance, and
effect of any order granted pursuant to
the application. Each Fund will hold
itself out to the public as employing the
manager of managers structure
described in the application. The
prospectus will prominently disclose
that the Adviser has ultimate
responsibility (subject to oversight by
the Board) to oversee the Subadvisers
and recommend their hiring,
termination, and replacement.
3. Funds will inform shareholders of
the hiring of a new Subadviser within
as modified by the requested order to permit
Aggregate Fee Disclosure. Multi-manager
Information Statements will be filed electronically
with the Commission via the EDGAR system.
5 Applicants will only comply with conditions 7,
8, 9 and 12 if they rely on the relief that would
allow them to provide Aggregate Fee Disclosure.
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90 days after the hiring of a new
Subadviser pursuant to the Modified
Notice and Access Procedures.
4. The Adviser will not enter into a
Subadvisory Agreement with any
Affiliated Subadviser without that
agreement, including the compensation
to be paid thereunder, being approved
by the shareholders of the applicable
Fund.
5. At all times, at least a majority of
the Board will be Independent Trustees,
and the nomination and selection of
new or additional Independent Trustees
will be placed within the discretion of
the then-existing Independent Trustees.
6. When a Subadviser change is
proposed for a Fund with an Affiliated
Subadviser, the Board, including a
majority of the Independent Trustees,
will make a separate finding, reflected
in the applicable Board minutes, that
such change is in the best interests of
the Fund and its shareholders and does
not involve a conflict of interest from
which the Adviser or the Affiliated
Subadviser derives an inappropriate
advantage.
7. Independent legal counsel, as
defined in rule 0–1(a)(6) under the Act,
will be engaged to represent the
Independent Trustees. The selection of
such counsel will be within the
discretion of the then existing
Independent Trustees.
8. The Adviser will provide the
Board, no less frequently than quarterly,
with information about the profitability
of the Adviser on a per-Fund basis. The
information will reflect the impact on
profitability of the hiring or termination
of any Subadviser during the applicable
quarter.
9. Whenever a Subadviser is hired or
terminated, the Adviser will provide the
Board with information showing the
expected impact on the profitability of
the Adviser.
10. The Adviser will provide general
management services to each Fund,
including overall supervisory
responsibility for the general
management and investment of the
Fund’s assets and, subject to review and
approval of the Board, will (i) set each
Fund’s overall investment strategies; (ii)
evaluate, select and recommend
Subadvisers to manage all or part of a
Fund’s assets; (iii) when appropriate,
allocate and reallocate a Fund’s assets
among multiple Subadvisers; (iv)
monitor and evaluate the performance
of Subadvisers; and (v) implement
procedures reasonably designed to
ensure that the Subadvisers comply
with each Fund’s investment objective,
policies and restrictions.
11. No trustee or officer of the Trust,
or of a Fund, or director or officer of the
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24447
Adviser, will own directly or indirectly
(other than through a pooled investment
vehicle that is not controlled by such
person) any interest in a Subadviser,
except for (a) ownership of interests in
the Adviser or any entity that controls,
is controlled by, or is under common
control with the Adviser; or (b)
ownership of less than 1% of the
outstanding securities of any class of
equity or debt of a publicly traded
company that is either a Subadviser or
an entity that controls, is controlled by,
or is under common control with a
Subadviser.
12. Each Fund will disclose in its
registration statement the Aggregate Fee
Disclosure.
13. In the event the Commission
adopts a rule under the Act providing
substantially similar relief to that in the
order requested in the application, the
requested order will expire on the
effective date of that rule.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–09772 Filed 4–24–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
30471; 812–14075]
Goldman Sachs Trust, et al.; Notice of
Application
April 19, 2013.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application under
section 6(c) of the Investment Company
Act of 1940 (‘‘Act’’) for an exemption
from rule 12d1–2(a) under the Act.
AGENCY:
Applicants
request an order to permit open-end
management investment companies
relying on rule 12d1–2 under the Act to
invest in certain financial instruments.
APPLICANTS: Goldman Sachs Trust and
Goldman Sachs Variable Insurance
Trust (each a ‘‘Trust,’’ together, the
‘‘Trusts’’), Goldman Sachs Asset
Management, L.P (‘‘GSAM’’) and
Goldman Sachs Asset Management
International (‘‘GSAMI’’) (each, an
‘‘Initial Adviser’’ and collectively, the
‘‘Initial Advisers’’), and Goldman Sachs
& Co. (‘‘Goldman Sachs’’).
