Forum Funds and Exceed Advisory LLC; Notice of Application, 70019-70021 [2015-28694]
Download as PDF
<![CDATA[
Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
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 relating
to distribution 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 a Fund to facilitate the
distribution of its shares and provide
investors with a broader choice of
shareholder services. 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.
Early Withdrawal Charges
1. Section 23(c) of the Act provides,
in relevant part, that no registered
closed-end investment company shall
purchase securities of which it is the
issuer, except: (a) On a securities
exchange or other open market; (b)
pursuant to tenders, after reasonable
opportunity to submit tenders given to
all holders of securities of the class to
be purchased; or (c) under other
circumstances as the Commission may
permit by rules and regulations or
orders for the protection of investors.
2. Rule 23c–3 under the Act permits
a registered closed-end investment
company (an ‘‘interval fund’’) to make
repurchase offers of between five and
twenty-five percent of its outstanding
shares at net asset value at periodic
intervals pursuant to a fundamental
policy of the interval fund. Rule 23c–
3(b)(1) under the Act permits an interval
fund to deduct from repurchase
proceeds only a repurchase fee, not to
exceed two percent of the proceeds, that
is paid to the interval fund and is
reasonably intended to compensate the
fund for expenses directly related to the
repurchase.
3. Section 23(c)(3) provides that the
Commission may issue an order that
would permit a closed-end investment
company to repurchase its shares in
circumstances in which the repurchase
is made in a manner or on a basis that
does not unfairly discriminate against
any holders of the class or classes of
securities to be purchased.
4. Applicants request relief under
section 6(c), discussed above, and
section 23(c)(3) from rule 23c–3 to the
extent necessary for the Funds to
VerDate Sep<11>2014
18:15 Nov 10, 2015
Jkt 238001
impose EWCs on shares of the Funds
submitted for repurchase that have been
held for less than a specified period.
5. Applicants state that the EWCs they
intend to impose are functionally
similar to CDSLs imposed by open-end
investment companies under rule 6c–10
under the Act. Rule 6c–10 permits openend investment companies to impose
CDSLs, subject to certain conditions.
Applicants note that rule 6c–10 is
grounded in policy considerations
supporting the employment of CDSLs
where there are adequate safeguards for
the investor and state that the same
policy considerations support
imposition of EWCs in the interval fund
context. In addition, applicants state
that EWCs may be necessary for the
distributor to recover distribution costs.
Applicants represent that any EWC
imposed by the Funds will comply with
rule 6c–10 under the Act as if the rule
were applicable to closed-end
investment companies. The Funds will
disclose EWCs in accordance with the
requirements of Form N–1A concerning
CDSLs.
Asset-Based 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 the extent
necessary to permit the Fund to impose
asset-based distribution fees. Applicants
have agreed to comply with rules 12b–
1 and 17d–3 as if those rules applied to
closed-end investment companies,
which they believe will resolve any
concerns that might arise in connection
with a Fund financing the distribution
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
70019
of its shares through asset-based
distribution fees.
For the reasons stated above,
applicants submit that the exemptions
requested under section 6(c) are
necessary and appropriate in the public
interest and are consistent with the
protection of investors and the purposes
fairly intended by the policy and
provisions of the Act. Applicants further
submit that the relief requested
pursuant to section 23(c)(3) will be
consistent with the protection of
investors and will insure that applicants
do not unfairly discriminate against any
holders of the class of securities to be
purchased. Finally, applicants state that
the Funds’ imposition of asset-based
distribution fees is consistent with the
provisions, policies and purposes of the
Act and does not involve participation
on a basis different from or less
advantageous than that of other
participants.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
Each Fund relying on the order will
comply with the provisions of rules 6c–
10, 12b–1, 17d–3, 18f–3, 22d–1, and,
where applicable, 11a–3 under the Act,
as amended from time to time, as if
those rules applied to closed-end
management investment companies,
and will comply with the NASD Sales
Charge Rule, as amended from time to
time, as if that rule applied to all closedend management investment
companies.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–28696 Filed 11–10–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31893; 812–14531]
Forum Funds and Exceed Advisory
LLC; Notice of Application
November 5, 2015.
