AIM Growth Series (Invesco Growth Series), et al.; Notice of Application, 69885-69888 [2013-27907]

Download as PDF Federal Register / Vol. 78, No. 225 / Thursday, November 21, 2013 / Notices 69885 APPENDIX [18 TAA petitions instituted between 10/28/13 and 11/1/13] Subject firm (petitioners) Location Atmel Corporation (State/One-Stop) .................................... John Wiley and Sons, Inc. (Workers) .................................. Circor-Spence Engineering Co., Inc. (Union) ....................... JP Morgan Chase. Portfolio & Product Management/Solicitations (Workers). The Berry Company, LLC (Workers) ................................... Gamesa Technology Corporation (Union) ........................... Huber + Suhner, Inc. (State/One-Stop) ................................ Kloeckner Metals (Company) ............................................... Metlife (State/One-Stop) ....................................................... Page 1 Solutions (State/One-Stop) ...................................... Redflex Traffic Systems, Inc. (Workers) .............................. Honeywell International (Workers) ....................................... Ruskin Company (Union) ..................................................... SPX-Clydeunion Pumps (Workers) ...................................... John Wiley & Sons (Workers) .............................................. Capgemini (Workers) ............................................................ Rockwell Collins Dallas Service Center (Workers) .............. Victor Innovative Textiles, LLC (Company) .......................... Colorado Springs, CO ........... Indianapolis, IN ..................... Walden, NY ........................... Florence, SC ......................... 10/28/13 10/28/13 10/29/13 10/29/13 10/24/13 10/25/13 10/22/13 10/28/13 Erie, PA ................................. Trevose & Fairless Hills, PA Essex Junction, VT ............... Bensalem, PA ....................... Johnstown, PA ...................... Golden, CO ........................... Phoenix, AZ .......................... Melbourne, FL ....................... Fairmont, WV ........................ Battle Creek, MI .................... Hoboken, NJ ......................... Irving, TX ............................... Irving, TX ............................... Fall River, MA ....................... 10/30/13 10/30/13 10/30/13 10/30/13 10/30/13 10/30/13 10/30/13 10/31/13 10/31/13 10/31/13 10/31/13 10/31/13 11/01/13 11/01/13 10/10/13 10/29/13 10/29/13 10/29/13 10/29/13 10/28/13 10/29/13 10/30/13 10/30/13 10/22/13 10/30/13 10/30/13 10/31/13 10/30/13 TA–W 83174 83175 83176 83177 ................ ................ ................ ................ 83178 83179 83180 83181 83182 83183 83184 83185 83186 83187 83188 83189 83190 83191 ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ [FR Doc. 2013–27937 Filed 11–20–13; 8:45 am] BILLING CODE 4510–FN–P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice: 13–133] NASA Advisory Council; Aeronautics Committee; Meeting National Aeronautics and Space Administration. ACTION: Notice of meeting. AGENCY: In accordance with the Federal Advisory Committee Act, Public Law 92–463, as amended, the National Aeronautics and Space Administration announces a meeting of the Aeronautics Committee of the NASA Advisory Council. This Committee reports to the NAC. The meeting will be held for the purpose of soliciting, from the aeronautics community and other persons, research and technical information relevant to program planning. SUMMARY: Tuesday, December 3, 2013, 9:00 a.m. to 3:45 p.m.; Local Time. ADDRESSES: National Institute of Aerospace Headquarters, Room 101, 100 Exploration Way, Hampton, VA 23666. FOR FURTHER INFORMATION CONTACT: Ms. Susan L. Minor, Executive Secretary for the Aeronautics Committee, NASA Headquarters, Washington, DC 20546, (202) 358–0566, or susan.l.minor@ nasa.gov. tkelley on DSK3SPTVN1PROD with NOTICES DATES: The meeting will be open to the public up to the capacity of the room. Any person SUPPLEMENTARY INFORMATION: VerDate Mar<15>2010 17:17 Nov 20, 2013 Jkt 232001 interested in participating in the meeting by WebEx and telephone should contact Ms. Susan L. Minor at (202) 358–0566 for the web link, tollfree number and passcode. The agenda for the meeting includes the following topics: • Langley Research Center Overview • National Research Council Autonomy Study Update • Rotary Wing Project Discussion • Advanced Composites Project Planning Update It is imperative that these meetings be held on this date to accommodate the scheduling priorities of the key participants. Patricia D. Rausch, Advisory Committee Management Officer, National Aeronautics and Space Administration. [FR Doc. 2013–27855 Filed 11–20–13; 8:45 am] BILLING CODE 7510–13–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 30785; File No. 812–14204] AIM Growth Series (Invesco Growth Series), et al.; Notice of Application November 15, 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 section 15(a) of the Act and rule 18f–2 under the Act, as well as from certain disclosure requirements. AGENCY: PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 Date of institution Date of petition Summary of Application: Applicants request an order that would permit them to enter into and materially amend subadvisory agreements with Wholly-Owned Sub-Advisors (as defined below) and non-affiliated subadvisers without shareholder approval and would grant relief from certain disclosure requirements. APPLICANTS: AIM Growth Series (Invesco Growth Series) and AIM Investment Funds (Invesco Investment Funds) (each, a ‘‘Trust’’), and Invesco Advisers, Inc. (the ‘‘Advisor’’). DATES: Filing Dates: The application was filed on August 27, 2013, and amended on November 1, 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 December 9, 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: Invesco Advisers, Inc., 11 SUMMARY: E:\FR\FM\21NON1.SGM 21NON1 69886 Federal Register / Vol. 78, No. 225 / Thursday, November 21, 2013 / Notices Greenway Plaza, Suite 2500, Houston, TX 77046. FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at (202) 551–6873, or Mary Kay Frech, Assistant Director (Acting), at (202) 551–6821 (Division of Investment Management, Exemptive Applications Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number or an applicant using the Company name box, at http:// www.sec.gov/search/search.htm or by calling (202) 551–8090. tkelley on DSK3SPTVN1PROD with NOTICES Applicants’ Representations 1. Each Trust is organized as a Delaware statutory trust and is registered under the Act as an open-end management investment company. Each Trust currently intends to introduce at least one series of shares (each, a ‘‘Series’’) with its own distinct investment objective, policies and restrictions that would operate under a multi-manager structure. The Advisor is a Delaware corporation and is registered as an investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’).1 The Advisor is a wholly-owned subsidiary of Invesco Ltd (‘‘Invesco’’). Invesco maintains an asset management presence through whollyowned subsidiaries, including the Advisor. 