Harris Associates Investment Trust, et al.; Notice of Application, 70467-70468 [2016-24568]
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Federal Register / Vol. 81, No. 197 / Wednesday, October 12, 2016 / Notices
should refer to File Number SR–FINRA–
2016–037, and should be submitted on
or before November 2, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Dated: October 5, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016–24575 Filed 10–11–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32306; File No. 812–14609]
Harris Associates Investment Trust, et
al.; Notice of Application
October 5, 2016.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order pursuant to: (a) Section 6(c) of the
Investment Company Act of 1940
(‘‘Act’’) granting an exemption from
sections 18(f) and 21(b) of the Act; (b)
section 12(d)(1)(J) of the Act granting an
exemption from section 12(d)(1) of the
Act; (c) sections 6(c) and 17(b) of the
Act granting an exemption from sections
17(a)(1), 17(a)(2) and 17(a)(3) of the Act;
and (d) section 17(d) of the Act and rule
17d–1 under the Act to permit certain
joint arrangements and transactions.
Applicants request an order that would
permit certain registered open-end
management investment companies to
participate in a joint lending and
borrowing facility.
AGENCY:
Harris Associates
Investment Trust (the ‘‘Trust’’), a
Massachusetts business trust registered
under the Act as an open-end
management investment company with
multiple series and Harris Associates
L.P. (the ‘‘Adviser’’), a Delaware limited
partnership registered as an investment
adviser under the Investment Advisers
Act of 1940.
FILING DATES: The application was filed
on February 8, 2016 and amended on
June 21, 2016.
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 31, 2016 and
mstockstill on DSK3G9T082PROD with NOTICES
APPLICANTS:
26 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:13 Oct 11, 2016
Jkt 241001
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: 111 S. Wacker Drive, Suite
4600, Chicago, Illinois 60606–4319.
FOR FURTHER INFORMATION CONTACT:
Emerson S. Davis, Senior Counsel, at
(202) 551–6868 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.
Summary of the Application
1. Applicants request an order that
would permit the applicants to
participate in an interfund lending
facility where each Fund could lend
money directly to and borrow money
directly from other Funds to cover
unanticipated cash shortfalls, such as
unanticipated redemptions or trade
fails.1 The Funds will not borrow under
the facility for leverage purposes and
the loans’ duration will be no more than
7 days.2
2. Applicants anticipate that the
proposed facility would provide a
borrowing Fund with a source of
liquidity at a rate lower than the bank
borrowing rate at times when the cash
position of the Fund is insufficient to
1 Applicants request that the order apply to the
applicants and to any existing or future registered
open-end management investment company or
series thereof for which the Adviser or any
successor thereto or an investment adviser
controlling, controlled by, or under common
control with the Adviser or any successor thereto
serves as investment adviser (each a ‘‘Fund’’ and
collectively the ‘‘Funds’’ and each such investment
adviser an ‘‘Adviser’’). For purposes of the
requested order, ‘‘successor’’ is limited to any entity
that results from a reorganization into another
jurisdiction or a change in the type of a business
organization. Applicants are not requesting that the
order also apply, and the order will not apply, to
any fund or series that is a money market fund that
complies with Rule 2a–7 under the Act.
2 Any Fund, however, will be able to call a loan
on one business day’s notice.
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
70467
meet temporary cash requirements. In
addition, Funds making short-term cash
loans directly to other Funds would
earn interest at a rate higher than they
otherwise could obtain from investing
their cash in repurchase agreements or
certain other short term money market
instruments. Thus, applicants assert that
the facility would benefit both
borrowing and lending Funds.
3. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the Application. Among
others, the Adviser, through a
designated committee, would
administer the facility as a disinterested
fiduciary as part of its duties under the
investment management agreements
with the Funds and would receive no
additional fee as compensation for its
services in connection with the
administration of the facility. The
facility would be subject to oversight
and certain approvals by the Funds’
Board, including, among others,
approval of the interest rate formula and
of the method for allocating loans across
Funds, as well as review of the process
in place to evaluate the liquidity
implications for the Funds. A Fund’s
aggregate outstanding interfund loans
will not exceed 15% of its net assets,
and the Fund’s loans to any one Fund
will not exceed 5% of the lending
Fund’s net assets.3
4. Applicants assert that the facility
does not raise the concerns underlying
section 12(d)(1) of the Act given that the
Funds are part of the same group of
investment companies and there will be
no duplicative costs or fees to the
Funds.4 Applicants also assert that the
proposed transactions do not raise the
concerns underlying sections 17(a)(1),
17(a)(3), 17(d) and 21(b) of the Act as
the Funds would not engage in lending
transactions that unfairly benefit
insiders or are detrimental to the Funds.