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 in rule
20a-1 under the Act, Item 19(a)(3) of
AGENCY:
E:\FR\FM\12NON1.SGM
12NON1
70020
Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices
Form N-1A, Items 22(c)(1)(ii),
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
Schedule 14A under the Securities
Exchange Act of 1934, and Sections 6–
07(2)(a), (b), and (c) of Regulation S–X
(‘‘Disclosure Requirements’’). The
requested exemption would permit an
investment adviser to hire and replace
certain sub-advisers without
shareholder approval and grant relief
from the Disclosure Requirements as
they relate to fees paid to the subadvisers.
Forum Funds (the
‘‘Trust’’), a Delaware statutory trust
registered under the Act as an open-end
management investment company with
multiple series, and Exceed Advisory
LLC (the ‘‘Adviser’’), a Delaware limited
liability company registered as an
investment adviser under the
Investment Advisers Act of 1940
(together, the Trust and Adviser are
‘‘Applicants’’).
FILING DATES: The application was filed
on August 11, 2015, and amended on
October 8, 2015.
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 November 30, 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: Zachary R. Tackett, Esq.,
Forum Funds, Three Canal Plaza, Suite
600, Portland, ME 04101, and Joseph
Halpern, Exceed Advisory LLC, 28 West
44th Street, 16th Floor, New York, NY
10036.
FOR FURTHER INFORMATION CONTACT:
Courtney S. Thornton, Senior Counsel,
at (202) 551–6812, 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
mstockstill on DSK4VPTVN1PROD with NOTICES
APPLICANTS:
VerDate Sep<11>2014
18:15 Nov 10, 2015
Jkt 238001
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.
Summary of the Application
1. The Adviser serves as the
investment adviser to certain series of
the Trust (the ‘‘Series’’) pursuant to an
investment advisory agreement with the
Trust (the ‘‘Advisory Agreement’’).1 The
Adviser provides the Subadvised Series
with continuous and comprehensive
investment management services subject
to the supervision of, and policies
established by, each Subadvised Series’
board of trustees (‘‘Board’’). The
Advisory Agreement permits the
Adviser, subject to the approval of the
Board, to delegate to one or more SubAdvisers the responsibility to provide
the day-to-day portfolio investment
management for all or a portion of the
assets of each Subadvised Series, subject
to the supervision and direction of the
Adviser.2 The Adviser will continue to
have overall responsibility for the
management and investment of the
assets of each Subadvised Series. The
Adviser will hire, evaluate, allocate
assets to and oversee the Sub-Advisers,
including determining whether a SubAdviser should be terminated, at all
times subject to the authority of the
Board.
2. Applicants request an exemption to
permit the Adviser, subject to Board
approval, to hire Sub-Advisers pursuant
to investment sub-advisory agreements
1 Applicants request relief with respect to the
named Applicants, any future Series of the Trust
and any other registered open-end management
company or series thereof that intends to rely on the
requested order in the future and that: (a) Is advised
by the Adviser or its successor or by any entity
controlling, controlled by, or under common
control with the Adviser or its successor (included
in the term ‘‘Adviser’’); (b) uses the multi-manager
structure described in the application; and (c)
complies with the terms and conditions of the
application (each, a ‘‘Subadvised Series’’). For
purposes of the requested order, ‘‘successor’’ is
limited to an entity that results from a
reorganization into another jurisdiction or a change
in the type of business organization.
2 A ‘‘Sub-Adviser’’ for a Series is (1) an indirect
or direct ‘‘wholly owned subsidiary’’ (as such term
is defined in section 2(a)(43) the Act) of the Adviser
for that Series, or (2) a sister company of the
Adviser for that Series that is an indirect or direct
wholly owned subsidiary of the same company that,
indirectly or directly, wholly owns the Adviser
(each of (1) and (2) a ‘‘Wholly-Owned Sub-Adviser’’
and collectively, the ‘‘Wholly-Owned SubAdvisers’’), or (3) an investment sub-adviser for that
Series that is not an ‘‘affiliated person’’ (as such
term is defined in section 2(a)(3) of the Act) of the
Series or the Adviser, except to the extent that an
affiliation arises solely because the sub-adviser
serves as a sub-adviser to one or more Series (each
a ‘‘Non-Affiliated Sub-Adviser’’ and collectively,
the ‘‘Non-Affiliated Sub-Advisers’’).
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
(‘‘Sub-Advisory Agreements’’) and
materially amend existing Sub-Advisory
Agreements without obtaining the
shareholder approval required under
section 15(a) of the Act and rule 18f–2
under the Act.3 Applicants also seek an
exemption from the Disclosure
Requirements to permit a Subadvised
Series to disclose (as both a dollar
amount and a percentage of the
Subadvised Series’ net assets): (a) The
aggregate fees paid to the Adviser and
any Wholly-Owned Sub-Advisers; (b)
the aggregate fees paid to Non-Affiliated
Sub-Advisers; and (c) the fee paid to
each Affiliated Sub-Adviser
(collectively, ‘‘Aggregate Fee
Disclosure’’).
3. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the application. Such terms
and conditions provide for, among other
safeguards, appropriate disclosure to
Subadvised Series’ shareholders and
notification about sub-advisory changes
and enhanced Board oversight to protect
the interests of the Subadvised Series’
shareholders.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction or any
class or classes of persons, securities, or
transactions from any provisions of the
Act, or any rule thereunder, if such
relief is necessary or appropriate in the
public interest and consistent with the
protection of investors and purposes
fairly intended by the policy and
provisions of the Act. Applicants
believe that the requested relief meets
this standard because, as further
explained in the application, the
Advisory Agreements will remain
subject to shareholder approval, while
the role of the Sub-Advisers is
substantially equivalent to that of
individual portfolio managers, so that
requiring shareholder approval of SubAdvisory Agreements would impose
unnecessary delays and expenses on the
Subadvised Series. Applicants believe
that the requested relief from the
Disclosure Requirements meets this
standard because it will improve the
Adviser’s ability to negotiate fees paid
to the Sub-Advisers that are more
advantageous for the Subadvised Series.
3 The requested relief will not extend to any subadviser, other than a Wholly-Owned Sub-Adviser,
who is an affiliated person, as defined in section
2(a)(3) of the Act, of the Subadvised Series or the
Adviser, other than by reason of serving as a subadviser to one or more of the Subadvised Series
(‘‘Affiliated Sub-Adviser’’).
E:\FR\FM\12NON1.SGM
12NON1
Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
these services. The text of the proposed
rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
[FR Doc. 2015–28694 Filed 11–10–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76374; File No. SR–NYSE–
2015–52]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change to the
Co-Location Services Offered by the
Exchange (the Offering of a Wireless
Connection To Allow Users To Receive
Market Data Feeds From Third Party
Markets) and To Reflect Changes to
the Exchange’s Price List Related to
These Services
November 5, 2015.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on October
23, 2015, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. 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 change the
co-location services offered by the
Exchange to include a means for colocated Users to receive market data
feeds from third party markets through
a wireless connection. In addition, the
proposed rule change reflects changes to
the Exchange’s Price List related to
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 The Exchange initially filed rule changes
relating to its co-location services with the
Securities and Exchange Commission
(‘‘Commission’’) in 2010. See Securities Exchange
Act Release No. 62960 (September 21, 2010), 75 FR
59310 (September 27, 2010) (SR–NYSE–2010–56).
The Exchange operates a data center in Mahwah,
New Jersey (the ‘‘data center’’) from which it
provides co-location services to Users.
5 For purposes of the Exchange’s co-location
services, a ‘‘User’’ means any market participant
that requests to receive co-location services directly
mstockstill on DSK4VPTVN1PROD with NOTICES
2 15
VerDate Sep<11>2014
18:15 Nov 10, 2015
Jkt 238001
70021
1. Purpose
The Exchange proposes to change the
co-location 4 services offered by the
Exchange to include a means for Users
to receive market data feeds from third
party markets (the ‘‘Third Party Data’’)
through a wireless connection.5 In
addition, this proposed rule change
reflects changes to the Exchange’s Price
List related to these co-location services.
The Exchange proposes to offer the
wireless connection to provide Users
with an alternative means of
connectivity for Third Party Data.
Wireless connections involve beaming
signals through the air between
antennas that are within sight of one
another. Because the signals travel a
straight, unimpeded line, and because
light waves travel faster through air than
through glass (fiber optics), wireless
messages have lower latency than
messages travelling through fiber optics.
Under the proposed rule change, the
Exchange would utilize a network
vendor to provide a wireless connection
to the Third Party Data through wireless
connections from the Exchange access
centers in Secaucus and Carteret, New
Jersey, to its data center in Mahwah,
New Jersey, through a series of towers
equipped with wireless equipment.6
The wireless connectivity would be an
optional offering, offering an alternative
method for connectivity to the Third
Party Data.
