Altegris Advisors L.L.C. and Northern Lights Fund Trust; Notice of Application, 44873-44875 [2014-18129]

Download as PDF Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / Notices 4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses. OPM 1655, Application for Senior Administrative Law Judge, and OPM 1655–A, Geographic Preference Statement for Senior Administrative Law Judge Applicant, are used by retired Administrative Law Judges seeking reemployment on a temporary and intermittent basis to complete hearings of one or more specified case(s) in accordance with the Administrative Procedure Act of 1946. OPM proposes to revise the information collection to more clearly state, in the form instructions, the licensure requirement for appointment as an ALJ; to eliminate an obsolete reference to the OF 612, Optional Application for Federal Employment, which OPM canceled on June 13, 2011, see 76 FR 31998; to reference a full list of the Privacy Act routine uses applicable to this information collection; to update geographic locations; and to make technical changes to citations and terminology. tkelley on DSK3SPTVN1PROD with NOTICES Analysis Agency: Administrative Law Judge Program Office, Office of Personnel Management. Title: OPM 1655, Application for Senior Administrative Law Judge, and OPM 1655–A, Geographic Preference Statement for Senior Administrative Law Judge Applicant. OMB Number: 3206–0248. Frequency: Annually. Affected Public: Federal Administrative Law Judge Retirees. Number of Respondents: Approximately 150—OPM 1655/ Approximately 200—OPM 1655–A. Estimated Time per Respondent: Approximately 30–45 Minutes—OPM 1655/Approximately 15–25 Minutes— OPM 1655–A. Total Burden Hours: Estimated 94 hours—OPM 1655/Estimated 67 hours— OPM 1655–A. U.S. Office of Personnel Management. Katherine Archuleta, Director. [FR Doc. 2014–18187 Filed 7–31–14; 8:45 am] BILLING CODE 6325–43–P VerDate Mar<15>2010 22:09 Jul 31, 2014 Jkt 232001 SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 31189; File No. 812–14196] Altegris Advisors L.L.C. and Northern Lights Fund Trust; Notice of Application July 28, 2014. 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: Applicants request an order that would permit them to enter into and materially amend subadvisory agreements without shareholder approval and would grant relief from certain disclosure requirements. The order would supersede a prior order.1 APPLICANTS: Altegris Advisors L.L.C. (the ‘‘Adviser’’) and Northern Lights Fund Trust (the ‘‘Trust’’). FILING DATES: The application was filed on August 5, 2013 and amended on March 17, 2014, April 17, 2014, and July 11, 2014. 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 August 21, 2014, and should be accompanied by proof of service on the applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants: Adviser, 1200 Prospect Street, Suite 400, La Jolla CA 92037; Trust: 17065 Wright Street, Suite 2, Omaha, NE 68130. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at (202) 551–6817 or Daniele Marchesani, SUMMARY OF APPLICATION: 1 Altegris Advisors, L.L.C. et al., Investment Company Act Rel. Nos. 29689 (June 1, 2011) (notice) and 29710 (June 28, 2011) (order). PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 44873 Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel’s 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 https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicants’ Representations 1. The Trust, a Delaware statutory trust, is registered under the Act as an open-end management investment company and is comprised of multiple series, each with its own investment, objectives and policies.2 The Adviser is a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’) and serves as the investment adviser to the Funds pursuant to investment advisory agreements (‘‘Advisory Agreements’’) with the Trust. The Advisory Agreements were approved by the Trust’s board of trustees (together with the board of directors or trustees of any other Fund, the ‘‘Board’’),3 including a majority of the trustees who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, of the Trust or the Adviser (‘‘Independent Trustees’’) and by the shareholders of the relevant Fund in the manner required by sections 15(a) and 15(c) of the Act and rule 18f–2 thereunder. Applicants are not seeking any exemptions from the provisions of the Act with respect to any Advisory Agreement. 2. Under the terms of the Advisory Agreements, each Adviser, subject to the oversight of the applicable Board, is 2 Altegris Managed Futures Strategy Fund (the ‘‘MF Fund’’), Altegris Macro Strategy Fund (the ‘‘MS Fund’’), Altegris Futures Evolution Fund (the ‘‘FE Fund’’), Altegris Equity Long Short Fund (the ‘‘ELS Fund’’), Altegris Fixed Income Long Short Fund (the ‘‘FILS Fund’’), Altegris Multi-Strategy Alternative Fund (the ‘‘MSA Fund’’), and the Altegris/AACA Real Estate Long Short Fund (the ‘‘RELS’’ Fund’’) are the only Funds (defined below) that currently intend to rely on the requested order. Applicants request relief with respect to existing and future series of the Trust and any other existing or future registered open-end management investment company or series thereof that: (a) Is advised by the Adviser; (b) uses the manager of managers structure (‘‘Manager of Managers Structure’’) described in the application; and (c) complies with the terms and conditions of the application (together with the MF Fund, the MS Fund, FE Fund, ELS Fund, the FILS Fund, the MSA Fund, and the RELS Fund, the ‘‘Funds’’ and each, individually, a ‘‘Fund.’’). If the name of any Fund contains the name of a Sub-Adviser, the name of the Adviser will precede the name of the SubAdviser. 