AllianceBernstein Multi-Manager Alternative Fund, et al.;, 65731-65732 [2014-26351]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 214 (Wednesday, November 5, 2014)]
[Notices]
[Pages 65731-65732]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26351]



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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31322; 812-14227]


AllianceBernstein Multi-Manager Alternative Fund, et al.; Notice 
of Application

October 31, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from sections 18(c) 
and 18(i) of the Act and for an order pursuant to section 17(d) of the 
Act and rule 17d-1 under the Act.

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Summary of Application: Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of shares (``Shares'') and to impose asset-based distribution 
and service fees and contingent deferred sales charges (``CDSCs'').

Applicants: AllianceBernstein Multi-Manager Alternative Fund (the 
``Fund''), AllianceBernstein L.P. (the ``Adviser''), Sanford C. 
Bernstein & Company, LLC (``SCB''), and AllianceBernstein Investments, 
Inc. (``ABI'' and, together with SCB, the ``Distributors'' and each, a 
``Distributor'').

Filing Dates: The application was filed on October 29, 2013 and amended 
on May 22, 2014 and October 7, 2014.

Hearing or Notification of Hearing: An order granting the requested 
relief 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 November 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. Pursuant to rule 0-5 under the Act, 
hearing requests should state the nature of the writer's interest, any 
facts bearing upon the desirability of a hearing on the matter, 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: 
Emilie D. Wrapp, AllianceBernstein L.P., 1345 Avenue of the Americas, 
New York, New York 10105.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876 or Mary Kay Frech, 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 Fund is a continuously offered non-diversified closed-end 
management investment company registered under the Act and organized as 
a Delaware statutory trust. The Adviser is registered as an investment 
adviser under the Investment Advisers Act of 1940 and serves as 
investment adviser to the Fund. SCB, a broker-dealer registered under 
the Securities Exchange Act of 1934 (the ``1934 Act''), acts as 
principal underwriter to the Fund. ABI, a registered broker-dealer 
under the 1934 Act, may enter into a distribution agreement with the 
Fund, pursuant to which it would distribute certain classes of shares 
(``Shares'') of the Fund. The Distributors are under common control 
with the Adviser and are affiliated persons, as defined in section 
2(a)(3) of the Act, of the Adviser.
    2. The Fund continuously offers its Shares to the public pursuant 
to a registration statement under the Securities Act of 1933. The 
Shares of the Fund are not listed on any securities exchange and are 
not traded on an over-the-counter system such as NASDAQ. Applicants do 
not expect that any secondary market will develop for the Shares.
    3. The Fund currently offers, and intends to continue to offer, an 
initial class of Shares (``Initial Class'') at net asset value without 
any sales load, service fee, or distribution fee. The Fund may offer 
new Share classes at net asset value and may also charge a front-end 
sales load, a CDSC, and/or an annual asset-based service and/or 
distribution fee.\1\
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    \1\ Shares may be subject to an early withdrawal fee at a rate 
of 2% of the aggregate net asset value of a shareholder's Shares 
repurchased by the Fund (the ``Early Withdrawal Fee'') if the 
interval between the date of purchase of the Shares and the 
valuation date with respect to the repurchase of those Shares is 
less than one year. Any Early Withdrawal Fee imposed by the Fund 
would apply to all classes of Shares of the Fund, consistent with 
section 18 of the Act and rule 18f-3 thereunder. To the extent the 
Fund determines to waive, impose scheduled variations of, or 
eliminate any Early Withdrawal Fee, it will do so consistently with 
the requirements of rule 22d-1 under the Act and the Fund's waiver 
of, scheduled variation in, or elimination of, any such Early 
Withdrawal Fee will apply uniformly to all shareholders of the Fund.
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    4. In order to provide a degree of liquidity to shareholders, the 
Fund may from time to time offer to repurchase Shares at net asset 
value in accordance with rule 13e-4 under the 1934 Act. A Fund will 
repurchase Shares at such times, in such amounts and on such terms as 
may be determined by the board of trustees (``Board'') of the Fund in 
its sole discretion. The Adviser expects to recommend ordinarily that 
the Board authorize each Fund to offer to repurchase Shares from 
shareholders quarterly.
    5. Applicants request that the order also apply to any other 
continuously offered registered closed-end management investment 
companies existing now or in the future for which the Adviser, a 
Distributor, or any entity controlling, controlled by or under common 
control with the Adviser or a Distributor acts as investment adviser or 
principal underwriter, and which provides periodic liquidity with 
respect to its Shares pursuant to rule 13e-4 under the 1934 Act (such 
investment companies, together with the Fund, the ``Funds'').\2\
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    \2\ Any Fund relying on this relief in the future will do so in 
a manner consistent with the terms and conditions of the 
application. Applicants represent that any investment company 
presently intending to rely on the requested relief is listed as an 
applicant.
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    6. Applicants represent that any asset-based service and 
distribution fees will comply with the provisions of rule 2830(d) of 
the Conduct Rules of the National Association of Securities Dealers, 
Inc. (``NASD Conduct Rule 2830'').\3\ Applicants also represent that 
each Fund will disclose in its prospectus, the fees, expenses and other 
characteristics of each class of Shares offered for sale by the 
prospectus as is required for open-end multiple class funds under Form 
N-1A. The Fund will disclose fund expenses in shareholder reports as if 
it were an open-end management investment company, and disclose any 
arrangements that result in breakpoints in, or elimination of, sales 
loads in its prospectus.\4\ The Fund and