Applicants state that the facility will
offer both reduced borrowing costs and
enhanced returns on loaned funds to all
participating Funds and each Fund
would have an equal opportunity to
borrow and lend on equal terms based
on an interest rate formula that is
objective and verifiable. With respect to
the relief from section 17(a)(2) of the
Act, applicants note that any collateral
pledged to secure an interfund loan
would be subject to the same conditions
imposed by any other lender to a Fund
3 Under certain circumstances, a borrowing Fund
will be required to pledge collateral to secure the
loan.
4 Applicants state that the obligation to repay an
interfund loan could be deemed to constitute a
security for the purposes of sections 17(a)(1) and
12(d)(1) of the Act.
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12OCN1
mstockstill on DSK3G9T082PROD with NOTICES
70468
Federal Register / Vol. 81, No. 197 / Wednesday, October 12, 2016 / Notices
that imposes conditions on the quality
of or access to collateral for a borrowing
(if the lender is another Fund) or the
same or better conditions (in any other
circumstance).5
5. Applicants also believe that the
limited relief from section 18(f)(1) of the
Act that is necessary to implement the
facility (because the lending Funds are
not banks) is appropriate in light of the
conditions and safeguards described in
the application and because the Funds
would remain subject to the
requirement of section 18(f)(1) that all
borrowings of a Fund, including
combined interfund loans and bank
borrowings, have at least 300% asset
coverage.
6. Section 6(c) of the Act permits the
Commission to exempt any persons or
transactions from any provision of the
Act 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. Section 12(d)(1)(J) 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 section 12(d)(1) if the
exemption is consistent with the public
interest and the protection of investors.
Section 17(b) of the Act authorizes the
Commission to grant an order
permitting a transaction otherwise
prohibited by section 17(a) if it finds
that (a) the terms of the proposed
transaction are fair and reasonable and
do not involve overreaching on the part
of any person concerned; (b) the
proposed transaction is consistent with
the policies of each registered
investment company involved; and (c)
the proposed transaction is consistent
with the general purposes of the Act.
Rule 17d–1(b) under the Act provides
that in passing upon an application filed
under the rule, the Commission will
consider whether the participation of
the registered investment company in a
joint enterprise, joint arrangement or
profit sharing plan on the basis
proposed is consistent with the
provisions, policies and purposes of the
Act and the extent to which such
participation is on a basis different from
or less advantageous than that of the
other participants.
5 Applicants state that any pledge of securities to
secure an interfund loan could constitute a
purchase of securities for purposes of section
17(a)(2) of the Act.
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20:13 Oct 11, 2016
Jkt 241001
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–24568 Filed 10–11–16; 8:45 am]
BILLING CODE 8011–01–P
October 4, 2016, the Exchange filed
Amendment No. 3 to the proposed rule
change.7 The Commission received no
comments on the proposed rule change.
This order grants approval of the
proposed rule change, as modified by
Amendment Nos. 1, 2, and 3.
II. Description of the Proposal
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79053; File No. SR–
BatsBZX–2016–35]
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Order Granting
Approval of a Proposed Rule Change,
as Modified by Amendment Nos. 1, 2,
and 3, To List and Trade Shares of the
JPMorgan Global Bond Opportunities
ETF of the J.P. Morgan ExchangeTraded Fund Trust Under BZX Rule
14.11(i), Managed Fund Shares
October 5, 2016.
I. Introduction
On July 1, 2015, Bats BZX Exchange,
Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) 1 of the Securities
Exchange Act of 1934 (‘‘Act’’) 2 and Rule
19b–4 thereunder,3 a proposed rule
change to list and trade shares
(‘‘Shares’’) of the JPMorgan Global Bond
Opportunities ETF (‘‘Fund’’) of the J.P.
Morgan Exchange-Traded Fund Trust
(‘‘Trust’’) under BZX Rule 14.11(i). The
proposed rule change was published for
comment in the Federal Register on July
14, 2016.4 On August 18, 2016, the
Commission extended the time period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change to
October 12, 2016.5 On August 30, 2016,
the Exchange filed Amendment No. 1 to
the proposed rule change. On October 3,
2016, the Exchange filed Amendment
No. 2 to the proposed rule change.6 On
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 78264
(July 8, 2016), 81 FR 45546 (‘‘Notice’’).
5 See Securities Exchange Act Release No. 78613
(August 18, 2016), 81 FR 57967 (August 24, 2016).
