USAA ETF Trust, et al.; Notice of Application, 12478-12480 [2017-04090]
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Federal Register / Vol. 82, No. 41 / Friday, March 3, 2017 / Notices
other forms of information technology,
e.g., permitting electronic submissions
of responses.
Analysis
Agency: Retirement Operations,
Retirement Services, Office of Personnel
Management.
Title: Application for Deferred or
Postponed Retirement: FERS.
OMB: 3206–0190.
Frequency: On occasion.
Affected Public: Individuals or
Households.
Number of Respondents: 1,964.
Estimated Time per Respondent: 60
minutes.
Total Burden Hours: 1,964 hours.
U.S. Office of Personnel Management.
Kathleen McGettigan,
Acting Director.
[FR Doc. 2017–04143 Filed 3–2–17; 8:45 am]
BILLING CODE 6325–38–P
OFFICE OF PERSONNEL
MANAGEMENT
Submission for Review: We Need
Important Information About Your
Eligibility for Social Security Disability
Benefits, RI 98–7
U.S. Office of Personnel
Management.
ACTION: Notice.
AGENCY:
The Retirement Services,
Office of Personnel Management (OPM)
offers the general public and other
Federal agencies the opportunity to
comment on an extension, without
change, of a currently approved
information collection request (ICR), We
Need Important Information About Your
Eligibility for Social Security Disability
Benefits, RI 98–7.
DATES: Comments are due by April 3,
2017.
SUMMARY:
Interested persons are
invited to submit written comments on
the proposed information collection to
Office of Information and Regulatory
Affairs, Office of Management and
Budget, 725 17th Street NW.,
Washington, DC 20503, Attention: Desk
Officer for the Office of Personnel
Management or sent by email to
oira_submission@omb.eop.gov or faxed
to (202) 395–6974.
FOR FURTHER INFORMATION CONTACT: A
copy of this ICR with applicable
supporting documentation, may be
obtained by contacting the Office of
Information and Regulatory Affairs,
Office of Management and Budget, 725
17th Street NW., Washington, DC 20503,
Attention: Desk Officer for the Office of
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ADDRESSES:
VerDate Sep<11>2014
16:42 Mar 02, 2017
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Personnel Management or sent by email
to oira_submission@omb.eop.gov or
faxed to (202) 395–6974.
SUPPLEMENTARY INFORMATION: As
required by the Paperwork Reduction
Act of 1995, (Pub. L. 104–13, 44 U.S.C.
chapter 35) as amended by the ClingerCohen Act (Pub. L. 104–106) OPM is
soliciting comments for this collection.
The information collection (OMB No.
3206–0263) was previously published in
the Federal Register on September 21,
2016 at 81 FR 64957, allowing for a 60day public comment period. No
comments were received for this
information collection. The purpose of
this notice is to allow an additional 30
days for public comments. The Office of
Management and Budget is particularly
interested in comments that:
1. Evaluate whether the proposed
collection of information is necessary
for the proper performance of functions
of OPM, including whether the
information will have practical utility;
2. Evaluate the accuracy of OPM’s
estimate of the burden of the proposed
collection of information, including the
validity of the methodology and
assumptions used;
3. Enhance the quality, utility, and
clarity of the information to be
collected; and
4. Minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submissions
of responses.
Form RI 98–7 is used by OPM to
verify receipt of Social Security
Administration (SSA) disability
benefits, to lessen or avoid overpayment
to Federal Employees Retirement
System (FERS) disability retirees. It
notifies the annuitant of the
responsibility to notify OPM if SSA
awards disability benefits and the
subsequent overpayment that will occur
with the receipt of both benefits.
Analysis
Agency: Retirement Operations,
Retirement Services, Office of Personnel
Management.
Title: We Need Important Information
about Your Eligibility for Social
Security Disability Benefits.
OMB Number: 3206–0216.
Frequency: On occasion.
Affected Public: Individuals or
Households.
Number of Respondents: 4,300.
Estimated Time per Respondent: 5
minutes.
Total Burden Hours: 358.
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U.S. Office of Personnel Management.
Kathleen McGettigan,
Acting Director.