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the Distributors will also comply with any requirements that may be 
adopted by the Commission or FINRA regarding disclosure at the point of 
sale and in transaction confirmations about the costs and conflicts of 
interest arising out of the distribution of open-end investment company 
shares, and regarding prospectus disclosure of sales loads and revenue 
sharing arrangements as if those requirements applied to the Fund and 
the Distributors.\5\
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    \3\ All references to NASD Conduct Rule 2830 include any 
successor or replacement rule that may be adopted by the Financial 
Industry Regulatory Authority (``FINRA'').
    \4\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring 
open-end investment companies to disclose fund expenses in 
shareholder reports); and Disclosure of Breakpoint Discounts by 
Mutual Funds, Investment Company Act Release No. 26464 (June 7, 
2004) (adopting release) (requiring open-end investment companies to 
provide prospectus disclosure of certain sales load information).
    \5\ See, e.g., Confirmation Requirements and Point of Sale 
Disclosure Requirements for Transactions in Certain Mutual Funds and 
Other Securities, and Other Confirmation Requirement Amendments, and 
Amendments to the Registration Form for Mutual Funds, Investment 
Company Act Release No. 26341 (Jan. 29, 2004) (proposing release).
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    7. The Fund will allocate all expenses incurred by it among the 
various classes of Shares based on the respective net assets of the 
Fund attributable to each such class, except that the net asset value 
and expenses of each class will reflect distribution fees, service 
fees, and any other incremental expenses of that class. Expenses of the 
Fund respectively allocated to a particular class of the Fund's Shares 
will be borne on a pro rata basis by each outstanding Share of that 
class. Applicants state that the Fund will comply with the provisions 
of rule 18f-3 under the Act as if it were an open-end investment 
company.
    8. In the event a Fund imposes a CDSC, the applicants will comply 
with the provisions of rule 6c-10, as if that rule applied to closed-
end management investment companies. With respect to any waiver of, 
scheduled variation in, or elimination of the CDSC, the Fund will 
comply with rule 22d-1 under the Act as if the Fund were an open-end 
investment company.

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the creation of 
multiple classes of Shares of the Funds may be prohibited by section 
18(c).
    2. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that permitting multiple classes of Shares of 
the Funds may violate section 18(i) of the Act because each class would 
be entitled to exclusive voting rights with respect to matters solely 
related to that class.
    3. 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 under the Act, if and to the extent 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 request an exemption under section 
6(c) from sections 18(c) and 18(i) to permit the Funds to issue 
multiple classes of Shares.
    4. Applicants submit that the proposed allocation of expenses and 
voting rights among multiple classes is equitable and will not 
discriminate against any group or class of shareholders. Applicants 
submit that the proposed arrangements would permit the Fund to 
facilitate the distribution of its Shares and provide shareholders with 
a broader choice of investment options. Applicants assert that the 
proposed closed-end investment company multiple class structure does 
not raise the concerns underlying section 18 of the Act to any greater 
degree than open-end investment companies' multiple class structures 
that are permitted by rule 18f-3 under the Act. Applicants state that 
each Fund will comply with the provisions of rule 18f-3 as if it were 
an open-end investment company.

CDSCs

    1. Applicants believe that the requested relief meets the standards 
of section 6(c) of the Act. Rule 6c-10 under the Act permits open-end 
investment companies to impose CDSCs, subject to certain conditions. 
Applicants state that any CDSC imposed by the Fund will comply with 
rule 6c-10 under the Act as if the rule were applicable to closed-end 
investment companies. The Fund also will disclose CDSCs in accordance 
with the requirements of Form N-1A concerning CDSCs as if the Fund were 
an open-end investment company. Applicants further state that the Fund 
will apply the CDSC (and any waivers or scheduled variations of the 
CDSC) uniformly to all shareholders in a given class and consistently 
with the requirements of rule 22d-1 under the Act. Any scheduled 
variations in, or eliminations of, any sales load will be applied 
consistently with the requirements of rule 22d-1 under the Act.

Asset-Based Service and Distribution Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to permit the Funds to impose asset-based service and/or 
distribution fees. Applicants will comply with rules 12b-1 and 17d-3 as 
if those rules applied to closed-end investment companies.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Applicants will comply with the provisions of rules 6c-10,12b-1, 
17d-3, 18f-3, and 22d-1 under the Act, as amended from time to time or 
replaced, as if those rules applied to closed-end management investment 
companies, and will comply with NASD Conduct Rule 2830, as amended from 
time to time, as if that rule applied to all closed-end management 
investment companies.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-26351 Filed 11-4-14; 8:45 am]
BILLING CODE 8011-01-P