6 Amendment No. 2 replaced Amendment No. 1,
which amended and replaced the original filing in
its entirety. In Amendment No. 2, the Exchange: (1)
clarified the Fund’s investments in instruments that
provide exposure to countries other than the U.S.;
(2) added the defined terms ‘‘Bonds’’ and ‘‘NonBonds’’ to describe and clarify some of the Fund’s
investments; (3) provided additional detail
regarding restrictions on the Fund’s investments in
non-agency asset-backed securities; (4) clarified
restrictions on the Fund’s investments in municipal
2 15
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
The Exchange proposes to list and
trade the Shares under BZX Rule
14.11(i), which governs the listing and
trading of Managed Fund Shares on the
Exchange. The Shares will be offered by
the Trust. According to the Exchange,
the Trust is registered with the
Commission as an open-end investment
company and has filed a registration
statement with respect to the Fund on
Form N–1A (‘‘Registration Statement’’)
with the Commission.8
J.P. Morgan Investment Management
Inc. will be the investment adviser
(‘‘Adviser’’) to the Fund. The Adviser
will serve as the administrator for the
Fund. SEI Investments Distribution Co.
serves as the distributor for the Trust.
JPMorgan Chase Bank, N.A. will act as
the custodian and transfer agent for the
Trust. The Exchange states that the
Adviser is not registered as a brokerdealer but that the Adviser is affiliated
with a broker-dealer and has
implemented a ‘‘fire wall’’ with respect
to such broker-dealer regarding access to
securities; (5) provided additional clarity regarding
the definition of private placements, restricted
securities, and unregistered securities, as well as
restrictions on such holdings; (6) provided
additional description of restrictions on the Fund’s
structured investments; (7) provided additional
clarification regarding the types of derivatives and
foreign currency transactions in which the Fund
may invest; (8) provided additional detail regarding
the Fund’s coverage of options; (9) provided
additional detail regarding the commodity-related
pooled investment vehicles that the Fund may hold;
and (10) provided additional clarification regarding
the Fund’s valuation of convertible securities,
warrants and rights, and custodial receipts. Because
the changes in Amendment No. 2 to the proposed
rule change clarify certain statements in the
proposal and do not materially alter the substance
of the proposed rule change or raise any novel
regulatory issues, it is not subject to notice and
comment.
7 In Amendment No. 3, which partially amended
Amendment No. 2 to the proposed rule change, the
Exchange: (i) Added a citation to a Commission
Order in support of proposed restrictions on the
Fund’s investments in municipal securities; and (ii)
consolidated footnotes into a single footnote.
Amendment No. 3 is not subject to notice and
comment because it is a technical amendment that
does not materially alter the substance of the
proposed rule change or raise any novel regulatory
issues.
8 See Registration Statement on Form N–1A for
the Trust, dated May 26, 2016 (File Nos. 333–
191837 and 811–22903). The Exchange states that
the Commission has issued an order granting
certain exemptive relief to the Trust under the
Investment Company Act of 1940 (‘‘1940 Act’’). See
Investment Company Act Release No. 31990
(February 9, 2016) (File No. 812–13761).
E:\FR\FM\12OCN1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 197 (Wednesday, October 12, 2016)]
[Notices]
[Pages 70467-70468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24568]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32306; File No. 812-14609]
Harris Associates Investment Trust, et al.; Notice of Application
October 5, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').
Action: Notice of an application for an order pursuant to: (a) Section
6(c) of the Investment Company Act of 1940 (``Act'') granting an
exemption from sections 18(f) and 21(b) of the Act; (b) section
12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of
the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption
from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d)
section 17(d) of the Act and rule 17d-1 under the Act to permit certain
joint arrangements and transactions. Applicants request an order that
would permit certain registered open-end management investment
companies to participate in a joint lending and borrowing facility.
-----------------------------------------------------------------------
Applicants: Harris Associates Investment Trust (the ``Trust''), a
Massachusetts business trust registered under the Act as an open-end
management investment company with multiple series and Harris
Associates L.P. (the ``Adviser''), a Delaware limited partnership
registered as an investment adviser under the Investment Advisers Act
of 1940.
Filing Dates: The application was filed on February 8, 2016 and
amended on June 21, 2016.
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 31, 2016 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: 111 S. Wacker Drive,
Suite 4600, Chicago, Illinois 60606-4319.
For Further Information Contact: Emerson S. Davis, Senior Counsel, at
(202) 551-6868 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.
Summary of the Application
1. Applicants request an order that would permit the applicants to
participate in an interfund lending facility where each Fund could lend
money directly to and borrow money directly from other Funds to cover
unanticipated cash shortfalls, such as unanticipated redemptions or
trade fails.\1\ The Funds will not borrow under the facility for
leverage purposes and the loans' duration will be no more than 7
days.\2\
---------------------------------------------------------------------------
\1\ Applicants request that the order apply to the applicants
and to any existing or future registered open-end management
investment company or series thereof for which the Adviser or any
successor thereto or an investment adviser controlling, controlled
by, or under common control with the Adviser or any successor
thereto serves as investment adviser (each a ``Fund'' and
collectively the ``Funds'' and each such investment adviser an
``Adviser''). For purposes of the requested order, ``successor'' is
limited to any entity that results from a reorganization into
another jurisdiction or a change in the type of a business
organization. Applicants are not requesting that the order also
apply, and the order will not apply, to any fund or series that is a
money market fund that complies with Rule 2a-7 under the Act.