[FR Doc. 2017–04144 Filed 3–2–17; 8:45 am]
BILLING CODE 6325–38–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32511; 812–14692]
USAA ETF Trust, et al.; Notice of
Application
February 27, 2017.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
2(a)(32), 5(a)(1), 22(d), and 22(e) of the
Act and rule 22c–1 under the Act, under
sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and
17(a)(2) of the Act, and under section
12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and 12(d)(1)(B) of
the Act. The requested order would
permit (a) index-based series of certain
open-end management investment
companies (‘‘Funds’’) to issue shares
redeemable in large aggregations only
(‘‘Creation Units’’); (b) secondary market
transactions in Fund shares to occur at
negotiated market prices rather than at
net asset value (‘‘NAV’’); (c) certain
Funds to pay redemption proceeds,
under certain circumstances, more than
seven days after the tender of shares for
redemption; (d) certain affiliated
persons of a Fund to deposit securities
into, and receive securities from, the
Fund in connection with the purchase
and redemption of Creation Units; (e)
certain registered management
investment companies and unit
investment trusts outside of the same
group of investment companies as the
Funds (‘‘Funds of Funds’’) to acquire
shares of the Funds; and (f) certain
Funds (‘‘Feeder Funds’’) to create and
redeem Creation Units in-kind in a
master-feeder structure.
AGENCY:
USAA ETF Trust, USAA
Mutual Funds Trust (each, a ‘‘Trust’’
and collectively the ‘‘Trusts’’), each a
Delaware statutory trust that is or will
be registered under the Act as an openend management investment company
with multiple series, USAA Asset
Management Company (the ‘‘Initial
Adviser’’), a Delaware corporation that
is registered as an investment adviser
under the Investment Advisers Act of
1940, and USAA Investment
APPLICANTS:
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Federal Register / Vol. 82, No. 41 / Friday, March 3, 2017 / Notices
Management Company, a Delaware
corporation (the ‘‘Initial Distributor’’
and, together with any future
distributor, the ‘‘Distributor’’).
FILING DATES: The application was filed
on August 18, 2016 and amended on
January 31, 2017.
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 March 24, 2017, and
should be accompanied by proof of
service on 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, Securities and
Exchange Commission, 100 F Street NE.,
Washington, DC 20549–1090;
Applicants: 9800 Fredericksburg Road,
San Antonio, Texas 78288.
FOR FURTHER INFORMATION CONTACT:
Jessica Shin, Attorney-Adviser, at (202)
551–5921 or David J. Marcinkus, 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 for 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
mstockstill on DSK3G9T082PROD with NOTICES
1. Applicants request an order that
would allow Funds to operate as indexbased exchange traded funds (‘‘ETFs’’).1
Fund shares will be purchased and
redeemed at their NAV in Creation
1 Applicants request that the order apply to the
initial series of the Trust and any additional series
of the Trust, and any other existing or future openend management investment company or series
thereof (each, included in the term ‘‘Fund’’), each
of which will operate as an ETF and will track a
specified index comprised of domestic or foreign
equity and/or fixed income securities (each, an
‘‘Underlying Index’’). Any Fund will (a) be advised
by the Initial Adviser or an entity controlling,
controlled by, or under common control with the
Initial Adviser (each, an ‘‘Adviser’’) and (b) comply
with the terms and conditions of the application.
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Units only. All orders to purchase
Creation Units and all redemption
requests will be placed by or through an
‘‘Authorized Participant’’, which will
have signed a participant agreement
with the Distributor. Shares will be
listed and traded individually on a
national securities exchange, where
share prices will be based on the current
bid/offer market. Certain Funds may
operate as Feeder Funds in a masterfeeder structure. Any order granting the
requested relief would be subject to the
terms and conditions stated in the
application.
2. Each Fund will hold investment
positions selected to correspond
generally to the performance of an
Underlying Index. In the case of SelfIndexing Funds, an affiliated person, as
defined in section 2(a)(3) of the Act
(‘‘Affiliated Person’’), or an affiliated
person of an Affiliated Person (‘‘SecondTier Affiliate’’), of the Trust or a Fund,
of the Adviser, of any sub-adviser to or
promoter of a Fund, or of the Distributor
will compile, create, sponsor or
maintain the Underlying Index.2
3. Shares will be purchased and
redeemed in Creation Units and
generally on an in-kind basis. Except
where the purchase or redemption will
include cash under the limited
circumstances specified in the
application, purchasers will be required
to purchase Creation Units by
depositing specified instruments
(‘‘Deposit Instruments’’), and
shareholders redeeming their shares
will receive specified instruments
(‘‘Redemption Instruments’’). The
Deposit Instruments and the
Redemption Instruments will each
correspond pro rata to the positions in
the Fund’s portfolio (including cash
positions) except as specified in the
application.