FILING DATE: The application was filed
on September 7, 2012, and amended
February 15, 2013.
SUMMARY OF APPLICATION:
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Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
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 May 14, 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, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090;
Applicants: c/o Caroline Kraus,
Goldman, Sachs & Co., 200 West Street,
New York, NY 10282.
FOR FURTHER INFORMATION CONTACT: Jaea
F. Hahn, Senior Counsel, at (202) 551–
6870, or Jennifer L. Sawin, Branch
Chief, at (202) 551–6821 (Division of
Investment Management, Office of
Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or 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 Trusts are organized as
Delaware statutory trusts and are
registered with the Commission as
open-end management investment
companies. Each of the Initial Advisers
is registered as an investment adviser
under the Investment Advisers Act of
1940 (‘‘Advisers Act’’). GSAM is a
Delaware limited partnership. GSAMI is
a company organized under the laws of
England and Wales. Goldman Sachs, an
investment adviser registered under the
Advisers Act and a broker-dealer
registered under the Securities and
Exchange Act of 1934, will serve as
distributor and transfer agent for the
Funds.
2. Applicants request the exemption
to the extent necessary to permit any
existing or future series of the Trusts
and any other registered open-end
management investment company or
series thereof that (a) is advised by an
Initial Adviser or any person
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controlling, controlled by or under
common control with an Initial Adviser
(any such adviser, including an Initial
Adviser, an ‘‘Adviser’’); (b) is in the
same group of investment companies as
defined in section 12(d)(1)(G) of the Act
as the Trusts; (c) invests in other
registered open-end management
investment companies (‘‘Underlying
Funds’’) in reliance on section
12(d)(1)(G) of the Act; and (d) is also
eligible to invest in securities (as
defined in section 2(a)(36) of the Act) in
reliance on rule 12d1–2 under the Act
(each a ‘‘Fund of Funds’’), to also invest,
to the extent consistent with its
investment objectives, policies,
strategies and limitations, in financial
instruments that may not be securities
within the meaning of section 2(a)(36) of
the Act (‘‘Other Investments’’).1
Applicants also request that the order
exempt any entity, including any entity
controlled by or under common control
with an Adviser, that now or in the
future acts as principal underwriter, or
broker or dealer if registered under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’), with respect to the
transactions described in the
application.
3. Consistent with its fiduciary
obligations under the Act, each Fund of
Funds’ board of trustees will review the
advisory fees charged by the Fund of
Funds’ Adviser to ensure that they are
based on services provided that are in
addition to, rather than duplicative of,
services provided pursuant to the
advisory agreement of any investment
company in which the Fund of Funds
may invest.
Applicants’ Legal Analysis
1. Section 12(d)(1)(A) of the Act
provides that no registered investment
company (‘‘acquiring company’’) may
acquire securities of another investment
company (‘‘acquired company’’) if such
securities represent more than 3% of the
acquired company’s outstanding voting
stock or 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
12(d)(1)(B) of the Act provides that no
registered open-end investment
company may sell its 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
1 Every existing entity that currently intends to
rely on the requested order is named as an
applicant. Any entity that relies on the order in the
future will do so only in accordance with the terms
and condition in the application.
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than 10% of the acquired company’s
voting stock to be owned by investment
companies and companies controlled by
them.
2. Section 12(d)(1)(G) of the Act
provides, in part, that section 12(d)(1)
will not apply to securities of an
acquired company purchased by an
acquiring company if: (i) the acquired
company and acquiring company are
part of the same group of investment
companies; (ii) 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; (iii) 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 (iv) the acquired
company has a policy that prohibits it
from acquiring securities of registered
open-end investment companies or
registered unit investment trusts in
reliance on section 12(d)(1)(F) or (G) of
the Act.
3. Rule 12d1–2 under the Act permits
a registered open-end investment
company or a registered unit investment
trust that relies on section 12(d)(1)(G) of
the Act to acquire, in addition to
securities issued by another registered
investment company in the same group
of investment companies, Government
securities, and short-term paper: (i)
Securities issued by an investment
company that is not in the same group
of investment companies, when the
acquisition is in reliance on section
12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii)
securities (other than securities issued
by an investment company); and (iii)
securities issued by a money market
fund, when the investment is in reliance
on rule 12d1–1 under the Act. For the
purposes of rule 12d1–2, ‘‘securities’’
means any security as defined in section
2(a)(36) of the Act.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction from any
provision of the Act, or from any rule
under 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 policies and
provisions of the Act. Applicants submit
that their request for relief meets this
standard.