2. Each Series has or will have, as its investment adviser, the Advisor, or an entity controlling, controlled by or under common control with the Advisor or its successors (included in the term, the ‘‘Advisor’’).2 The Advisor will serve as the investment adviser to each Series pursuant to an investment advisory agreement with the relevant Trust 1 Applicants request that the relief apply to applicants, as well as to any future Series and any other existing or future registered open-end management investment company or series thereof that is advised by the Advisor, uses the multimanager structure described in the application, and complies with the terms and conditions of the application (‘‘Subadvised Series’’). All registered open-end investment companies that currently intend to rely on the requested order are named as applicants. Any entity that relies on the requested order will do so only in accordance with the terms and conditions contained in the application. If the name of any Subadvised Series contains the name of a Sub-Advisor (as defined below), the name of the Advisor that serves as the primary adviser to the Subadvised Series, or a trademark or trade name that is owned by or publicly used to identify that Advisor, will precede the name of the Sub-Advisor. 2 Each Advisor is, or will be, registered with the Commission as an investment adviser under the Advisers Act. For purposes of the requested order, ‘‘successor’’ is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. VerDate Mar<15>2010 17:17 Nov 20, 2013 Jkt 232001 (‘‘Investment Management Agreement’). Each Investment Management Agreement has been or will be approved by the board of trustees of the relevant Trust (‘‘Board’’),3 including a majority of the members of the Board who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, of the Series or the Advisor (‘‘Independent Board Members’’) and by the shareholders of the relevant Series as required by sections 15(a) and 15(c) of the Act and rule 18f–2 thereunder. The terms of these Investment Management Agreements comply or will comply with section 15(a) of the Act. 3. Under the terms of each Investment Management Agreement, the Advisor, subject to the supervision of the Board, will provide continuous investment management of the assets of each Series. The Advisor will periodically review a Series’ investment policies and strategies, and based on the need of a particular Series may recommend changes to the investment policies and strategies of the Series for consideration by the Board. For its services to each Series under the applicable Investment Management Agreement, the Advisor will receive an investment management fee from that Series. Each Investment Management Agreement provides that the Advisor may, subject to the approval of the Board, including a majority of the Independent Board Members, and the shareholders of the applicable Subadvised Series (if required), delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Series to one or more SubAdvisors.4 4. Applicants request an order to permit the Advisor, subject to the approval of the Board of the relevant Trust, including a majority of the Independent Board Members, to, without obtaining shareholder approval: (i) Select Sub-Advisors to manage all or a portion of the assets of a Series and enter into Sub-Advisory Agreements (as defined below) with the Sub-Advisors, 3 The term ‘‘Board’’ also includes the board of trustees or directors of a future Subadvised Series. 4 A ‘‘Sub-Advisor’’ is (a) an indirect or direct ‘‘wholly-owned subsidiary’’ (as such term is defined in the Act) of the Advisor for that Series; (b) a sister company of the Advisor for that Series that is an indirect or direct ‘‘wholly-owned subsidiary’’ (as such term is defined in the Act) of the same company that, indirectly or directly, wholly owns the Advisor (each of (a) and (b), a ‘‘Wholly-Owned Sub-Advisor’’ and collectively, the ‘‘Wholly-Owned Sub-Advisors’’), or (c) an investment sub-adviser for that Series that is not an ‘‘affiliated person’’ (as such term is defined in section 2(a)(3) of the Act) of the Series or the Advisor, except to the extent that an affiliation arises solely because the sub-adviser serves as a sub-adviser to one or more Series (each, a ‘‘NonAffiliated Sub-Advisor’’). PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 and (ii) materially amend Sub-Advisory Agreements with the Sub-Advisors.5 The requested relief will not extend to any sub-adviser, other than a WhollyOwned Sub-Advisor, who is an affiliated person, as defined in section 2(a)(3) of the Act, of the Subadvised Series, the applicable Trust, or of the Advisor, other than by reason of serving as a sub-adviser to one or more of the Subadvised Series (‘‘Affiliated SubAdvisor’’). 5. Pursuant to each Investment Management Agreement, the Advisor has overall responsibility for the management and investment of the assets of each Subadvised Series. These responsibilities include recommending the removal or replacement of SubAdvisors, determining the portion of that Subadvised Series’ assets to be managed by any given Sub-Advisor and reallocating those assets as necessary from time to time. 6. The Advisor may enter into subadvisory agreements with various SubAdvisors (‘‘Sub-Advisory Agreements’’) to provide investment management services to the Subadvised Series. The terms of each Sub-Advisory Agreement comply or will comply fully with the requirements of section 15(a) of the Act and have been or will be approved by the Board, including a majority of the Independent Board Members and the initial shareholder of the applicable Subadvised Series, in accordance with sections 15(a) and 15(c) of the Act and rule 18f–2 thereunder. The SubAdvisors, subject to the supervision of the Advisor and oversight of the Board, will determine the securities and other investments to be purchased or sold by a Subadvised Series and place orders with brokers or dealers that they select. The Advisor will compensate each SubAdvisor out of the fee paid to the Advisor under the applicable Investment Management Agreement. 