3 The term ‘‘Board’’ also includes the board of trustees of a future Fund. E:\FR\FM\01AUN1.SGM 01AUN1 tkelley on DSK3SPTVN1PROD with NOTICES 44874 Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / Notices responsible for the overall management of the Funds’ business affairs and selecting the Funds’ investments according to the Funds’ investment objectives, policies, and restrictions. For the investment advisory services that they provide to the Funds, the Advisers receive a fee from the Funds as specified in the Advisory Agreements. The Advisory Agreements also authorize the Advisers to retain one or more unaffiliated investment subadvisers (each, a ‘‘Sub-Adviser’’), to be compensated by the Advisers for the purpose of managing the investment of the assets of the Funds. The Advisers have entered into subadvisory agreements (‘‘Sub-Advisory Agreements’’) with various SubAdvisers to provide investment advisory services to certain Funds.4 Each SubAdviser is, and each future Sub-Adviser will be, an ‘‘investment adviser,’’ as defined in section 2(a)(20)(B) of the Act, and registered as an investment adviser under the Advisers Act, or not subject to such registration. The Advisers will evaluate, allocate assets to, and oversee the Sub-Advisers, and make recommendations about their hiring, termination, and replacement to the applicable Board, at all times subject to the authority of that Board. The Adviser compensates each Sub-Adviser out of the fee paid by a Fund to the Adviser under the Advisory Agreement. 3. Applicants request an order to permit the Advisers, subject to Board approval, to engage Sub-Advisers to manage all or a portion of the assets of a Fund pursuant to a Sub-Advisory Agreement and materially amend SubAdvisory Agreements without obtaining shareholder approval. The requested relief will not extend to any SubAdviser that is an ‘‘affiliated person,’’ as defined in section 2(a)(3) of the Act, of a Fund or the Adviser, other than by reason of serving as Sub-Adviser to a Fund (‘‘Affiliated Sub-Adviser’’). 4. Applicants also request an order exempting each Fund from certain disclosure provisions described below that may require the Funds to disclose fees paid by the Advisers to each SubAdviser. Applicants seek an order to permit each Fund to disclose (as both a dollar amount and as a percentage of a Fund’s net assets) only: (a) The aggregate fees paid to its Adviser and any Affiliated Sub-Advisers; and (b) the aggregate fees paid to Sub-Advisers other than Affiliated Sub-Advisers (collectively, the ‘‘Aggregate Fee Disclosure’’). A Fund that employs an Affiliated Sub-Adviser will provide 4 All Sub-Advisory Agreements comply with sections 15(a) and (c) of the Act. VerDate Mar<15>2010 22:09 Jul 31, 2014 Jkt 232001 separate disclosure of any fees paid to the Affiliated Sub-Adviser. 5. The Funds will inform shareholders of the hiring of a new SubAdviser pursuant to the following procedures (‘‘Modified Notice and Access Procedures’’): (a) Within 90 days after a new Sub-Adviser is hired for any Fund, that Fund will send its shareholders either a Multi-Manager Notice or a Multi-Manager Notice and Multi-Manager Information Statement; 5 and (b) the Fund 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. 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 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 disclosure of the method and amount of the investment adviser’s compensation. 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 5 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-Adviser; (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 Funds. 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 requested order to permit Aggregate Fee Disclosure. Multi-Manager Information Statements will be filed electronically with the Commission via the EDGAR system. PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 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 fees,’’ 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 may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provision 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. 6. Applicants assert that the shareholders expect each Fund’s Adviser, subject to the review and approval of the Board, to select the SubAdvisers who are best suited to achieve the Fund’s investment objective. Applicants assert that, from the perspective of the shareholder, the role of the Sub-Adviser is substantially equivalent to the role of the individual portfolio managers employed by traditional investment company advisory firms. Applicants state that requiring shareholder approval of each Sub-Advisory Agreement would impose unnecessary delays and expenses on the Funds, and may preclude a Fund from acting promptly when the applicable Board and Adviser believe that a change would benefit the Fund and its shareholders. Applicants note that the Advisory Agreements and any SubAdvisory Agreement with an Affiliated Sub-Adviser (if any) will continue to be subject to the shareholder approval requirements of section 15(a) of the Act and rule 18f–2 under the Act. 7. Applicants assert that the requested disclosure relief would benefit shareholders of the Funds because it would improve the Advisers’ ability to negotiate the fees paid to Sub-Advisers. E:\FR\FM\01AUN1.SGM 01AUN1 Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / Notices tkelley on DSK3SPTVN1PROD with NOTICES Applicants state that the Advisers may be able to negotiate rates that are below a Sub-Adviser’s ‘‘posted’’ amounts, if the Adviser is not required to disclose the Sub-Advisers’ fees to the public. Applicants submit that the requested relief will encourage Sub-Advisers to negotiate lower subadvisory fees with the Advisers if the lower fees are not required to be made public. 