5. Applicants request an order under
section 6(c) of the Act for an exemption
from rule 12d1–2(a) to allow the Funds
of Funds to invest in Other Investments
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Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices
while investing in Underlying Funds.
Applicants state that the Funds of
Funds will comply with rule 12d1–2
under the Act, but for the fact that the
Funds of Funds may invest a portion of
their assets in Other Investments.
Applicants assert that permitting the
Funds of Funds to invest in Other
Investments as described in the
application would not raise any of the
concerns that the requirements of
section 12(d)(1) were designed to
address.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
Applicants will comply with all
provisions of rule 12d1–2 under the Act,
except for paragraph (a)(2) to the extent
that it restricts any Fund of Funds from
investing in Other Investments as
described in the application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–09769 Filed 4–24–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69419; File No. SR–BOX–
2013–01]
Self-Regulatory Organizations; BOX
Options Exchange, LLC; Order
Approving a Proposed Rule Change,
as Modified by Amendment No. 1,
Relating to Complex Orders
tkelley on DSK3SPTVN1PROD with NOTICES
April 19, 2013.
I. Introduction
On February 20, 2013, BOX Options
Exchange LLC (the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’)1 and Rule 19b-4 thereunder,2 a
proposed rule change to amend the
rules governing the trading of Complex
Orders on BOX Market LLC (‘‘BOX’’),
the options trading facility of the
Exchange. On February 27, 2013, the
Exchange filed Amendment No. 1 to the
proposal. The proposed rule change, as
modified by Amendment No. 1, was
published for comment in the Federal
Register on March 8, 2013.3 The
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 69027
(March 4, 2013), 78 FR 15093 (March 8, 2013)
(‘‘Notice’’).
2 17
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17:22 Apr 24, 2013
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Commission received no comment
letters regarding the proposed rule
change, as amended. This order
approves the proposed rule change, as
amended.
II. Description
BOX proposes to amend its rules
governing the trading of Complex
Orders to: (i) Adopt definitions
applicable to Complex Orders; (ii)
specify additional order types for
Complex Orders; (iii) revise the priority
rules for Complex Orders; (iv) revise the
rules governing the execution of
Complex Orders and establish a filtering
process for Complex Orders to assure
that each leg of a Complex Order is
executed at a price that is equal to or
better than the National Best Bid or
Offer (‘‘NBBO’’) and the BOX best bid or
offer (‘‘BBO’’) for that series; (v) provide
for the generation of Legging Orders (as
defined below); (vi) describe the
treatment of Legging Orders in the Price
Improvement Period (‘‘PIP’’) auction;
(vii) provide for the generation of
Implied Orders (as defined below); (viii)
delete or update miscellaneous
provisions and rules; and (ix) provide
for the display of Legging Orders,
Complex Orders, and Implied Orders in
BOX’s proprietary High Speed Vendor
Feed (‘‘HSVF’’).
A. Definitions
BOX proposes to amend BOX Rule
7240(a) to define a Complex Order as
any order involving the simultaneous
purchase and/or sale of two or more
different options series in the same
underlying security, for the same
account, in a ratio that is equal to or
greater than one-to-three (.333) and less
than or equal to three-to-one (3.00) and
for the purpose of executing a particular
investment strategy.4 BOX notes that its
proposed definition of Complex Order is
consistent with the definition of
Complex Order in the rules of another
options exchange, and with the
definition of Complex Trade for
purposes of the trade-through exception
under Options Order Protection and
Locked/Crossed National Market System
Plan.5 BOX also proposes to delete
references to Stock-Option Orders and
Single Stock Future-Option Orders
(‘‘SFF-Option Order’’) in the definition
4 BOX Rule 7240(a) currently defines a Complex
Order as a Spread Order, Straddle Order, Strangle
Order, Combination Order, Stock-Option Order,
Single Stock Future-Option Order, Ratio Order,
Butterfly Spread Order, BOX Spread Order, and
Collar Order.
5 See ISE Rule 722(a)(1) (definition of Complex
Order); and ISE Rule 1900(d) and BOX Rule 1500(e)
(definition of Complex Trade).