7. Subadvised Series will inform shareholders of the hiring of a new SubAdvisor pursuant to the following procedures (‘‘Modified Notice and Access Procedures’’): (a) Within 90 days after a new Sub-Advisor is hired for any Subadvised Series, that Subadvised Series will send its shareholders either a Multi-manager Notice or a Multimanager Notice and Multi-manager Information Statement; 6 and (b) the 5 Shareholder approval will continue to be required for any other sub-adviser change (not otherwise permitted by rule or other action of the Commission or staff) and material amendments to an existing Sub-Advisory Agreement with any subadviser other than a Non-Affiliated Sub-Advisor or a Wholly-Owned Sub-Advisor (all such changes referred to as ‘‘Ineligible Sub-Advisor Changes’’). 6 A ‘‘Multi-manager Notice’’ will be modeled on a Notice of Internet Availability as defined in rule E:\FR\FM\21NON1.SGM 21NON1 Federal Register / Vol. 78, No. 225 / Thursday, November 21, 2013 / Notices Subadvised Series will make the Multimanager 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 Multimanager 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 SubAdvisors provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Applicants state that each Board would comply with the requirements of sections 15(a) and 15(c) of the Act before entering into or amending Sub-Advisory Agreements. 8. Applicants also request an order exempting the Subadvised Series from certain disclosure obligations that may require each Subadvised Series to disclose fees paid by the Advisor to each Sub-Advisor. Applicants seek relief to permit each Subadvised Series to disclose (as a dollar amount and a percentage of the Subadvised Series’ net assets): (a) The aggregate fees paid to the Advisor and any Wholly-Owned SubAdvisors; (b) the aggregate fees paid to Non-Affiliated Sub-Advisors; and (c) the fee paid to each Affiliated Sub-Advisor (collectively, the ‘‘Aggregate Fee Disclosure’’). tkelley on DSK3SPTVN1PROD with NOTICES Applicants’ Legal Analysis 1. Section 15(a) of the Act states, in 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, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such 14a–16 under the Securities Exchange Act of 1934 (‘‘Exchange Act’’), and specifically will, among other things: (a) Summarize the relevant information regarding the new Sub-Advisor (except as modified to permit Aggregate Fee Disclosure (as defined below); (b) inform shareholders that the Multi-manager Information Statement is available on a Web site; (c) provide the Web site address; (d) state the time period during which the Multimanager Information Statement will remain available on that Web site; (e) provide instructions for accessing and printing the Multi-manager Information Statement; and (f) instruct the shareholder that a paper or email copy of the Multimanager Information Statement may be obtained, without charge, by contacting the Subadvised Series. A ‘‘Multi-manager Information Statement’’ will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Exchange Act for an information statement, except as modified by the order to permit Aggregate Fee Disclosure. Multi-manager Information Statements will be filed with the Commission via the EDGAR system. VerDate Mar<15>2010 17:17 Nov 20, 2013 Jkt 232001 registered company.’’ Rule 18f–2 under the Act provides that each series or class of stock in a series investment company affected by a matter must approve that matter if the Act requires shareholder approval. 2. Form N–1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N–1A requires a registered investment company to disclose in its statement of additional information the method of computing the ‘‘advisory fee payable’’ by the investment company, including the total dollar amounts that the investment company ‘‘paid to the adviser (aggregated with amounts paid to affiliated advisers, if any), and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years.’’ 3. Rule 20a–1 under the Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the Exchange Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together, require a proxy statement for a shareholder meeting at which the advisory contract will be voted upon to include the ‘‘rate of compensation of the investment adviser,’’ the ‘‘aggregate amount of the investment adviser’s fee,’’ a description of the ‘‘terms of the contract to be acted upon,’’ and, if a change in the advisory fee is proposed, the existing and proposed fees and the difference between the two fees. 4. Regulation S–X sets forth the requirements for financial statements required to be included as part of a registered investment company’s registration statement and shareholder reports filed with the Commission. Sections 6–07(2)(a), (b), and (c) of Regulation S–X require a registered investment company to include in its financial statement information about the investment advisory fees. 5. Section 6(c) of the Act provides that the Commission by order upon application may conditionally or unconditionally 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 their requested relief meets this standard for the reasons discussed below. 6. Applicants assert that the shareholders expect the Advisor, subject PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 69887 to the review and approval of the Board, to select the Sub-Advisors who are in the best position to achieve the Subadvised Series’ investment objective. Applicants assert that, from the perspective of the shareholder, the role of the Sub-Advisors is substantially equivalent to the role of the individual portfolio managers employed by an investment adviser to a traditional investment company. Applicants believe that permitting the Advisor to perform the duties for which the shareholders of the Subadvised Series are paying the Advisor—the selection, supervision and evaluation of the SubAdvisors—without incurring unnecessary delays or expenses is appropriate in the interest of the Subadvised Series’ shareholders and will allow such Subadvised Series to operate more efficiently. Applicants state that each Investment Management Agreement will continue to be fully subject to section 15(a) of the Act and rule 18f–2 under the Act and approved by the Board, including a majority of the Independent Board Members, in the manner required by sections 15(a) and 15(c) of the Act. Applicants are not seeking an exemption with respect to the Investment Management Agreements. 