Pomona Investment Fund, et al.; Notice of Application, 55885-55887 [2015-23288]
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tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Notices
that are not on the Watch List would be
subject to a separate proposed rule
change pursuant to section 19(b)(1) of
the Act,9 and the rules thereunder and
an advance notice pursuant to section
806(e)(1) of the Clearing Supervision
Act,10 and the rules thereunder.
Consistency with the Clearing
Supervision Act. The objectives and
principles of section 805(b)(1) of the
Clearing Supervision Act specify the
promotion of robust risk management,
promotion of safety and soundness,
reduction of systemic risks and support
of the stability of the broader financial
system.11 Rule 17Ad–22(b)(1),
promulgated under the Act, requires
NSCC to measure its credit exposures to
its participants at least once a day and
limit its exposures to potential losses
from defaults by its participants under
normal market conditions so that the
operations of the clearing agency would
not be disrupted and non-defaulting
participants would not be exposed to
losses that they cannot anticipate or
control.12 Rule 17Ad–22(b)(2),
promulgated under the Act, requires
NSCC to use risk-based models for
setting margin requirements.13
By enhancing the margin
methodology as applied to the familyissued securities of its Members that are
on its Watch List the proposal would
assist NSCC in collecting margin that
more accurately reflects the risk
characteristics of these securities,
thereby limiting NSCC’s exposures to
potential losses from defaults by these
Members under normal market
conditions. By more closely capturing
the risk characteristics of these
positions, the proposed enhancement to
the margining methodology would also
assist NSCC in its continuous efforts to
ensure the reliability and effectiveness
of its risk-based margining
methodology. In this way, the proposal
would help NSCC, as a central
counterparty, maintain effective risk
controls, contributing to the goal of
maintaining financial stability in the
event of a Member default. Therefore,
NSCC believes the proposal is
consistent with the requirements of
section 805(b)(1) of the Clearing
Supervision Act and Rule 17Ad-22(b)(1)
and (2), promulgated under the Act,
cited above.
9 15
U.S.C. 78s(b)(1).
U.S.C. 5465(e)(1).
11 12 U.S.C. 5464(b)(1).
12 17 CFR 240.17Ad–22(b)(1).
13 17 CFR 240.17Ad–22(b)(2).
10 12
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III. Date of Effectiveness of the Advance
Notice, and Timing for Commission
Action
The proposed change may be
implemented if the Commission does
not object to the proposed change
within 60 days of the later of (i) the date
that the proposed change was filed with
the Commission or (ii) the date that any
additional information requested by the
Commission is received. NSCC shall not
implement the proposed change if the
Commission has any objection to the
proposed change.
The Commission may extend the
period for review by an additional 60
days if the proposed change raises novel
or complex issues, subject to the
Commission providing NSCC with
prompt written notice of the extension.
The proposed change may be
implemented in less than 60 days from
the date the Advance Notice is filed, or
the date further information requested
by the Commission is received, if the
Commission notifies NSCC in writing
that it does not object to the proposed
change and authorizes NSCC to
implement the proposed change on an
earlier date, subject to any conditions
imposed by the Commission.
NSCC shall post notice on its Web site
of proposed changes that are
implemented.
The proposal shall not take effect
until all regulatory actions required
with respect to the proposal are
completed.
IV. Solicitation of Comments
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NSCC–2015–803 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NSCC–2015–803. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
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only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the Advance Notice that
are filed with the Commission, and all
written communications relating to the
Advance Notice between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of NSCC and on DTCC’s Web site
(https://dtcc.com/legal/sec-rulefilings.aspx). All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NSCC–
2015–803 and should be submitted on
or before October 8, 2015.
By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2015–23283 Filed 9–16–15; 8:45 am]
BILLING CODE 8011–01–P
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the Advance Notice
is consistent with the Clearing
Supervision Act. Comments may be
submitted by any of the following
methods:
PO 00000
55885
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31819; 812–14416]
Pomona Investment Fund, et al.;
Notice of Application
September 11, 2015.
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.
AGENCY:
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 loads (‘‘CDSCs’’).
SUMMARY OF APPLICATION:
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55886
Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Notices
Pomona Investment Fund
(the ‘‘Fund’’), Pomona Management LLC
(the ‘‘Adviser’’) and Voya Investments
Distributor, LLC (the ‘‘Distributor’’).
FILING DATES: The application was filed
on January 13, 2015, and amended on
May 28, 2015 and August 10, 2015.