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 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 1940 Act, or, in the case of a Fund whose public shareholders purchased shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Fund’s shares are offered to the public. 2. The prospectus for each Fund will disclose the existence, substance, and effect of any order granted pursuant to the application. In addition, each Fund will hold itself out to the public as employing the Manager of Managers Structure. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Sub-Advisers and recommend their hiring, termination, and replacement. 3. Funds will inform shareholders of the hiring of a new Sub-Adviser 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 Sub-Advisory Agreement with any Affiliated Sub-Adviser 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 of new or additional Independent Trustees will be placed within the discretion of the thenexisting Independent Trustees. 6. Independent Legal Counsel, as defined in Rule 0–1(a)(6) under the 1940 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. 7. Whenever a Sub-Adviser change is proposed for a Fund with an Affiliated Sub-Adviser, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected VerDate Mar<15>2010 22:09 Jul 31, 2014 Jkt 232001 in the Trust’s board minutes, that the 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. 8. Whenever a Sub-Adviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser. 9. 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 Sub-Adviser during the applicable quarter. 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 by the Board, will: (a) Set the Fund’s overall investment strategies; (b) evaluate, select and recommend SubAdvisers to manage all or a part of the Fund’s assets; (c) when appropriate, allocate and reallocate the Fund’s assets among Sub-Advisers; (d) monitor and evaluate the investment performance of Sub-Advisers; and (e) implement procedures reasonably designed to ensure that the Sub-Advisers comply with the Fund’s investment objectives, policies, and restrictions. 11. No Trustee or officer of the Trust or of a Fund or director 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 Sub-Adviser 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 Sub-Adviser 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 that the Commission adopts a rule under the 1940 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. 14. Any new Sub-Advisory Agreement or any amendments to a Fund’s existing Advisory Agreement or Sub-Advisory Agreement that directly PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 44875 or indirectly results in an increase in the aggregate advisory fee rate payable by the Fund will be submitted to the Fund’s shareholders for approval. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–18129 Filed 7–31–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72693] Order Granting a Limited Exemption From Rule 102 of Regulation M Concerning the BATS Exchange, Inc.’s Pilot Supplemental Competitive Liquidity Provider Program July 28, 2014. The Securities and Exchange Commission (‘‘Commission’’) approved a proposed rule change of the BATS Exchange, Inc. (‘‘Exchange’’ or ‘‘BATS’’) to add new Interpretation and Policy .03 to Rule 11.8 (‘‘New IP .03’’) which establishes the Supplemental Competitive Liquidity Provider (‘‘CLP’’) Program (‘‘CLP Program’’ or ‘‘Program’’) effective for one year on a pilot basis (the ‘‘pilot’’). The CLP Program permits certain market makers to become CLPs (‘‘ETP CLPs’’) in exchange-traded products (‘‘ETPs’’).1 The Exchange states that the CLP Program is designed to incentivize quoting volume in certain ETPs by providing credit to CLPs for certain market making activity.2 Participating issuers (or sponsors on behalf of the issuer) fund the Program by paying non-refundable ‘‘CLP Fees,’’ which are then credited to the Exchange’s general revenues.3 The 1 See New IP .03(f) (establishing the qualifications to be a CLP); see also Securities Exchange Act Release No. 72692 (July 28, 2014) (SR–BATS 2014– 022) (‘‘Approval Order’’) (providing more details regarding the Program). 2 See Approval Order. The Approval Order contains a detailed description of the Program. The proposed rule change was published for comment in the Federal Register on June 13, 2014. Securities Exchange Act Release No. 72346 (Jun. 9, 2014), 79 FR 33982 (Jun. 13, 2014). The Approval Order grants approval of the proposed rule change. 3 The program is similar to other programs, such as NYSE Arca’s ‘‘ETP Incentive Program’’ and NASDAQ Stock Market LLC’s ‘‘Market Quality Program,’’ designed to permit ETP issuers to pay incentives to those who make markets in their ETPs. See Securities Exchange Act Release No. 69706 (June 6, 2013); 78 FR 35340 (June 12, 2013) (NYSEArca 2013–34) and Securities Exchange Act Release No. 69195 (Mar. 20, 2013); 78 FR 18393 (Mar. 26, 2013) (NASDAQ 2012–137); see also Securities Exchange Act Release No. 69707 (June 6, 2013); 78 FR 35330 (June 12, 2013) (approving a E:\FR\FM\01AUN1.SGM Continued 01AUN1