7. Applicants assert that disclosure of the individual fees that the Advisor would pay to the Sub-Advisors of Subadvised Series that operate under the multi-manager structure described in the application would not serve any meaningful purpose. Applicants contend that the primary reasons for requiring disclosure of individual fees paid to Sub-Advisors are to inform shareholders of expenses to be charged by a particular Subadvised Series and to enable shareholders to compare the fees to those of other comparable investment companies. Applicants believe that the requested relief satisfies these objectives because the advisory fee paid to the Advisor will be fully disclosed and, therefore, shareholders will know what the Subadvised Series’ fees and expenses are and will be able to compare the advisory fees a Subadvised Series is charged to those of other investment companies. Applicants assert that the requested disclosure relief would benefit shareholders of the Subadvised Series because it would improve the Advisor’s ability to negotiate the fees paid to Sub-Advisors. Applicants state that the Advisor may be able to negotiate rates that are below a Sub-Advisor’s ‘‘posted’’ amounts if the Advisor is not required to disclose the Sub-Advisors’ fees to the public. Applicants submit that the relief E:\FR\FM\21NON1.SGM 21NON1 69888 Federal Register / Vol. 78, No. 225 / Thursday, November 21, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES requested to use Aggregate Fee Disclosure will encourage Sub-Advisors to negotiate lower subadvisory fees with the Advisor if the lower fees are not required to be made public. 8. For the reasons discussed above, applicants submit that the requested relief meets the standards for relief under section 6(c) of the Act. Applicants state that the operation of the Subadvised Series in the manner described in the application must be approved by shareholders of a Subadvised Series before that Subadvised Series may rely on the requested relief. In addition, applicants state that the proposed conditions to the requested relief are designed to address any potential conflicts of interest, including any posed by the use of Wholly-Owned Sub-Advisors, and provide that shareholders are informed when new Sub-Advisors are hired. Applicants assert that conditions 6, 10 and 11 are designed to provide the Board with sufficient independence and the resources and information it needs to monitor and address any conflicts of interest with affiliated persons of the Advisor, including Wholly-Owned SubAdvisors. Applicants state that, accordingly, they believe the requested relief 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’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 7 1. Before a Subadvised Series may rely on the order requested in the application, the operation of the Subadvised Series in the manner described in the application, including the hiring of Wholly-Owned SubAdvisors, will be, or has been, approved by a majority of the Subadvised Series’ outstanding voting securities as defined in the Act, or, in the case of a new Subadvised Series 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 Subadvised Series’ shares to the public. 2. The prospectus for each Subadvised Series will disclose the existence, substance, and effect of any order granted pursuant to the application. Each Subadvised Series will hold itself out to the public as 7 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. VerDate Mar<15>2010 17:17 Nov 20, 2013 Jkt 232001 employing the multi-manager structure described in the application. Each prospectus will prominently disclose that the Advisor has the ultimate responsibility, subject to oversight by the Board, to oversee the Sub-Advisors and recommend their hiring, termination and replacement. 3. The Advisor will provide general management services to a Subadvised Series, including overall supervisory responsibility for the general management and investment of the Subadvised Series’ assets. Subject to review and approval of the Board, the Advisor will (a) set a Subadvised Series’ overall investment strategies, (b) evaluate, select, and recommend SubAdvisors to manage all or a portion of a Subadvised Series’ assets, and (c) implement procedures reasonably designed to ensure that Sub-Advisors comply with a Subadvised Series’ investment objective, policies and restrictions. Subject to review by the Board, the Advisor will (a) when appropriate, allocate and reallocate a Subadvised Series’ assets among multiple Sub-Advisors; and (b) monitor and evaluate the performance of SubAdvisors. 4. A Subadvised Series will not make any Ineligible Sub-Advisor Changes without the approval of the shareholders of the applicable Subadvised Series. 5. Subadvised Series will inform shareholders of the hiring of a new SubAdvisor within 90 days after the hiring of the new Sub-Advisor pursuant to the Modified Notice and Access Procedures. 6. At all times, at least a majority of the Board will be Independent Board Members, and the selection and nomination of new or additional Independent Board Members will be placed within the discretion of the thenexisting Independent Board Members. 7. Independent Legal Counsel, as defined in rule 0–1(a)(6) under the Act, will be engaged to represent the Independent Board Members. The selection of such counsel will be within the discretion of the then-existing Independent Board Members. 8. The Advisor will provide the Board, no less frequently than quarterly, with information about the profitability of the Advisor on a per Subadvised Series basis. The information will reflect the impact on profitability of the hiring or termination of any sub-adviser during the applicable quarter. 9. Whenever a sub-adviser is hired or terminated, the Advisor will provide the Board with information showing the expected impact on the profitability of the Advisor. PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 10. Whenever a sub-adviser change is proposed for a Subadvised Series with an Affiliated Sub-Advisor or a WhollyOwned Sub-Advisor, the Board, including a majority of the Independent Board Members, will make a separate finding, reflected in the Board minutes, that such change is in the best interests of the Subadvised Series and its shareholders, and does not involve a conflict of interest from which the Advisor or the Affiliated Sub-Advisor or Wholly-Owned Sub-Advisor derives an inappropriate advantage. 11. No Board member or officer of a Subadvised Series, or director or officer of the Advisor, will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person), any interest in a SubAdvisor, except for (a) ownership of interests in the Advisor or any entity, other than a Wholly-Owned SubAdvisor, that controls, is controlled by, or is under common control with the Advisor, 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 SubAdvisor or an entity that controls, is controlled by, or is under common control with a Sub-Advisor. 12. Each Subadvised Series will disclose the Aggregate Fee Disclosure in its registration statement. 13. In the event the Commission adopts a rule under the Act providing substantially similar relief to that 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. 2013–27907 Filed 11–20–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 30786; File No. 812–14212] ETFis Series Trust I, et al.; Notice of Application November 15, 2013. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c–1 under the Act, under sections 6(c) and 17(b) of the Act for an AGENCY: E:\FR\FM\21NON1.SGM 21NON1

