Sunshine Act Meeting, 35075-35076 [2013-13860]

Download as PDF Federal Register / Vol. 78, No. 112 / Tuesday, June 11, 2013 / Notices when the Multi-manager Notice (or Multi-manager Notice and Multimanager Information Statement) is first sent to shareholders, and will maintain it on that Web site for at least 90 days. wreier-aviles on DSK5TPTVN1PROD with NOTICES Applicants’ Legal Analysis 1. Section 15(a) of the Act provides, in relevant part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract that has been approved by the vote of a majority of the company’s outstanding voting securities. Rule 18f– 2 under the Act provides that each series or class of securities in a series investment company affected by a matter must approve that matter if the Act requires shareholder approval. 2. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or from any rule thereunder, if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that the requested relief meets this standard for the reasons discussed below. 3. Applicants assert that the shareholders are relying on the Adviser’s experience to select one or more Subadvisers best suited to achieve a Fund’s investment objectives. Applicants assert that, from the perspective of the investor, the role of the Subadvisers is comparable to that of the individual portfolio managers employed by the Adviser. Applicants state that requiring shareholder approval of each Subadvisory Agreement would impose costs and unnecessary delays on the Funds, and may preclude the Adviser from acting promptly in a manner considered advisable by the Board. Applicants note that the Advisory Agreements and any subadvisory agreement with an Affiliated Subadviser will remain subject to sections 15(a) and (c) of the Act and rule 18f–2 under the Act. Applicants’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Before a Fund may rely on the requested order, the operation of the Fund in the manner described in the application will be approved by a majority of the Fund’s outstanding voting securities, as defined in the Act, or in the case of a Fund whose public shareholders purchase shares on the VerDate Mar<15>2010 15:13 Jun 10, 2013 Jkt 229001 basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder(s) before offering shares of that Fund to the public. 2. Each Fund relying on the requested order will disclose in its prospectus the existence, substance, and effect of any order granted pursuant to the application. Each Fund will hold itself out to the public as utilizing the Manager of Managers Structure. The prospectus will prominently disclose that the Adviser has ultimate responsibility (subject to oversight by the applicable Board) to oversee the Subadvisers and recommend their hiring, termination, and replacement. 3. Funds will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures. 4. The Adviser will not enter into a subadvisory agreement with any Affiliated Subadviser without such agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Fund. 5. At all times, at least a majority of the applicable Board will be Independent Trustees, and the nomination of new or additional Independent Trustees will be placed within the discretion of the thenexisting Independent Trustees. 6. Whenever a subadviser change is proposed for a Fund with an Affiliated Subadviser, the applicable Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that such change is in the best interests of the Fund and its shareholders, and does not involve a conflict of interest from which the Adviser or the Affiliated Subadviser derives an inappropriate advantage. 7. The Adviser will provide general management services to each Fund, including overall supervisory responsibility for the general management and investment of each Fund’s assets and, subject to review and approval of the applicable Board, will: (a) Set each Fund’s overall investment strategies; (b) evaluate, select and recommend Subadvisers to manage all or a part of each Fund’s assets; (c) allocate and, when appropriate, reallocate each Fund’s assets among one or more Subadvisers; (d) monitor and evaluate the performance of Subadvisers; and (e) implement procedures reasonably designed to ensure that the Subadvisers comply with each Fund’s investment objective, policies and restrictions. PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 35075 8. No trustee or officer of the Trust or a Fund, or director, manager, or officer of the Adviser, will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person), any interest in a Subadviser, except for (a) ownership of interests in the Adviser or any entity that controls, is controlled by, or is under common control with the Adviser or (b) ownership of less than 1% of the outstanding securities of any class of equity or debt of any publicly traded company that is either a Subadviser or an entity that controls, is controlled by, or is under common control with a Subadviser. 