A User that chooses this optional
service would be able to receive data
feeds from NASDAQ and BATS
Exchange, Inc. over a wireless
connection. To receive Third Party Data,
the User would enter into a contract
with the relevant third party market,
which would charge the User the
applicable market data fees for the Third
Party Data. The Exchange would charge
the User fees for the wireless connection
for the Third Party Data.7
A User would be charged a $5,000
non-recurring initial charge for each
wireless connection and a monthly
recurring charge (‘‘MRC’’) that would
vary depending upon the feed that the
User opts to receive. If a User purchased
two wireless connections, it would pay
two non-recurring initial charges. The
Exchange proposes to waive the first
month’s MRC, to allow Users to test the
receipt of the feed(s) for a month before
incurring any MRCs.
The Exchange proposes that the
wireless connections would include the
use of one port for connectivity to the
Third Party Data. A User will only
require one port to connect to the Third
Party Data, irrespective of how many of
the five wireless connections it orders.
If a User that has more than one wireless
connection wishes to use more than one
port to connect to the Third Party Data,8
the Exchange proposes to make such
additional ports available for a monthly
fee per port of $3,000.
The Exchange proposes to revise its
Price List to reflect fees related to these
connections and ports, as follows:
from the Exchange. See Securities Exchange Act
Release No. 76008 (September 29, 2015), 80 FR
60190 (October 5, 2015) (SR–NYSE–2015–40). As
specified in the Price List, a User that incurs colocation fees for a particular co-location service
pursuant thereto would not be subject to co-location
fees for the same co-location service charged by the
Exchange’s affiliates NYSE MKT LLC and NYSE
Arca, Inc. See Securities Exchange Act Release No.
70206 (August 15, 2013), 78 FR 51765 (August 21,
2013) (SR–NYSE–2013–59).
6 The NASDAQ Stock Market LLC (‘‘NASDAQ’’)
offers a similar wireless service. See Securities
Exchange Act Release No. 68735 (January 25, 2013),
78 FR 6842 (January 31, 2013) (SR–NASDAQ–2012–
119) (approving a proposed rule change to establish
a new optional wireless connectivity for collocated
clients).
7 A User would only receive the Third Party Data
for which it had entered into a contract. For
example, a User that contracted with NASDAQ for
the NASDAQ Totalview-ITCH data feed but did not
contract to receive any other Third Party Data
would receive only the NASDAQ Totalview-ITCH
data feed through its wireless connection.
8 For example, a User with two wireless
connections for Third Party Data may opt to
purchase an additional port in order to route the
options and equity data it receives to different
cabinets.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization's
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
E:\FR\FM\12NON1.SGM
12NON1
]]>Agencies
[Federal Register Volume 80, Number 218 (Thursday, November 12, 2015)]
[Notices]
[Pages 70019-70021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28694]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 31893; 812-14531]
Forum Funds and Exceed Advisory LLC; Notice of Application
November 5, 2015.
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 in rule 20a-1 under the Act, Item 19(a)(3) of
[[Page 70020]]
Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
Schedule 14A under the Securities Exchange Act of 1934, and Sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements'').
The requested exemption would permit an investment adviser to hire and
replace certain sub-advisers without shareholder approval and grant
relief from the Disclosure Requirements as they relate to fees paid to
the sub-advisers.
-----------------------------------------------------------------------
Applicants: Forum Funds (the ``Trust''), a Delaware statutory trust
registered under the Act as an open-end management investment company
with multiple series, and Exceed Advisory LLC (the ``Adviser''), a
Delaware limited liability company registered as an investment adviser
under the Investment Advisers Act of 1940 (together, the Trust and
Adviser are ``Applicants'').
Filing Dates: The application was filed on August 11, 2015, and
amended on October 8, 2015.
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 November 30, 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: Zachary R. Tackett,
Esq., Forum Funds, Three Canal Plaza, Suite 600, Portland, ME 04101,
and Joseph Halpern, Exceed Advisory LLC, 28 West 44th Street, 16th
Floor, New York, NY 10036.
FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel,
at (202) 551-6812, 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.
Summary of the Application
1. The Adviser serves as the investment adviser to certain series
of the Trust (the ``Series'') pursuant to an investment advisory
agreement with the Trust (the ``Advisory Agreement'').\1\ The Adviser
provides the Subadvised Series with continuous and comprehensive
investment management services subject to the supervision of, and
policies established by, each Subadvised Series' board of trustees
(``Board''). The Advisory Agreement permits the Adviser, subject to the
approval of the Board, to delegate to one or more Sub-Advisers the
responsibility to provide the day-to-day portfolio investment
management for all or a portion of the assets of each Subadvised
Series, subject to the supervision and direction of the Adviser.\2\ The
Adviser will continue to have overall responsibility for the management
and investment of the assets of each Subadvised Series. The Adviser
will hire, evaluate, allocate assets to and oversee the Sub-Advisers,
including determining whether a Sub-Adviser should be terminated, at
all times subject to the authority of the Board.