Agencies

[Federal Register Volume 78, Number 225 (Thursday, November 21, 2013)]
[Notices]
[Pages 69885-69888]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27907]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30785; File No. 812-14204]


AIM Growth Series (Invesco Growth Series), et al.; Notice of 
Application

November 15, 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 section 15(a) of 
the Act and rule 18f-2 under the Act, as well as from certain 
disclosure requirements.

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SUMMARY:  Summary of Application: Applicants request an order that 
would permit them to enter into and materially amend subadvisory 
agreements with Wholly-Owned Sub-Advisors (as defined below) and non-
affiliated sub-advisers without shareholder approval and would grant 
relief from certain disclosure requirements.

APPLICANTS: AIM Growth Series (Invesco Growth Series) and AIM 
Investment Funds (Invesco Investment Funds) (each, a ``Trust''), and 
Invesco Advisers, Inc. (the ``Advisor'').

DATES: Filing Dates: The application was filed on August 27, 2013, and 
amended on November 1, 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 December 9, 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: 
Invesco Advisers, Inc., 11

[[Page 69886]]

Greenway Plaza, Suite 2500, Houston, TX 77046.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873, or Mary Kay Frech, Assistant Director (Acting), at 
(202) 551-6821 (Division of Investment Management, Exemptive 
Applications Office).