4. Because shares will not be
individually redeemable, applicants
request an exemption from section
5(a)(1) and section 2(a)(32) of the Act
that would permit the Funds to register
as open-end management investment
companies and issue shares that are
redeemable in Creation Units only.
5. Applicants also request an
exemption from section 22(d) of the Act
and rule 22c–1 under the Act as
secondary market trading in shares will
take place at negotiated prices, not at a
current offering price described in a
2 Each Self-Indexing Fund will post on its Web
site the identities and quantities of the investment
positions that will form the basis for the Fund’s
calculation of its NAV at the end of the day.
Applicants believe that requiring Self-Indexing
Funds to maintain full portfolio transparency will
help address, together with other protections,
conflicts of interest with respect to such Funds.
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12479
Fund’s prospectus, and not at a price
based on NAV. Applicants state that (a)
secondary market trading in shares does
not involve a Fund as a party and will
not result in dilution of an investment
in shares, and (b) to the extent different
prices exist during a given trading day,
or from day to day, such variances occur
as a result of third-party market forces,
such as supply and demand. Therefore,
applicants assert that secondary market
transactions in shares will not lead to
discrimination or preferential treatment
among purchasers. Finally, applicants
represent that share market prices will
be disciplined by arbitrage
opportunities, which should prevent
shares from trading at a material
discount or premium from NAV.
6. With respect to Funds that effect
creations and redemptions of Creation
Units in kind and that are based on
certain Underlying Indexes that include
foreign securities, applicants request
relief from the requirement imposed by
section 22(e) in order to allow such
Funds to pay redemption proceeds
within fifteen calendar days following
the tender of Creation Units for
redemption. Applicants assert that the
requested relief would not be
inconsistent with the spirit and intent of
section 22(e) to prevent unreasonable,
undisclosed or unforeseen delays in the
actual payment of redemption proceeds.
7. Applicants request an exemption to
permit Funds of Funds to acquire Fund
shares beyond the limits of section
12(d)(1)(A) of the Act; and the Funds,
and any principal underwriter for the
Funds, and/or any broker or dealer
registered under the Securities
Exchange Act of 1934, to sell shares to
Funds of Funds beyond the limits of
section 12(d)(1)(B) of the Act. The
application’s terms and conditions are
designed to, among other things, help
prevent any potential (i) undue
influence over a Fund through control
or voting power, or in connection with
certain services, transactions, and
underwritings, (ii) excessive layering of
fees, and (iii) overly complex fund
structures, which are the concerns
underlying the limits in sections
12(d)(1)(A) and (B) of the Act.
8. Applicants request an exemption
from sections 17(a)(1) and 17(a)(2) of the
Act to permit persons that are Affiliated
Persons, or Second Tier Affiliates, of the
Funds, solely by virtue of certain
ownership interests, to effectuate
purchases and redemptions in-kind. The
deposit procedures for in-kind
purchases of Creation Units and the
redemption procedures for in-kind
redemptions of Creation Units will be
the same for all purchases and
redemptions and Deposit Instruments
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Federal Register / Vol. 82, No. 41 / Friday, March 3, 2017 / Notices
and Redemption Instruments will be
valued in the same manner as those
investment positions currently held by
the Funds. Applicants also seek relief
from the prohibitions on affiliated
transactions in section 17(a) to permit a
Fund to sell its shares to and redeem its
shares from a Fund of Funds, and to
engage in the accompanying in-kind
transactions with the Fund of Funds.3
The purchase of Creation Units by a
Fund of Funds directly from a Fund will
be accomplished in accordance with the
policies of the Fund of Funds and will
be based on the NAVs of the Funds.
9. Applicants also request relief to
permit a Feeder Fund to acquire shares
of another registered investment
company managed by the Adviser
having substantially the same
investment objectives as the Feeder
Fund (‘‘Master Fund’’) beyond the
limitations in section 12(d)(1)(A) and
permit the Master Fund, and any
principal underwriter for the Master
Fund, to sell shares of the Master Fund
to the Feeder Fund beyond the
limitations in section 12(d)(1)(B).
10. 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.
mstockstill on DSK3G9T082PROD with NOTICES
3 The
requested relief would apply to direct sales
of shares in Creation Units by a Fund to a Fund of
Funds and redemptions of those shares. Applicants,
moreover, are not seeking relief from section 17(a)
for, and the requested relief will not apply to,
transactions where a Fund could be deemed an
Affiliated Person, or a Second-Tier Affiliate, of a
Fund of Funds because an Adviser or an entity
controlling, controlled by or under common control
with an Adviser provides investment advisory
services to that Fund of Funds.