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24449
of Complex Order because BOX does
not have these order types.6
In addition, BOX proposes to add the
following defined terms to BOX Rule
7240(a): Complex Order Strategy; cBBO;
cNBB; cNBBO; cNBO; and Complex
Order Book.7 Complex Order Strategy or
Strategy is proposed to be defined as a
particular combination of components
of a Complex Order and their ratios to
one another.8 cBBO is proposed to be
defined as the best net bid and offer
price for a Complex Order Strategy
based on the BBO on the BOX Book for
the individual options components of
the Strategy. cNBBO is proposed to be
defined as the best net bid and offer
price for a Complex Order Strategy
based on the NBBO for the individual
options components of the Strategy.9
cNBB and cNBO are proposed to be
defined, respectively, as the best net bid
price for a Complex Order Strategy and
the best net offer price for a Complex
Order Strategy, in each case based on
the NBBO for the individual options
components of the Strategy. Complex
Order Book is proposed to be defined as
the electronic book of Complex Orders
maintained by the BOX Trading Host.
Finally, ‘‘Central Order Book’’ or ‘‘BOX
Book’’ in BOX Rule 100(a)(10), would be
amended to clarify that these terms refer
to the electronic book of orders on each
single option series maintained by the
BOX Trading Host.
B. Order Types for Complex Orders
BOX proposes to amend BOX Rule
7240(b)(4) to allow Complex Orders to
be entered not only as Fill-and-Kill
orders, as currently permitted, but also
as Limit Orders, BOX-Top Orders,
Market Orders, or Session Orders, as
defined in BOX Rule 7110.10 BOX notes
that it currently permits each of these
order types for single option series.11
BOX proposes to delete a provision
allowing Complex Orders to be entered
6 See Notice, 78 FR at 15103. Similarly, BOX
proposes to delete IM–7240–1, which addresses
Stock-Option Orders and SFF-Option Orders. BOX
noted that it will file a proposed rule change
pursuant to Section 19(b)(1) of the Act if it plans
to provide for the trading of Stock-Option Orders
or SSF-Option Orders on BOX in the future. See id.
7 See BOX Rule 7240(a).
8 BOX will assign a strategy identifier to each
Strategy.
9 BOX also proposes to add references to the
‘‘NBB’’ and the ‘‘NBO’’ to the existing definition of
‘‘NBBO’’ in BOX Rule 100(a)(33). NBB and NBO are
proposed to be defined as the national best bid and
the national best offer, respectively. See BOX Rule
100(a)(33). BOX believes that these definitions are
necessary to support the definitions of cNBB and
cNBO in BOX Rule 7240(a). See Notice, 78 FR at
15103.
10 See BOX Rule 7420(b)(4)(i) and (ii).
11 See Notice, 78 FR at 15098.
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]]>Agencies
[Federal Register Volume 78, Number 80 (Thursday, April 25, 2013)]
[Notices]
[Pages 24447-24449]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09769]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 30471; 812-14075]
Goldman Sachs Trust, et al.; Notice of Application
April 19, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a)
under the Act.
-----------------------------------------------------------------------
Summary of Application: Applicants request an order to permit open-end
management investment companies relying on rule 12d1-2 under the Act to
invest in certain financial instruments.
Applicants: Goldman Sachs Trust and Goldman Sachs Variable Insurance
Trust (each a ``Trust,'' together, the ``Trusts''), Goldman Sachs Asset
Management, L.P (``GSAM'') and Goldman Sachs Asset Management
International (``GSAMI'') (each, an ``Initial Adviser'' and
collectively, the ``Initial Advisers''), and Goldman Sachs & Co.
(``Goldman Sachs'').
Filing Date: The application was filed on September 7, 2012, and
amended February 15, 2013.
[[Page 24448]]
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 May 14, 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, Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants: c/
o Caroline Kraus, Goldman, Sachs & Co., 200 West Street, New York, NY
10282.
FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at
(202) 551-6870, or Jennifer L. Sawin, Branch Chief, at (202) 551-6821
(Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or 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 Trusts are organized as Delaware statutory trusts and are
registered with the Commission as open-end management investment
companies. Each of the Initial Advisers is registered as an investment
adviser under the Investment Advisers Act of 1940 (``Advisers Act'').