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

Applicants' Representations

    1. Each Trust is organized as a Delaware statutory trust and is 
registered under the Act as an open-end management investment company. 
Each Trust currently intends to introduce at least one series of shares 
(each, a ``Series'') with its own distinct investment objective, 
policies and restrictions that would operate under a multi-manager 
structure. The Advisor is a Delaware corporation and is registered as 
an investment adviser under the Investment Advisers Act of 1940 
(``Advisers Act'').\1\ The Advisor is a wholly-owned subsidiary of 
Invesco Ltd (``Invesco''). Invesco maintains an asset management 
presence through wholly-owned subsidiaries, including the Advisor.
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    \1\ Applicants request that the relief apply to applicants, as 
well as to any future Series and any other existing or future 
registered open-end management investment company or series thereof 
that is advised by the Advisor, uses the multi-manager structure 
described in the application, and complies with the terms and 
conditions of the application (``Subadvised Series''). All 
registered open-end investment companies that currently intend to 
rely on the requested order are named as applicants. Any entity that 
relies on the requested order will do so only in accordance with the 
terms and conditions contained in the application. If the name of 
any Subadvised Series contains the name of a Sub-Advisor (as defined 
below), the name of the Advisor that serves as the primary adviser 
to the Subadvised Series, or a trademark or trade name that is owned 
by or publicly used to identify that Advisor, will precede the name 
of the Sub-Advisor.
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    2. Each Series has or will have, as its investment adviser, the 
Advisor, or an entity controlling, controlled by or under common 
control with the Advisor or its successors (included in the term, the 
``Advisor'').\2\ The Advisor will serve as the investment adviser to 
each Series pursuant to an investment advisory agreement with the 
relevant Trust (``Investment Management Agreement'). Each Investment 
Management Agreement has been or will be approved by the board of 
trustees of the relevant Trust (``Board''),\3\ including a majority of 
the members of the Board who are not ``interested persons,'' as defined 
in section 2(a)(19) of the Act, of the Series or the Advisor 
(``Independent Board Members'') and by the shareholders of the relevant 
Series as required by sections 15(a) and 15(c) of the Act and rule 18f-
2 thereunder. The terms of these Investment Management Agreements 
comply or will comply with section 15(a) of the Act.
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    \2\ Each Advisor is, or will be, registered with the Commission 
as an investment adviser under the Advisers Act. For purposes of the 
requested order, ``successor'' is limited to an entity that results 
from a reorganization into another jurisdiction or a change in the 
type of business organization.
    \3\ The term ``Board'' also includes the board of trustees or 
directors of a future Subadvised Series.
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    3. Under the terms of each Investment Management Agreement, the 
Advisor, subject to the supervision of the Board, will provide 
continuous investment management of the assets of each Series. The 
Advisor will periodically review a Series' investment policies and 
strategies, and based on the need of a particular Series may recommend 
changes to the investment policies and strategies of the Series for 
consideration by the Board. For its services to each Series under the 
applicable Investment Management Agreement, the Advisor will receive an 
investment management fee from that Series. Each Investment Management 
Agreement provides that the Advisor may, subject to the approval of the 
Board, including a majority of the Independent Board Members, and the 
shareholders of the applicable Subadvised Series (if required), 
delegate portfolio management responsibilities of all or a portion of 
the assets of a Subadvised Series to one or more Sub-Advisors.\4\
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    \4\ A ``Sub-Advisor'' is (a) an indirect or direct ``wholly-
owned subsidiary'' (as such term is defined in the Act) of the 
Advisor for that Series; (b) a sister company of the Advisor for 
that Series that is an indirect or direct ``wholly-owned 
subsidiary'' (as such term is defined in the Act) of the same 
company that, indirectly or directly, wholly owns the Advisor (each 
of (a) and (b), a ``Wholly-Owned Sub-Advisor'' and collectively, the 
``Wholly-Owned Sub-Advisors''), or (c) an investment sub-adviser for 
that Series that is not an ``affiliated person'' (as such term is 
defined in section 2(a)(3) of the Act) of the Series or the Advisor, 
except to the extent that an affiliation arises solely because the 
sub-adviser serves as a sub-adviser to one or more Series (each, a 
``Non-Affiliated Sub-Advisor'').
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    4. Applicants request an order to permit the Advisor, subject to 
the approval of the Board of the relevant Trust, including a majority 
of the Independent Board Members, to, without obtaining shareholder 
approval: (i) Select Sub-Advisors to manage all or a portion of the 
assets of a Series and enter into Sub-Advisory Agreements (as defined 
below) with the Sub-Advisors, and (ii) materially amend Sub-Advisory 
Agreements with the Sub-Advisors.\5\ The requested relief will not 
extend to any sub-adviser, other than a Wholly-Owned Sub-Advisor, who 
is an affiliated person, as defined in section 2(a)(3) of the Act, of 
the Subadvised Series, the applicable Trust, or of the Advisor, other 
than by reason of serving as a sub-adviser to one or more of the 
Subadvised Series (``Affiliated Sub-Advisor'').
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    \5\ Shareholder approval will continue to be required for any 
other sub-adviser change (not otherwise permitted by rule or other 
action of the Commission or staff) and material amendments to an 
existing Sub-Advisory Agreement with any sub-adviser other than a 
Non-Affiliated Sub-Advisor or a Wholly-Owned Sub-Advisor (all such 
changes referred to as ``Ineligible Sub-Advisor Changes'').
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    5. Pursuant to each Investment Management Agreement, the Advisor 
has overall responsibility for the management and investment of the 
assets of each Subadvised Series. These responsibilities include 
recommending the removal or replacement of Sub-Advisors, determining 
the portion of that Subadvised Series' assets to be managed by any 
given Sub-Advisor and reallocating those assets as necessary from time 
to time.
    6. The Advisor may enter into sub-advisory agreements with various 
Sub-Advisors (``Sub-Advisory Agreements'') to provide investment 
management services to the Subadvised Series. The terms of each Sub-
Advisory Agreement comply or will comply fully with the requirements of 
section 15(a) of the Act and have been or will be approved by the 
Board, including a majority of the Independent Board Members and the 
initial shareholder of the applicable Subadvised Series, in accordance 
with sections 15(a) and 15(c) of the Act and rule 18f-2 thereunder. The 
Sub-Advisors, subject to the supervision of the Advisor and oversight 
of the Board, will determine the securities and other investments to be 
purchased or sold by a Subadvised Series and place orders with brokers 
or dealers that they select. The Advisor will compensate each Sub-
Advisor out of the fee paid to the Advisor under the applicable 
Investment Management Agreement.
    7. Subadvised Series will inform shareholders of the hiring of a 
new Sub-Advisor pursuant to the following procedures (``Modified Notice 
and Access Procedures''): (a) Within 90 days after a new Sub-Advisor is 
hired for any Subadvised Series, that Subadvised Series will send its 
shareholders either a Multi-manager Notice or a Multi-manager Notice 
and Multi-manager Information Statement; \6\ and (b) the

[[Page 69887]]