\2\ Any Fund, however, will be able to call a loan on one
business day's notice.
---------------------------------------------------------------------------
2. Applicants anticipate that the proposed facility would provide a
borrowing Fund with a source of liquidity at a rate lower than the bank
borrowing rate at times when the cash position of the Fund is
insufficient to meet temporary cash requirements. In addition, Funds
making short-term cash loans directly to other Funds would earn
interest at a rate higher than they otherwise could obtain from
investing their cash in repurchase agreements or certain other short
term money market instruments. Thus, applicants assert that the
facility would benefit both borrowing and lending Funds.
3. Applicants agree that any order granting the requested relief
will be subject to the terms and conditions stated in the Application.
Among others, the Adviser, through a designated committee, would
administer the facility as a disinterested fiduciary as part of its
duties under the investment management agreements with the Funds and
would receive no additional fee as compensation for its services in
connection with the administration of the facility. The facility would
be subject to oversight and certain approvals by the Funds' Board,
including, among others, approval of the interest rate formula and of
the method for allocating loans across Funds, as well as review of the
process in place to evaluate the liquidity implications for the Funds.
A Fund's aggregate outstanding interfund loans will not exceed 15% of
its net assets, and the Fund's loans to any one Fund will not exceed 5%
of the lending Fund's net assets.\3\
---------------------------------------------------------------------------
\3\ Under certain circumstances, a borrowing Fund will be
required to pledge collateral to secure the loan.
---------------------------------------------------------------------------
4. Applicants assert that the facility does not raise the concerns
underlying section 12(d)(1) of the Act given that the Funds are part of
the same group of investment companies and there will be no duplicative
costs or fees to the Funds.\4\ Applicants also assert that the proposed
transactions do not raise the concerns underlying sections 17(a)(1),
17(a)(3), 17(d) and 21(b) of the Act as the Funds would not engage in
lending transactions that unfairly benefit insiders or are detrimental
to the Funds. Applicants state that the facility will offer both
reduced borrowing costs and enhanced returns on loaned funds to all
participating Funds and each Fund would have an equal opportunity to
borrow and lend on equal terms based on an interest rate formula that
is objective and verifiable. With respect to the relief from section
17(a)(2) of the Act, applicants note that any collateral pledged to
secure an interfund loan would be subject to the same conditions
imposed by any other lender to a Fund
[[Page 70468]]
that imposes conditions on the quality of or access to collateral for a
borrowing (if the lender is another Fund) or the same or better
conditions (in any other circumstance).\5\
---------------------------------------------------------------------------
\4\ Applicants state that the obligation to repay an interfund
loan could be deemed to constitute a security for the purposes of
sections 17(a)(1) and 12(d)(1) of the Act.
\5\ Applicants state that any pledge of securities to secure an
interfund loan could constitute a purchase of securities for
purposes of section 17(a)(2) of the Act.
---------------------------------------------------------------------------
5. Applicants also believe that the limited relief from section
18(f)(1) of the Act that is necessary to implement the facility
(because the lending Funds are not banks) is appropriate in light of
the conditions and safeguards described in the application and because
the Funds would remain subject to the requirement of section 18(f)(1)
that all borrowings of a Fund, including combined interfund loans and
bank borrowings, have at least 300% asset coverage.
6. Section 6(c) of the Act permits the Commission to exempt any
persons or transactions from any provision of the Act 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. Section 12(d)(1)(J) 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 section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.
Section 17(b) of the Act authorizes the Commission to grant an order
permitting a transaction otherwise prohibited by section 17(a) if it
finds that (a) the terms of the proposed transaction are fair and
reasonable and do not involve overreaching on the part of any person
concerned; (b) the proposed transaction is consistent with the policies
of each registered investment company involved; and (c) the proposed
transaction is consistent with the general purposes of the Act. Rule
17d-1(b) under the Act provides that in passing upon an application
filed under the rule, the Commission will consider whether the
participation of the registered investment company in a joint
enterprise, joint arrangement or profit sharing plan on the basis
proposed is consistent with the provisions, policies and purposes of
the Act and the extent to which such participation is on a basis
different from or less advantageous than that of the other
participants.
For the Commission, by the Division of Investment Management,
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24568 Filed 10-11-16; 8:45 am]
BILLING CODE 8011-01-P