GSAM is a Delaware limited partnership. GSAMI is a company organized
under the laws of England and Wales. Goldman Sachs, an investment
adviser registered under the Advisers Act and a broker-dealer
registered under the Securities and Exchange Act of 1934, will serve as
distributor and transfer agent for the Funds.
2. Applicants request the exemption to the extent necessary to
permit any existing or future series of the Trusts and any other
registered open-end management investment company or series thereof
that (a) is advised by an Initial Adviser or any person controlling,
controlled by or under common control with an Initial Adviser (any such
adviser, including an Initial Adviser, an ``Adviser''); (b) is in the
same group of investment companies as defined in section 12(d)(1)(G) of
the Act as the Trusts; (c) invests in other registered open-end
management investment companies (``Underlying Funds'') in reliance on
section 12(d)(1)(G) of the Act; and (d) is also eligible to invest in
securities (as defined in section 2(a)(36) of the Act) in reliance on
rule 12d1-2 under the Act (each a ``Fund of Funds''), to also invest,
to the extent consistent with its investment objectives, policies,
strategies and limitations, in financial instruments that may not be
securities within the meaning of section 2(a)(36) of the Act (``Other
Investments'').\1\ Applicants also request that the order exempt any
entity, including any entity controlled by or under common control with
an Adviser, that now or in the future acts as principal underwriter, or
broker or dealer if registered under the Securities Exchange Act of
1934 (``Exchange Act''), with respect to the transactions described in
the application.
---------------------------------------------------------------------------
\1\ Every existing entity that currently intends to rely on the
requested order is named as an applicant. Any entity that relies on
the order in the future will do so only in accordance with the terms
and condition in the application.
---------------------------------------------------------------------------
3. Consistent with its fiduciary obligations under the Act, each
Fund of Funds' board of trustees will review the advisory fees charged
by the Fund of Funds' Adviser to ensure that they are based on services
provided that are in addition to, rather than duplicative of, services
provided pursuant to the advisory agreement of any investment company
in which the Fund of Funds may invest.
Applicants' Legal Analysis
1. Section 12(d)(1)(A) of the Act provides that no registered
investment company (``acquiring company'') may acquire securities of
another investment company (``acquired company'') if such securities
represent more than 3% of the acquired company's outstanding voting
stock or 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 12(d)(1)(B) of the Act provides that no registered
open-end investment company may sell its 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 and companies controlled by them.
2. Section 12(d)(1)(G) of the Act provides, in part, that section
12(d)(1) will not apply to securities of an acquired company purchased
by an acquiring company if: (i) the acquired company and acquiring
company are part of the same group of investment companies; (ii) 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; (iii) 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 (iv) the acquired
company has a policy that prohibits it from acquiring securities of
registered open-end investment companies or registered unit investment
trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
3. Rule 12d1-2 under the Act permits a registered open-end
investment company or a registered unit investment trust that relies on
section 12(d)(1)(G) of the Act to acquire, in addition to securities
issued by another registered investment company in the same group of
investment companies, Government securities, and short-term paper: (i)
Securities issued by an investment company that is not in the same
group of investment companies, when the acquisition is in reliance on
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii) securities (other
than securities issued by an investment company); and (iii) securities
issued by a money market fund, when the investment is in reliance on
rule 12d1-1 under the Act. For the purposes of rule 12d1-2,
``securities'' means any security as defined in section 2(a)(36) of the
Act.
4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction from any provision of the Act, or
from any rule under 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 policies and
provisions of the Act. Applicants submit that their request for relief
meets this standard.
5. Applicants request an order under section 6(c) of the Act for an
exemption from rule 12d1-2(a) to allow the Funds of Funds to invest in
Other Investments
[[Page 24449]]
while investing in Underlying Funds. Applicants state that the Funds of
Funds will comply with rule 12d1-2 under the Act, but for the fact that
the Funds of Funds may invest a portion of their assets in Other
Investments. Applicants assert that permitting the Funds of Funds to
invest in Other Investments as described in the application would not
raise any of the concerns that the requirements of section 12(d)(1)
were designed to address.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition:
Applicants will comply with all provisions of rule 12d1-2 under the
Act, except for paragraph (a)(2) to the extent that it restricts any
Fund of Funds from investing in Other Investments as described in the
application.
For the Commission, by the Division of Investment Management,
under delegated authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-09769 Filed 4-24-13; 8:45 am]
BILLING CODE 8011-01-P