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 October 6, 2015, 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: Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090;
Applicants, c/o Michael Granoff,
Pomona Management LLC, 780 3rd
Avenue, New York, New York 10017.
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, Office of
Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
APPLICANTS:
tkelley on DSK3SPTVN1PROD with NOTICES
Applicants’ Representations
1. The Fund is a non-diversified
closed-end management investment
company registered under the Act and
organized as a Delaware statutory trust.
The Adviser, a Delaware limited
liability company, is registered as an
investment adviser under the
Investment Advisers Act of 1940 and
serves as investment adviser to the
Fund. The Distributor, a broker-dealer
registered under the Securities
Exchange Act of 1934 (‘‘1934 Act’’), acts
as principal underwriter of the Fund.
The Distributor is under common
control with the Adviser and is an
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affiliated person, as defined in section
2(a)(3) of the Act, of the Adviser.
2. The Fund is engaged in a
continuous public offering of Shares
pursuant to its currently effective
registration statement under the
Securities Act of 1933 (‘‘Securities
Act’’).1 The Fund’s Shares 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 Fund’s Shares.
3. The Fund currently issues a single
class of Shares (the ‘‘Class A’’) at net
asset value per share (‘‘NAV’’), subject
to a front-end sales load and an assetbased distribution and services fee. The
Fund proposes to offer multiple classes
of Shares (each a ‘‘New Class’’) at NAV
and may also charge a front-end sales
load and an annual asset-based
distribution and/or service fee. Each
class of Shares would comply with the
provisions of rule 12b–1 under the Act,
as if the rule applied to closed-end
management investment companies.
4. In order to provide a limited degree
of liquidity to shareholders, the Fund
may from time to time offer to
repurchase Shares at their then-current
NAV in accordance with rule 13e–4
under the 1934 Act. Repurchases of the
Fund’s Shares will be made at such
times, in such amounts and on such
terms as may be determined by the
Fund’s board of trustees (the ‘‘Board’’)
in its sole discretion.2 The Adviser
expects that it will generally
recommend to the Board that the Fund
offer to repurchase Shares from
shareholders quarterly.
5. Applicants request that the order
also apply to any continuously-offered
registered closed-end management
investment company existing now or in
the future for which the Adviser or the
Distributor, or any entity controlling,
controlled by, or under common control
with the Adviser or the Distributor, acts
as investment adviser or principal
underwriter, and which provides
periodic liquidity with respect to its
Shares through tender offers conducted
1 Shares of the Fund will only be sold to
‘‘accredited investors,’’ as defined in Regulation D
under the Securities Act.
2 For Class A, a 2% early repurchase fee will be
charged by the Fund with respect to any repurchase
of Shares from a shareholder at any time prior to
the one-year anniversary of the shareholder’s
purchase of the respective Shares. Any early
repurchase fee, and the Fund’s waiver of, scheduled
variation in, or elimination of, such early
repurchase fee, will equally apply to all
shareholders of the Fund, regardless of class,
consistent with section 18 of the Act and rule 18f3 thereunder. To the extent the Fund determines to
waive, impose scheduled variations of, or eliminate
the early repurchase fee, it will do so consistently
with the requirements of rule 22d–1 under the Act.
PO 00000
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pursuant to rule 13e–4 under the 1934
Act (collectively with the Fund, the
‘‘Funds’’).3
6. Applicants represent that any assetbased distribution and/or service 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’’).4 Applicants also represent that
the 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. As if it were
an open-end management investment
company, the Fund will disclose fund
expenses in shareholder reports, and
disclose in its prospectus any
arrangements that result in breakpoints
in, or elimination of, sales loads.5 Each
Fund and the Distributor 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 openend investment company shares, and
regarding prospectus disclosure of sales
loads and revenue sharing arrangements
as if those requirements applied to the
Fund and the Distributor.6
7. The Fund will allocate all expenses
incurred by it among the various classes
of Shares based on net assets of the
Fund attributable to each such class,
except that the NAV and expenses of
each class will reflect the expenses
associated with the distribution fees
paid pursuant to a plan adopted in
compliance with rule 12b–1 of that class
(if any), shareholder servicing fees
attributable to a particular class (as well
as transfer agency fees, if any) and any
other incremental expenses particular to
that class. Expenses of the Fund
allocated to a particular class of the
3 Any Fund relying on this relief will do so in a
manner consistent with the terms and conditions of
the application. Applicants represent that each
investment company presently intending to rely on
the requested order is listed as an applicant.