Subadvised Series will make the Multi-manager Information Statement 
available on the Web site identified in the Multi-manager Notice no 
later than when the Multi-manager Notice (or Multi-manager Notice and 
Multi-manager Information Statement) is first sent to shareholders, and 
will maintain it on that Web site for at least 90 days. In the 
circumstances described in the application, a proxy solicitation to 
approve the appointment of new Sub-Advisors provides no more meaningful 
information to shareholders than the proposed Multi-manager Information 
Statement. Applicants state that each Board would comply with the 
requirements of sections 15(a) and 15(c) of the Act before entering 
into or amending Sub-Advisory Agreements.
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    \6\ A ``Multi-manager Notice'' will be modeled on a Notice of 
Internet Availability as defined in rule 14a-16 under the Securities 
Exchange Act of 1934 (``Exchange Act''), and specifically will, 
among other things: (a) Summarize the relevant information regarding 
the new Sub-Advisor (except as modified to permit Aggregate Fee 
Disclosure (as defined below); (b) inform shareholders that the 
Multi-manager Information Statement is available on a Web site; (c) 
provide the Web site address; (d) state the time period during which 
the Multi-manager Information Statement will remain available on 
that Web site; (e) provide instructions for accessing and printing 
the Multi-manager Information Statement; and (f) instruct the 
shareholder that a paper or email copy of the Multi-manager 
Information Statement may be obtained, without charge, by contacting 
the Subadvised Series.
    A ``Multi-manager Information Statement'' will meet the 
requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 
14A under the Exchange Act for an information statement, except as 
modified by the order to permit Aggregate Fee Disclosure. Multi-
manager Information Statements will be filed with the Commission via 
the EDGAR system.
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    8. Applicants also request an order exempting the Subadvised Series 
from certain disclosure obligations that may require each Subadvised 
Series to disclose fees paid by the Advisor to each Sub-Advisor. 
Applicants seek relief to permit each Subadvised Series to disclose (as 
a dollar amount and a percentage of the Subadvised Series' net assets): 
(a) The aggregate fees paid to the Advisor and any Wholly-Owned Sub-
Advisors; (b) the aggregate fees paid to Non-Affiliated Sub-Advisors; 
and (c) the fee paid to each Affiliated Sub-Advisor (collectively, the 
``Aggregate Fee Disclosure'').

Applicants' Legal Analysis

    1. Section 15(a) of the Act states, in 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, which 
contract, whether with such registered company or with an investment 
adviser of such registered company, has been approved by the vote of a 
majority of the outstanding voting securities of such registered 
company.'' Rule 18f-2 under the Act provides that each series or class 
of stock in a series investment company affected by a matter must 
approve that matter if the Act requires shareholder approval.
    2. Form N-1A is the registration statement used by open-end 
investment companies. Item 19(a)(3) of Form N-1A requires a registered 
investment company to disclose in its statement of additional 
information the method of computing the ``advisory fee payable'' by the 
investment company, including the total dollar amounts that the 
investment company ``paid to the adviser (aggregated with amounts paid 
to affiliated advisers, if any), and any advisers who are not 
affiliated persons of the adviser, under the investment advisory 
contract for the last three fiscal years.''
    3. Rule 20a-1 under the Act requires proxies solicited with respect 
to a registered investment company to comply with Schedule 14A under 
the Exchange Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 
22(c)(9) of Schedule 14A, taken together, require a proxy statement for 
a shareholder meeting at which the advisory contract will be voted upon 
to include the ``rate of compensation of the investment adviser,'' the 
``aggregate amount of the investment adviser's fee,'' a description of 
the ``terms of the contract to be acted upon,'' and, if a change in the 
advisory fee is proposed, the existing and proposed fees and the 
difference between the two fees.
    4. Regulation S-X sets forth the requirements for financial 
statements required to be included as part of a registered investment 
company's registration statement and shareholder reports filed with the 
Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require 
a registered investment company to include in its financial statement 
information about the investment advisory fees.
    5. Section 6(c) of the Act provides that the Commission by order 
upon application may conditionally or unconditionally 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 their requested relief meets this standard for 
the reasons discussed below.
    6. Applicants assert that the shareholders expect the Advisor, 
subject to the review and approval of the Board, to select the Sub-
Advisors who are in the best position to achieve the Subadvised Series' 
investment objective. Applicants assert that, from the perspective of 
the shareholder, the role of the Sub-Advisors is substantially 
equivalent to the role of the individual portfolio managers employed by 
an investment adviser to a traditional investment company. Applicants 
believe that permitting the Advisor to perform the duties for which the 
shareholders of the Subadvised Series are paying the Advisor--the 
selection, supervision and evaluation of the Sub-Advisors--without 
incurring unnecessary delays or expenses is appropriate in the interest 
of the Subadvised Series' shareholders and will allow such Subadvised 
Series to operate more efficiently. Applicants state that each 
Investment Management Agreement will continue to be fully subject to 
section 15(a) of the Act and rule 18f-2 under the Act and approved by 
the Board, including a majority of the Independent Board Members, in 
the manner required by sections 15(a) and 15(c) of the Act. Applicants 
are not seeking an exemption with respect to the Investment Management 
Agreements.
    7. Applicants assert that disclosure of the individual fees that 
the Advisor would pay to the Sub-Advisors of Subadvised Series that 
operate under the multi-manager structure described in the application 
would not serve any meaningful purpose. Applicants contend that the 
primary reasons for requiring disclosure of individual fees paid to 
Sub-Advisors are to inform shareholders of expenses to be charged by a 
particular Subadvised Series and to enable shareholders to compare the 
fees to those of other comparable investment companies. Applicants 
believe that the requested relief satisfies these objectives because 
the advisory fee paid to the Advisor will be fully disclosed and, 
therefore, shareholders will know what the Subadvised Series' fees and 
expenses are and will be able to compare the advisory fees a Subadvised 
Series is charged to those of other investment companies. Applicants 
assert that the requested disclosure relief would benefit shareholders 
of the Subadvised Series because it would improve the Advisor's ability 
to negotiate the fees paid to Sub-Advisors. Applicants state that the 
Advisor may be able to negotiate rates that are below a Sub-Advisor's 
``posted'' amounts if the Advisor is not required to disclose the Sub-
Advisors' fees to the public. Applicants submit that the relief

