Virtus Alternative Solutions Trust, et al.; Notice of Application, 95690-95691 [2016-31288]

Download as PDF 95690 Federal Register / Vol. 81, No. 249 / Wednesday, December 28, 2016 / Notices the amounts they invested or committed, as the case may be, in such Co-Investment Transaction. If any transaction fee is to be held by an Adviser pending consummation of the transaction, the fee will be deposited into an account maintained by the Adviser at a bank or banks having the qualifications prescribed in Section 26(a)(1), and the account will earn a competitive rate of interest that will also be divided pro rata among the participants. None of the Advisers, the Affiliated Funds, the other Regulated Funds or any affiliated person of the Affiliated Funds or the Regulated Funds will receive any additional compensation or remuneration of any kind as a result of or in connection with a Co-Investment Transaction other than (i) in the case of the Regulated Funds and the Affiliated Funds, the pro rata transaction fees described above and fees or other compensation described in Condition 2(c)(iii)(B)(z), (ii) brokerage or underwriting compensation permitted by Section 17(e) or 57(k) or (iii) in the case of the Advisers, investment advisory compensation paid in accordance with investment advisory agreements between the applicable Regulated Fund(s) or Affiliated Fund(s) and its Adviser. 15. If the Holders own in the aggregate more than 25 percent of the Shares of a Regulated Fund, then the Holders will vote such Shares as directed by an independent third party when voting on (1) the election of directors; (2) the removal of one or more directors; or (3) any other matter under either the Act or applicable State law affecting the Board’s composition, size or manner of election. For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–31289 Filed 12–27–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION sradovich on DSK3GMQ082PROD with NOTICES [Investment Company Act Release No. 32398; File No. 812–14603] Virtus Alternative Solutions Trust, et al.; Notice of Application December 21, 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 AGENCY: VerDate Sep<11>2014 18:54 Dec 27, 2016 Jkt 241001 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. 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 http:// 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 Applicants: Virtus Alternative fails.1 The Funds will not borrow under Solutions Trust, Virtus Equity Trust, the facility for leverage purposes and Virtus Opportunities Trust, Virtus the loans’ duration will be no more than Retirement Trust, and Virtus Variable 7 days.2 Insurance Trust (the ‘‘Trusts’’), 2. Applicants anticipate that the registered under the Act as open-end proposed facility would provide a management investment companies borrowing Fund with a source of with one or more series, and Virtus liquidity at a rate lower than the bank Alternative Investment Advisers, Inc. borrowing rate at times when the cash (‘‘VAIA’’), Virtus Investment Advisers, position of the Fund is insufficient to Inc. (‘‘VIA’’), and Virtus Retirement meet temporary cash requirements. In Investment Advisers, LLC (‘‘VRIA’’), addition, Funds making short-term cash registered as investment advisers under loans directly to other Funds would the Investment Advisers Act of 1940. earn interest at a rate higher than they Filing Dates: The application was filed on January 15, 2016, and amended otherwise could obtain from investing their cash in repurchase agreements or on June 23, 2016 and October 3, 2016. Hearing or Notification of Hearing: An certain other short term money market instruments. Thus, applicants assert that order granting the requested relief will be issued unless the Commission orders the facility would benefit both borrowing and lending Funds. a hearing. Interested persons may 3. Applicants agree that any order request a hearing by writing to the granting the requested relief will be Commission’s Secretary and serving subject to the terms and conditions applicants with a copy of the request, stated in the application. Among others, personally or by mail. the Advisers, through a designated Hearing requests should be received committee, would administer the by the Commission by 5:30 p.m. on facility as a disinterested fiduciary as January 17, 2017 and should be part of its duties under the investment accompanied by proof of service on the management and administrative applicants, in the form of an affidavit, agreements with the Funds and would or, for lawyers, a certificate of service. receive no additional fee as Pursuant to Rule 0–5 under the Act, hearing requests should state the nature compensation for its services in of the writer’s interest, any facts bearing connection with the administration of upon the desirability of a hearing on the the facility. The facility would be matter, the reason for the request, and 1 Applicants request that the order apply to the the issues contested. Persons who wish Trusts and any existing or future series thereof to be notified of a hearing may request (each a ‘‘Fund’’ and collectively, the ‘‘Funds’’) and notification by writing to the to any other registered open-end management investment company or its series for which VIA, Commission’s Secretary. VAIA, or VRIA and each successor thereto or a ADDRESSES: Secretary, U.S. Securities person controlling, controlled by, or under common and Exchange Commission, 100 F Street control (within the meaning of section 2(a)(9) of the Act) with VIA, VAIA, or VRIA serves as investment NE., Washington, DC, 20549–1090; adviser (each an ‘‘Adviser’’ and collectively, the Applicants: 100 Pearl Street, Hartford, ‘‘Advisers’’). Any Adviser will be registered as an CT 06103. investment adviser under the Advisers Act. All FOR FURTHER INFORMATION CONTACT: Hae- Funds that currently intend to rely on the requested order have been named as applicants and any other Sung Lee, Attorney-Adviser, at (202) Fund that relies on the requested order in the future 551–7345 or Mary Kay Frech, Branch will comply with the terms and conditions of the Chief, at (202) 551–6821 (Division of application. A ‘‘successor’’ is defined as any entity resulting from a reorganization of either VIA, VAIA, Investment Management, Chief or VRIA into another jurisdiction or a change in the Counsel’s Office). type of business organization. SUPPLEMENTARY INFORMATION: The 2 Any Fund, however, will be able to call a loan on one business day’s notice. following is a summary of the PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1 Federal Register / Vol. 81, No. 249 / Wednesday, December 28, 2016 / Notices sradovich on DSK3GMQ082PROD with NOTICES 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 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. 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. 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. December 21, 2016. VerDate Sep<11>2014 18:54 Dec 27, 2016 Jkt 241001 For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–31288 Filed 12–27–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79651; File No. SR– NYSEMKT–2016–121] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE Amex Options Fee Schedule Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on December 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 PO 00000 Frm 00137 Fmt 4703 95691 15, 2016, NYSE MKT LLC (‘‘Exchange’’) 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 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 modify the NYSE Amex Options Fee Schedule (‘‘Fee Schedule’’). The Exchange proposes to implement the fee change effective December 15, 2016. The proposed 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. 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend Section III.C. of the Fee Schedule to exempt Binary Return Derivatives contracts (‘‘ByRDs’’) from the monthly Rights Fees assessed on Specialists, eSpecialists, Directed Order Market Markers (each a ‘‘DOMM’’). The Exchange proposes to implement these changes effective December 15, 2016. The Exchange added rules related to ByRDs in 2007 and re-launched trading in ByRDs in March 2016.4 To encourage 4 The Exchange adopted ByRDs in 2007 and plans to re-launch trading in ByRDs in March. See Securities Exchange Act Release No. 56251 (August 14, 2007), 72 FR 46523 (August 20, 2007) (SR– Amex–2004–27) (Order approving listing of Fixed Return Options (‘‘FROs’’)); see also Securities Exchange Act Release Nos. 71957 (April 16, 2014), 79 FR 22563 (April 22, 2014) (SR–NYSEMKT– 2014–06) (Order approving name change from FROs Continued Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1