Agencies

[Federal Register Volume 79, Number 148 (Friday, August 1, 2014)]
[Notices]
[Pages 44873-44875]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18129]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31189; File No. 812-14196]


Altegris Advisors L.L.C. and Northern Lights Fund Trust; Notice 
of Application

July 28, 2014.
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 of Application:  Applicants request an order that would permit 
them to enter into and materially amend subadvisory agreements without 
shareholder approval and would grant relief from certain disclosure 
requirements. The order would supersede a prior order.\1\
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    \1\ Altegris Advisors, L.L.C. et al., Investment Company Act 
Rel. Nos. 29689 (June 1, 2011) (notice) and 29710 (June 28, 2011) 
(order).

Applicants: Altegris Advisors L.L.C. (the ``Adviser'') and Northern 
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Lights Fund Trust (the ``Trust'').

Filing Dates: The application was filed on August 5, 2013 and amended 
on March 17, 2014, April 17, 2014, and July 11, 2014.

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 August 21, 2014, and should be accompanied by proof of service 
on the applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090. Applicants: Adviser, 1200 
Prospect Street, Suite 400, La Jolla CA 92037; Trust: 17065 Wright 
Street, Suite 2, Omaha, NE 68130.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at 
(202) 551-6817 or Daniele Marchesani, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Chief Counsel's 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 https://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Trust, a Delaware statutory trust, is registered under the 
Act as an open-end management investment company and is comprised of 
multiple series, each with its own investment, objectives and 
policies.\2\ The Adviser is a Delaware limited liability company 
registered as an investment adviser under the Investment Advisers Act 
of 1940 (``Advisers Act'') and serves as the investment adviser to the 
Funds pursuant to investment advisory agreements (``Advisory 
Agreements'') with the Trust. The Advisory Agreements were approved by 
the Trust's board of trustees (together with the board of directors or 
trustees of any other Fund, the ``Board''),\3\ including a majority of 
the trustees who are not ``interested persons,'' as defined in section 
2(a)(19) of the Act, of the Trust or the Adviser (``Independent 
Trustees'') and by the shareholders of the relevant Fund in the manner 
required by sections 15(a) and 15(c) of the Act and rule 18f-2 
thereunder. Applicants are not seeking any exemptions from the 
provisions of the Act with respect to any Advisory Agreement.
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    \2\ Altegris Managed Futures Strategy Fund (the ``MF Fund''), 
Altegris Macro Strategy Fund (the ``MS Fund''), Altegris Futures 
Evolution Fund (the ``FE Fund''), Altegris Equity Long Short Fund 
(the ``ELS Fund''), Altegris Fixed Income Long Short Fund (the 
``FILS Fund''), Altegris Multi-Strategy Alternative Fund (the ``MSA 
Fund''), and the Altegris/AACA Real Estate Long Short Fund (the 
``RELS'' Fund'') are the only Funds (defined below) that currently 
intend to rely on the requested order. Applicants request relief 
with respect to existing and future series of the Trust and any 
other existing or future registered open-end management investment 
company or series thereof that: (a) Is advised by the Adviser; (b) 
uses the manager of managers structure (``Manager of Managers 
Structure'') described in the application; and (c) complies with the 
terms and conditions of the application (together with the MF Fund, 
the MS Fund, FE Fund, ELS Fund, the FILS Fund, the MSA Fund, and the 
RELS Fund, the ``Funds'' and each, individually, a ``Fund.''). If 
the name of any Fund contains the name of a Sub-Adviser, the name of 
the Adviser will precede the name of the Sub-Adviser.
    \3\ The term ``Board'' also includes the board of trustees of a 
future Fund.
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    2. Under the terms of the Advisory Agreements, each Adviser, 
subject to the oversight of the applicable Board, is