9. In the event the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the application, the requested order will expire on the effective date of that rule. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–13771 Filed 6–10–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Closed Meeting on Thursday, June 13, 2013 at 2:00 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Walter, as duty officer, voted to consider the items listed for the Closed Meeting in a closed session. The subject matter of the Closed Meeting will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; adjudicatory matters; and E:\FR\FM\11JNN1.SGM 11JNN1 35076 Federal Register / Vol. 78, No. 112 / Tuesday, June 11, 2013 / Notices other matters relating to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551–5400. Dated: June 6, 2013. Elizabeth M. Murphy, Secretary. [FR Doc. 2013–13860 Filed 6–6–13; 4:15 pm] (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Advance Notice BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69699; File No. SR–NSCC– 2013–805] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Advance Notice, as Modified by Amendment No. 1, To Require That All Locked-in Trade Data Submitted to It for Trade Recording Be Submitted in Real-time June 5, 2013. Pursuant to Section 806(e)(1) of the Payment, Clearing, and Settlement Supervision Act of 2010 (‘‘Clearing Supervision Act’’) 1 and Rule 19b– 4(n)(1)(i) 2 thereunder, notice is hereby given that on April 30, 2013, the National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) an advance notice described in Items I, II and III below, which Items have been prepared primarily by NSCC. On May 14, 2013, NSCC filed Amendment No. 1 to the advance notice.3 The Commission is publishing this notice to solicit comments on the advance notice from interested persons. wreier-aviles on DSK5TPTVN1PROD with NOTICES I. Clearing Agency’s Statement of the Terms of Substance of the Advance Notice NSCC is proposing to modify its Rules to require that all locked-in trade data submitted to NSCC for trade recording be submitted in real-time, as defined below, and to prohibit pre-netting and other practices that prevent real-time trade submission. 1 12 U.S.C. 5465(e)(1). CFR 240.19b–4(n)(i). 3 In Amendment No. 1, NSCC modified Exhibit 5 to the original advance notice filing to correct a typographical error in the text of its Rules & Procedures (‘‘Rules’’) related to the advance notice. 2 17 VerDate Mar<15>2010 15:13 Jun 10, 2013 Jkt 229001 II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Advance Notice In its filing with the Commission, NSCC included statements concerning the purpose of and basis for the advance notice and discussed any comments it received on the advance notice. The text of these statements may be examined at the places specified in Item IV below. NSCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.4 Proposal Overview NSCC is proposing to modify its Rules to require that all locked-in trade data submitted to NSCC for trade recording be submitted in real-time,5 and to prohibit pre-netting and other practices that prevent real time trade submission. According to NSCC, the majority of all transactions processed at NSCC are submitted on a locked-in basis by selfregulatory organizations (‘‘SROs’’) (including national and regional exchanges and marketplaces), and Qualified Special Representatives (‘‘QSRs’’).6 Currently NSCC data reveals that almost all exchanges 7 and some QSRs submit trades executed on their respective markets in real-time, representing approximately 91% of the locked-in trades submitted to NSCC today. The proposed rule change would require that all locked-in trades submitted for trade recording by SROs and QSRs be submitted to NSCC in realtime.8 4 The Commission has modified the text of the summaries prepared by NSCC. 5 The term ‘‘real-time,’’ when used with respect to trade submission, will be defined in Procedure XIII (Definitions) of NSCC’s Rules as the submission of such data on a trade-by-trade basis promptly after trade execution, in any format and by any communication method acceptable to NSCC. 6 QSRs are NSCC Members that either (i) operate an automated execution system where they are always the contra side of every trade, (ii) are the parent or affiliate of an entity operating such an automated system, where they are the contra side of every trade, or (iii) clear for a broker-dealer that operates such a system and the subscribers to the system acknowledge the clearing Member’s role in the clearance and settlement of these trades. 7 One executing market with very low trade volume does not yet submit trades in real-time. 8 NSCC is not at this time modifying Procedure III (Trade Recording Service (Interface Clearing Procedures)) of its Rules, so files submitted to NSCC by The Options Clearing Corporation (‘‘OCC’’) relating to option exercises and assignments (Procedure III, Section D—Settlement of Option Exercises and Assignments) will not be required to be submitted in real-time. OCC’s process of assigning option assignments is and will continue to be an end-of-day process. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 NSCC is also proposing to prohibit practices that preclude real-time submission, such as ‘‘pre-netting.’’ NSCC states that typically, pre-netting is done on a bilateral basis between a QSR and its customer, both NSCC Members. According to NSCC, any pre-netting practices—whether in the form of ‘‘summarization’’ (i.e., technique in which the clearing broker nets all trades in a single CUSIP by the same correspondent broker into fewer submitted trades), ‘‘compression’’ (i.e., technique to combine submissions of data for multiple trades to the point where the identity of the party actually responsible for the trades is masked), netting, or any other practice that combines two or more trades prior to their submission to NSCC (collectively, ‘‘pre-netting’’)—prevent the submission to NSCC of transactions on a trade-bytrade basis, and cause submitting firms to delay submission of their trades. According to NSCC, these practices disrupt NSCC’s ability to accurately monitor market and credit risks as they evolve during the trading day. Therefore, NSCC’s proposal will prohibit pre-netting activity on the part of entities submitting original trade data on a locked-in basis.9 The rules of NSCC’s affiliate Fixed Income Clearing Corporation (‘‘FICC’’) currently prohibit such activity, and this proposed rule change would align NSCC’s trade submission rules with those of FICC.10 NSCC does not expect the proposed rule changes to impact trade volumes significantly. According to NSCC, the majority of trades are currently being submitted to NSCC in real-time on a trade-by-trade basis, and NSCC is operationally capable of managing trade volumes that are multiple times larger than the historical peak volumes. NSCC’s trade capture application, 9 Trades executed in the normal course of business between a Member that clears for other broker-dealers, and its correspondent, or between correspondents of the Member, which correspondent(s) is not itself a Member and settles such obligations through such clearing Member (i.e., ‘‘internalized trades’’) are not required to be submitted to NSCC and shall not be considered to violate the ‘‘pre-netting’’ prohibition. 10 See, e.g., GSD Rule 11 (Netting System), Section 3 (‘‘All trade data required to be submitted to the Corporation under this Section must be submitted on a trade-by-trade basis with the original terms of the trades unaltered. A Member or any of its Affiliates may not engage in the PreNetting of Trades prior to their submission to the Corporation in contravention of this section. In addition, a Member or any of its Affiliates may not engage in any practice designed to contravene the prohibition against the Pre-Netting of Trades.’’), https://dtcc.com/legal/rules_proc/FICCGovernment_Security_Division_Rulebook.pdf. See also Order Granting Approval of a Proposed Rule Change Relating to Trade Submission Requirements and Pre-Netting, Release No. 34–51908 (June 22, 2005), 70 FR 37450 (June 29, 2005). E:\FR\FM\11JNN1.SGM 11JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 112 (Tuesday, June 11, 2013)]
[Notices]
[Pages 35075-35076]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13860]


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SECURITIES AND EXCHANGE COMMISSION


Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the 
Government in the Sunshine Act, Public Law 94-409, that the Securities 
and Exchange Commission will hold a Closed Meeting on Thursday, June 
13, 2013 at 2:00 p.m.
    Commissioners, Counsel to the Commissioners, the Secretary to the 
Commission, and recording secretaries will attend the Closed Meeting. 
Certain staff members who have an interest in the matters also may be 
present.
    The General Counsel of the Commission, or her designee, has 
certified that, in her opinion, one or more of the exemptions set forth 
in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 
200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the 
scheduled matters at the Closed Meeting.
    Commissioner Walter, as duty officer, voted to consider the items 
listed for the Closed Meeting in a closed session.
    The subject matter of the Closed Meeting will be:
    institution and settlement of injunctive actions;
    institution and settlement of administrative proceedings;
    adjudicatory matters; and

[[Page 35076]]

    other matters relating to enforcement proceedings.
    At times, changes in Commission priorities require alterations in 
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have 
been added, deleted or postponed, please contact the Office of the 
Secretary at (202) 551-5400.

    Dated: June 6, 2013.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-13860 Filed 6-6-13; 4:15 pm]
BILLING CODE 8011-01-P

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