---------------------------------------------------------------------------
\1\ Applicants request relief with respect to the named
Applicants, any future Series of the Trust and any other registered
open-end management company or series thereof that intends to rely
on the requested order in the future and that: (a) Is advised by the
Adviser or its successor or by any entity controlling, controlled
by, or under common control with the Adviser or its successor
(included in the term ``Adviser''); (b) uses the multi-manager
structure described in the application; and (c) complies with the
terms and conditions of the application (each, a ``Subadvised
Series''). For purposes of the requested order, ``successor'' is
limited to an entity that results from a reorganization into another
jurisdiction or a change in the type of business organization.
\2\ A ``Sub-Adviser'' for a Series is (1) an indirect or direct
``wholly owned subsidiary'' (as such term is defined in section
2(a)(43) the Act) of the Adviser for that Series, or (2) a sister
company of the Adviser for that Series that is an indirect or direct
wholly owned subsidiary of the same company that, indirectly or
directly, wholly owns the Adviser (each of (1) and (2) a ``Wholly-
Owned Sub-Adviser'' and collectively, the ``Wholly-Owned Sub-
Advisers''), or (3) an investment sub-adviser for that Series that
is not an ``affiliated person'' (as such term is defined in section
2(a)(3) of the Act) of the Series or the Adviser, except to the
extent that an affiliation arises solely because the sub-adviser
serves as a sub-adviser to one or more Series (each a ``Non-
Affiliated Sub-Adviser'' and collectively, the ``Non-Affiliated Sub-
Advisers'').
---------------------------------------------------------------------------
2. Applicants request an exemption to permit the Adviser, subject
to Board approval, to hire Sub-Advisers pursuant to investment sub-
advisory agreements (``Sub-Advisory Agreements'') and materially amend
existing Sub-Advisory Agreements without obtaining the shareholder
approval required under section 15(a) of the Act and rule 18f-2 under
the Act.\3\ Applicants also seek an exemption from the Disclosure
Requirements to permit a Subadvised Series to disclose (as both a
dollar amount and a percentage of the Subadvised Series' net assets):
(a) The aggregate fees paid to the Adviser and any Wholly-Owned Sub-
Advisers; (b) the aggregate fees paid to Non-Affiliated Sub-Advisers;
and (c) the fee paid to each Affiliated Sub-Adviser (collectively,
``Aggregate Fee Disclosure'').
---------------------------------------------------------------------------
\3\ The requested relief will not extend to any sub-adviser,
other than a Wholly-Owned Sub-Adviser, who is an affiliated person,
as defined in section 2(a)(3) of the Act, of the Subadvised Series
or the Adviser, other than by reason of serving as a sub-adviser to
one or more of the Subadvised Series (``Affiliated Sub-Adviser'').
---------------------------------------------------------------------------
3. Applicants agree that any order granting the requested relief
will be subject to the terms and conditions stated in the application.
Such terms and conditions provide for, among other safeguards,
appropriate disclosure to Subadvised Series' shareholders and
notification about sub-advisory changes and enhanced Board oversight to
protect the interests of the Subadvised Series' shareholders.
4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction or any class or classes of
persons, securities, or transactions from any provisions of the Act, or
any rule thereunder, if such relief is necessary or appropriate in the
public interest and consistent with the protection of investors and
purposes fairly intended by the policy and provisions of the Act.
Applicants believe that the requested relief meets this standard
because, as further explained in the application, the Advisory
Agreements will remain subject to shareholder approval, while the role
of the Sub-Advisers is substantially equivalent to that of individual
portfolio managers, so that requiring shareholder approval of Sub-
Advisory Agreements would impose unnecessary delays and expenses on the
Subadvised Series. Applicants believe that the requested relief from
the Disclosure Requirements meets this standard because it will improve
the Adviser's ability to negotiate fees paid to the Sub-Advisers that
are more advantageous for the Subadvised Series.
[[Page 70021]]
For the Commission, by the Division of Investment Management,
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28694 Filed 11-10-15; 8:45 am]
BILLING CODE 8011-01-P