[[Page 44874]]

responsible for the overall management of the Funds' business affairs 
and selecting the Funds' investments according to the Funds' investment 
objectives, policies, and restrictions. For the investment advisory 
services that they provide to the Funds, the Advisers receive a fee 
from the Funds as specified in the Advisory Agreements. The Advisory 
Agreements also authorize the Advisers to retain one or more 
unaffiliated investment subadvisers (each, a ``Sub-Adviser''), to be 
compensated by the Advisers for the purpose of managing the investment 
of the assets of the Funds. The Advisers have entered into subadvisory 
agreements (``Sub-Advisory Agreements'') with various Sub-Advisers to 
provide investment advisory services to certain Funds.\4\ Each Sub-
Adviser is, and each future Sub-Adviser will be, an ``investment 
adviser,'' as defined in section 2(a)(20)(B) of the Act, and registered 
as an investment adviser under the Advisers Act, or not subject to such 
registration. The Advisers will evaluate, allocate assets to, and 
oversee the Sub-Advisers, and make recommendations about their hiring, 
termination, and replacement to the applicable Board, at all times 
subject to the authority of that Board. The Adviser compensates each 
Sub-Adviser out of the fee paid by a Fund to the Adviser under the 
Advisory Agreement.
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    \4\ All Sub-Advisory Agreements comply with sections 15(a) and 
(c) of the Act.
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    3. Applicants request an order to permit the Advisers, subject to 
Board approval, to engage Sub-Advisers to manage all or a portion of 
the assets of a Fund pursuant to a Sub-Advisory Agreement and 
materially amend Sub-Advisory Agreements without obtaining shareholder 
approval. The requested relief will not extend to any Sub-Adviser that 
is an ``affiliated person,'' as defined in section 2(a)(3) of the Act, 
of a Fund or the Adviser, other than by reason of serving as Sub-
Adviser to a Fund (``Affiliated Sub-Adviser'').
    4. Applicants also request an order exempting each Fund from 
certain disclosure provisions described below that may require the 
Funds to disclose fees paid by the Advisers to each Sub-Adviser. 
Applicants seek an order to permit each Fund to disclose (as both a 
dollar amount and as a percentage of a Fund's net assets) only: (a) The 
aggregate fees paid to its Adviser and any Affiliated Sub-Advisers; and 
(b) the aggregate fees paid to Sub-Advisers other than Affiliated Sub-
Advisers (collectively, the ``Aggregate Fee Disclosure''). A Fund that 
employs an Affiliated Sub-Adviser will provide separate disclosure of 
any fees paid to the Affiliated Sub-Adviser.
    5. The Funds will inform shareholders of the hiring of a new Sub-
Adviser pursuant to the following procedures (``Modified Notice and 
Access Procedures''): (a) Within 90 days after a new Sub-Adviser is 
hired for any Fund, that Fund will send its shareholders either a 
Multi-Manager Notice or a Multi-Manager Notice and Multi-Manager 
Information Statement; \5\ and (b) the Fund 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.
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    \5\ 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-Adviser; (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 Funds. 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 
requested order to permit Aggregate Fee Disclosure. Multi-Manager 
Information Statements will be filed electronically with the 
Commission via the EDGAR system.
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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 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 disclosure of 
the method and amount of the investment adviser's compensation.
    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 fees,'' 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 may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provision 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.
    6. Applicants assert that the shareholders expect each Fund's 
Adviser, subject to the review and approval of the Board, to select the 
Sub-Advisers who are best suited to achieve the Fund's investment 
objective. Applicants assert that, from the perspective of the 
shareholder, the role of the Sub-Adviser is substantially equivalent to 
the role of the individual portfolio managers employed by traditional 
investment company advisory firms. Applicants state that requiring 
shareholder approval of each Sub-Advisory Agreement would impose 
unnecessary delays and expenses on the Funds, and may preclude a Fund 
from acting promptly when the applicable Board and Adviser believe that 
a change would benefit the Fund and its shareholders. Applicants note 
that the Advisory Agreements and any Sub-Advisory Agreement with an 
Affiliated Sub-Adviser (if any) will continue to be subject to the 
shareholder approval requirements of section 15(a) of the Act and rule 
18f-2 under the Act.
    7. Applicants assert that the requested disclosure relief would 
benefit shareholders of the Funds because it would improve the 
Advisers' ability to negotiate the fees paid to Sub-Advisers.