4 Any references to NASD Conduct Rule 2830
include any successor or replacement Financial
Industry Regulatory Authority (‘‘FINRA’’) rule to
NASD Conduct Rule 2830.
5 See Shareholder Reports and Quarterly Portfolio
Disclosure of Registered Management Investment
Companies, Investment Company Act Release No.
26372 (Feb. 27, 2004) (adopting release); and
Disclosure of Breakpoint Discounts by Mutual
Funds, Investment Company Act Release No. 26464
(June 7, 2004) (adopting release).
6 See 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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Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Notices
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 the Funds impose a
CDSC, applicants will comply with the
provisions of rule 6c–10 under the Act,
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
the requirements of rule 22d–1 under
the Act as if the Fund were an open-end
investment company.
Applicants’ Legal Analysis
tkelley on DSK3SPTVN1PROD with NOTICES
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 Fund
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 the Fund 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 Fund 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 system would permit the
Fund to facilitate the distribution of
Shares through diverse distribution
channels and would provide investors
with a broader choice of shareholder
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17:30 Sep 16, 2015
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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 the Fund will
comply with the provisions of rule 18f–
3 as if it were an open-end investment
company.
CDSCs
5. 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 that rule were
applied to closed-end investment
companies. The Fund also will make all
required disclosures in accordance with
the requirements of Form N–1A
concerning CDSCs. Applicants further
state that, in the event the Fund imposes
CDSCs, the Fund will apply the CDSCs
(and any waivers, scheduled variations,
or eliminations of the CDSCs) uniformly
to all shareholders in a given class and
consistently with the requirements of
rule 22d–1 under the Act.
Asset-Based Service and/or Distribution
Fees
6. 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 which such
registered company is a joint or a joint
and several participant 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.
7. 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
Fund to pay asset-based distribution
and/or service fees. Applicants have
PO 00000
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55887
agreed to 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 the 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.
Brent J. Fields,
Secretary.
[FR Doc. 2015–23288 Filed 9–16–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75903; File No. SR–C2–
2015–023]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Amend the Fees Schedule
September 11, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on
September 1, 2015 C2 Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘C2’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Fees Schedule. The text of the proposed
rule change is available on the
Exchange’s Web site (https://
www.c2exchange.com/Legal/), at the
Exchange’s Office of the Secretary, and
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
17SEN1
]]>Agencies
[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Notices]
[Pages 55885-55887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23288]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 31819; 812-14416]
Pomona Investment Fund, et al.; Notice of Application
September 11, 2015.
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.
-----------------------------------------------------------------------
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 loads (``CDSCs'').
[[Page 55886]]
Applicants: Pomona Investment Fund (the ``Fund''), Pomona Management
LLC (the ``Adviser'') and Voya Investments Distributor, LLC (the
``Distributor'').
Filing Dates: The application was filed on January 13, 2015, and
amended on May 28, 2015 and August 10, 2015.
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 October 6, 2015, 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: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090; Applicants, c/o Michael Granoff,
Pomona Management LLC, 780 3rd Avenue, New York, New York 10017.
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, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or 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 non-diversified closed-end management investment
company registered under the Act and organized as a Delaware statutory
trust. The Adviser, a Delaware limited liability company, is registered
as an investment adviser under the Investment Advisers Act of 1940 and
serves as investment adviser to the Fund. The Distributor, a broker-
dealer registered under the Securities Exchange Act of 1934 (``1934
Act''), acts as principal underwriter of the Fund. The Distributor is
under common control with the Adviser and is an affiliated person, as
defined in section 2(a)(3) of the Act, of the Adviser.
2. The Fund is engaged in a continuous public offering of Shares
pursuant to its currently effective registration statement under the
Securities Act of 1933 (``Securities Act'').\1\ The Fund's Shares 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 Fund's Shares.
---------------------------------------------------------------------------
\1\ Shares of the Fund will only be sold to ``accredited
investors,'' as defined in Regulation D under the Securities Act.
---------------------------------------------------------------------------
3. The Fund currently issues a single class of Shares (the ``Class
A'') at net asset value per share (``NAV''), subject to a front-end
sales load and an asset-based distribution and services fee. The Fund
proposes to offer multiple classes of Shares (each a ``New Class'') at
NAV and may also charge a front-end sales load and an annual asset-
based distribution and/or service fee. Each class of Shares would
comply with the provisions of rule 12b-1 under the Act, as if the rule
applied to closed-end management investment companies.