Agencies

[Federal Register Volume 81, Number 249 (Wednesday, December 28, 2016)]
[Notices]
[Pages 95690-95691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31288]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32398; File No. 812-14603]


Virtus Alternative Solutions Trust, et al.; Notice of Application

December 21, 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.

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    Applicants: Virtus Alternative Solutions Trust, Virtus Equity 
Trust, Virtus Opportunities Trust, Virtus Retirement Trust, and Virtus 
Variable Insurance Trust (the ``Trusts''), registered under the Act as 
open-end management investment companies with one or more series, and 
Virtus Alternative Investment Advisers, Inc. (``VAIA''), Virtus 
Investment Advisers, Inc. (``VIA''), and Virtus Retirement Investment 
Advisers, LLC (``VRIA''), registered as investment advisers under the 
Investment Advisers Act of 1940.
    Filing Dates: The application was filed on January 15, 2016, and 
amended on June 23, 2016 and October 3, 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 January 17, 2017 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: 100 Pearl Street, 
Hartford, CT 06103.

FOR FURTHER INFORMATION CONTACT: Hae-Sung Lee, Attorney-Adviser, at 
(202) 551-7345 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 http://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\
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    \1\ Applicants request that the order apply to the Trusts and 
any existing or future series thereof (each a ``Fund'' and 
collectively, the ``Funds'') and to any other registered open-end 
management investment company or its series for which VIA, VAIA, or 
VRIA and each successor thereto or a person controlling, controlled 
by, or under common control (within the meaning of section 2(a)(9) 
of the Act) with VIA, VAIA, or VRIA serves as investment adviser 
(each an ``Adviser'' and collectively, the ``Advisers''). Any 
Adviser will be registered as an investment adviser under the 
Advisers Act. All Funds that currently intend to rely on the 
requested order have been named as applicants and any other Fund 
that relies on the requested order in the future will comply with 
the terms and conditions of the application. A ``successor'' is 
defined as any entity resulting from a reorganization of either VIA, 
VAIA, or VRIA into another jurisdiction or a change in the type of 
business organization.
    \2\ Any Fund, however, will be able to call a loan on one 
business day's notice.
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    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 Advisers, through a designated committee, would 
administer the facility as a disinterested fiduciary as part of its 
duties under the investment management and administrative 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

[[Page 95691]]

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 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. 2016-31288 Filed 12-27-16; 8:45 am]
 BILLING CODE 8011-01-P