[[Page 44875]]

Applicants state that the Advisers may be able to negotiate rates that 
are below a Sub-Adviser's ``posted'' amounts, if the Adviser is not 
required to disclose the Sub-Advisers' fees to the public. Applicants 
submit that the requested relief will encourage Sub-Advisers to 
negotiate lower subadvisory fees with the Advisers if the lower fees 
are not required to be made public.

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 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 
1940 Act, or, in the case of a Fund whose public shareholders purchased 
shares on the basis of a prospectus containing the disclosure 
contemplated by condition 2 below, by the initial shareholder before 
such Fund's shares are offered to the public.
    2. The prospectus for each Fund will disclose the existence, 
substance, and effect of any order granted pursuant to the application. 
In addition, each Fund will hold itself out to the public as employing 
the Manager of Managers Structure. The prospectus will prominently 
disclose that the Adviser has the ultimate responsibility, subject to 
oversight by the Board, to oversee the Sub-Advisers and recommend their 
hiring, termination, and replacement.
    3. Funds will inform shareholders of the hiring of a new Sub-
Adviser within 90 days after the hiring of the new Sub-Adviser pursuant 
to the Modified Notice and Access Procedures.
    4. The Adviser will not enter into a Sub-Advisory Agreement with 
any Affiliated Sub-Adviser 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 of new or additional 
Independent Trustees will be placed within the discretion of the then-
existing Independent Trustees.
    6. Independent Legal Counsel, as defined in Rule 0-1(a)(6) under 
the 1940 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.
    7. Whenever a Sub-Adviser change is proposed for a Fund with an 
Affiliated Sub-Adviser, the Board, including a majority of the 
Independent Trustees, will make a separate finding, reflected in the 
Trust's board minutes, that the 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 Sub-Adviser derives an 
inappropriate advantage.
    8. Whenever a Sub-Adviser is hired or terminated, the Adviser will 
provide the Board with information showing the expected impact on the 
profitability of the Adviser.
    9. 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 Sub-Adviser during 
the applicable quarter.
    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 by the Board, will: (a) Set the Fund's overall investment 
strategies; (b) evaluate, select and recommend Sub-Advisers to manage 
all or a part of the Fund's assets; (c) when appropriate, allocate and 
reallocate the Fund's assets among Sub-Advisers; (d) monitor and 
evaluate the investment performance of Sub-Advisers; and (e) implement 
procedures reasonably designed to ensure that the Sub-Advisers comply 
with the Fund's investment objectives, policies, and restrictions.
    11. No Trustee or officer of the Trust or of a Fund or director 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 Sub-Adviser 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 Sub-Adviser or an entity 
that controls, is controlled by, or is under common control with a Sub-
Adviser.
    12. Each Fund will disclose in its registration statement the 
Aggregate Fee Disclosure.
    13. In the event that the Commission adopts a rule under the 1940 
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.
    14. Any new Sub-Advisory Agreement or any amendments to a Fund's 
existing Advisory Agreement or Sub-Advisory Agreement that directly or 
indirectly results in an increase in the aggregate advisory fee rate 
payable by the Fund will be submitted to the Fund's shareholders for 
approval.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-18129 Filed 7-31-14; 8:45 am]
BILLING CODE 8011-01-P
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