4. In order to provide a limited degree of liquidity to
shareholders, the Fund may from time to time offer to repurchase Shares
at their then-current NAV in accordance with rule 13e-4 under the 1934
Act. Repurchases of the Fund's Shares will be made at such times, in
such amounts and on such terms as may be determined by the Fund's board
of trustees (the ``Board'') in its sole discretion.\2\ The Adviser
expects that it will generally recommend to the Board that the Fund
offer to repurchase Shares from shareholders quarterly.
---------------------------------------------------------------------------
\2\ For Class A, a 2% early repurchase fee will be charged by
the Fund with respect to any repurchase of Shares from a shareholder
at any time prior to the one-year anniversary of the shareholder's
purchase of the respective Shares. Any early repurchase fee, and the
Fund's waiver of, scheduled variation in, or elimination of, such
early repurchase fee, will equally apply to all shareholders of the
Fund, regardless of class, 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 the early repurchase
fee, it will do so consistently with the requirements of rule 22d-1
under the Act.
---------------------------------------------------------------------------
5. Applicants request that the order also apply to any
continuously-offered registered closed-end management investment
company existing now or in the future for which the Adviser or the
Distributor, or any entity controlling, controlled by, or under common
control with the Adviser or the Distributor, acts as investment adviser
or principal underwriter, and which provides periodic liquidity with
respect to its Shares through tender offers conducted pursuant to rule
13e-4 under the 1934 Act (collectively with the Fund, the
``Funds'').\3\
---------------------------------------------------------------------------
\3\ Any Fund relying on this relief will do so in a manner
consistent with the terms and conditions of the application.
Applicants represent that each investment company presently
intending to rely on the requested order is listed as an applicant.
---------------------------------------------------------------------------
6. Applicants represent that any asset-based distribution and/or
service 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'').\4\ Applicants also represent that the
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. As if it were an open-end management investment company, the
Fund will disclose fund expenses in shareholder reports, and disclose
in its prospectus any arrangements that result in breakpoints in, or
elimination of, sales loads.\5\ Each Fund and the Distributor 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 Distributor.\6\
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\4\ Any references to NASD Conduct Rule 2830 include any
successor or replacement Financial Industry Regulatory Authority
(``FINRA'') rule to NASD Conduct Rule 2830.
\5\ See Shareholder Reports and Quarterly Portfolio Disclosure
of Registered Management Investment Companies, Investment Company
Act Release No. 26372 (Feb. 27, 2004) (adopting release); and
Disclosure of Breakpoint Discounts by Mutual Funds, Investment
Company Act Release No. 26464 (June 7, 2004) (adopting release).
\6\ See 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 net assets of the Fund attributable
to each such class, except that the NAV and expenses of each class will
reflect the expenses associated with the distribution fees paid
pursuant to a plan adopted in compliance with rule 12b-1 of that class
(if any), shareholder servicing fees attributable to a particular class
(as well as transfer agency fees, if any) and any other incremental
expenses particular to that class. Expenses of the Fund allocated to a
particular class of the
[[Page 55887]]
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 the Funds impose a CDSC, applicants will comply
with the provisions of rule 6c-10 under the Act, 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 the requirements of 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 Fund 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 the Fund
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 Fund 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 system would permit the Fund to facilitate the
distribution of Shares through diverse distribution channels and would
provide investors with a broader choice of shareholder 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 the Fund will comply with the provisions of rule
18f-3 as if it were an open-end investment company.
CDSCs
5. 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 that rule were applied to closed-end
investment companies. The Fund also will make all required disclosures
in accordance with the requirements of Form N-1A concerning CDSCs.
Applicants further state that, in the event the Fund imposes CDSCs, the
Fund will apply the CDSCs (and any waivers, scheduled variations, or
eliminations of the CDSCs) uniformly to all shareholders in a given
class and consistently with the requirements of rule 22d-1 under the
Act.
Asset-Based Service and/or Distribution Fees
6. 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 which such registered
company is a joint or a joint and several participant 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.
7. 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 Fund to pay asset-based distribution and/or
service fees. Applicants have agreed to 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 the 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.
Brent J. Fields,
Secretary.
[FR Doc. 2015-23288 Filed 9-16-15; 8:45 am]
BILLING CODE 8011-01-P