[[Page 69888]]

requested to use Aggregate Fee Disclosure will encourage Sub-Advisors 
to negotiate lower subadvisory fees with the Advisor if the lower fees 
are not required to be made public.
    8. For the reasons discussed above, applicants submit that the 
requested relief meets the standards for relief under section 6(c) of 
the Act. Applicants state that the operation of the Subadvised Series 
in the manner described in the application must be approved by 
shareholders of a Subadvised Series before that Subadvised Series may 
rely on the requested relief. In addition, applicants state that the 
proposed conditions to the requested relief are designed to address any 
potential conflicts of interest, including any posed by the use of 
Wholly-Owned Sub-Advisors, and provide that shareholders are informed 
when new Sub-Advisors are hired. Applicants assert that conditions 6, 
10 and 11 are designed to provide the Board with sufficient 
independence and the resources and information it needs to monitor and 
address any conflicts of interest with affiliated persons of the 
Advisor, including Wholly-Owned Sub-Advisors. Applicants state that, 
accordingly, they believe the requested relief 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' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions: \7\
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    \7\ 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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    1. Before a Subadvised Series may rely on the order requested in 
the application, the operation of the Subadvised Series in the manner 
described in the application, including the hiring of Wholly-Owned Sub-
Advisors, will be, or has been, approved by a majority of the 
Subadvised Series' outstanding voting securities as defined in the Act, 
or, in the case of a new Subadvised Series 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 Subadvised Series' shares to the public.
    2. The prospectus for each Subadvised Series will disclose the 
existence, substance, and effect of any order granted pursuant to the 
application. Each Subadvised Series will hold itself out to the public 
as employing the multi-manager structure described in the application. 
Each prospectus will prominently disclose that the Advisor has the 
ultimate responsibility, subject to oversight by the Board, to oversee 
the Sub-Advisors and recommend their hiring, termination and 
replacement.
    3. The Advisor will provide general management services to a 
Subadvised Series, including overall supervisory responsibility for the 
general management and investment of the Subadvised Series' assets. 
Subject to review and approval of the Board, the Advisor will (a) set a 
Subadvised Series' overall investment strategies, (b) evaluate, select, 
and recommend Sub-Advisors to manage all or a portion of a Subadvised 
Series' assets, and (c) implement procedures reasonably designed to 
ensure that Sub-Advisors comply with a Subadvised Series' investment 
objective, policies and restrictions. Subject to review by the Board, 
the Advisor will (a) when appropriate, allocate and reallocate a 
Subadvised Series' assets among multiple Sub-Advisors; and (b) monitor 
and evaluate the performance of Sub-Advisors.
    4. A Subadvised Series will not make any Ineligible Sub-Advisor 
Changes without the approval of the shareholders of the applicable 
Subadvised Series.
    5. Subadvised Series will inform shareholders of the hiring of a 
new Sub-Advisor within 90 days after the hiring of the new Sub-Advisor 
pursuant to the Modified Notice and Access Procedures.
    6. At all times, at least a majority of the Board will be 
Independent Board Members, and the selection and nomination of new or 
additional Independent Board Members will be placed within the 
discretion of the then-existing Independent Board Members.
    7. Independent Legal Counsel, as defined in rule 0-1(a)(6) under 
the Act, will be engaged to represent the Independent Board Members. 
The selection of such counsel will be within the discretion of the 
then-existing Independent Board Members.
    8. The Advisor will provide the Board, no less frequently than 
quarterly, with information about the profitability of the Advisor on a 
per Subadvised Series basis. The information will reflect the impact on 
profitability of the hiring or termination of any sub-adviser during 
the applicable quarter.
    9. Whenever a sub-adviser is hired or terminated, the Advisor will 
provide the Board with information showing the expected impact on the 
profitability of the Advisor.
    10. Whenever a sub-adviser change is proposed for a Subadvised 
Series with an Affiliated Sub-Advisor or a Wholly-Owned Sub-Advisor, 
the Board, including a majority of the Independent Board Members, will 
make a separate finding, reflected in the Board minutes, that such 
change is in the best interests of the Subadvised Series and its 
shareholders, and does not involve a conflict of interest from which 
the Advisor or the Affiliated Sub-Advisor or Wholly-Owned Sub-Advisor 
derives an inappropriate advantage.
    11. No Board member or officer of a Subadvised Series, or director 
or officer of the Advisor, will own directly or indirectly (other than 
through a pooled investment vehicle that is not controlled by such 
person), any interest in a Sub-Advisor, except for (a) ownership of 
interests in the Advisor or any entity, other than a Wholly-Owned Sub-
Advisor, that controls, is controlled by, or is under common control 
with the Advisor, 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 Sub-Advisor or an entity that controls, is controlled 
by, or is under common control with a Sub-Advisor.
    12. Each Subadvised Series will disclose the Aggregate Fee 
Disclosure in its registration statement.
    13. In the event the Commission adopts a rule under the Act 
providing substantially similar relief to that 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. 2013-27907 Filed 11-20-13; 8:45 am]
BILLING CODE 8011-01-P