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18:27 Mar 02, 2017
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For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–04090 Filed 3–2–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32513; File No. 812–14563–11]
Neuberger Berman Investment
Advisers LLC, et al.; Notice of
Application
February 27, 2017.
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 management
investment companies to participate in
a joint lending and borrowing facility.
AGENCY:
Neuberger Berman
Investment Advisers LLC (‘‘NBIA’’), a
Delaware limited liability company
registered as an investment adviser
under the Investment Advisers Act of
1940; Neuberger Berman Advisers
Management Trust, Neuberger Berman
Alternative Funds, Neuberger Berman
Equity Funds, and Neuberger Berman
Income Funds, each a Delaware
statutory trust registered under the Act
as an open-end management investment
company (the ‘‘Open-End Funds’’); and
Neuberger Berman California
Intermediate Municipal Fund Inc.,
Neuberger Berman High Yield Strategies
Fund Inc., Neuberger Berman
Intermediate Municipal Fund Inc.,
Neuberger Berman MLP Income Fund
Inc., Neuberger Berman New York
Intermediate Municipal Fund Inc., and
Neuberger Berman Real Estate Securities
Income Fund Inc., each a Maryland
corporation registered under the Act as
a closed-end management investment
company (the ‘‘Closed-End Funds,’’ 1
APPLICANTS:
1 The Closed-End Funds will not participate as
borrowers in the interfund lending facility. Any
general references to the ‘‘Funds’’ that relate to
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Sfmt 4703
and together with the Open-End Funds,
the ‘‘Funds’’).2
FILING DATES: The application was filed
on October 7, 2015, and amended on
April 22, 2016, September 23, 2016, and
December 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 March 27, 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: 605 Third Avenue, 2nd
Floor, New York, NY 10158–0180.
FOR FURTHER INFORMATION CONTACT: Jill
Ehrlich, Senior Counsel, at (202) 551–
6819 or David J. Marcinkus, 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
borrowing under the facility do not apply to the
Closed-End Funds.
2 Although the applicants do not currently
operate any money market funds, applicants request
that the order also apply to any future Fund that
is a money market fund that complies with rule
2a–7 of the Act (each a ‘‘Money Market Fund’’).
Money Market Funds typically will not participate
as borrowers under the interfund lending facility
but may do so if it is determined to be in the best
interests of such Funds by the Adviser (as defined
below) and its respective portfolio manager(s).
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]]>Agencies
[Federal Register Volume 82, Number 41 (Friday, March 3, 2017)]
[Notices]
[Pages 12478-12480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04090]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32511; 812-14692]
USAA ETF Trust, et al.; Notice of Application
February 27, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1
under the Act, under sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under
section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and
12(d)(1)(B) of the Act. The requested order would permit (a) index-
based series of certain open-end management investment companies
(``Funds'') to issue shares redeemable in large aggregations only
(``Creation Units''); (b) secondary market transactions in Fund shares
to occur at negotiated market prices rather than at net asset value
(``NAV''); (c) certain Funds to pay redemption proceeds, under certain
circumstances, more than seven days after the tender of shares for
redemption; (d) certain affiliated persons of a Fund to deposit
securities into, and receive securities from, the Fund in connection
with the purchase and redemption of Creation Units; (e) certain
registered management investment companies and unit investment trusts
outside of the same group of investment companies as the Funds (``Funds
of Funds'') to acquire shares of the Funds; and (f) certain Funds
(``Feeder Funds'') to create and redeem Creation Units in-kind in a
master-feeder structure.
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APPLICANTS: USAA ETF Trust, USAA Mutual Funds Trust (each, a ``Trust''
and collectively the ``Trusts''), each a Delaware statutory trust that
is or will be registered under the Act as an open-end management
investment company with multiple series, USAA Asset Management Company
(the ``Initial Adviser''), a Delaware corporation that is registered as
an investment adviser under the Investment Advisers Act of 1940, and
USAA Investment
[[Page 12479]]
Management Company, a Delaware corporation (the ``Initial Distributor''
and, together with any future distributor, the ``Distributor'').
FILING DATES: The application was filed on August 18, 2016 and amended
on January 31, 2017.
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 March 24, 2017, and should be accompanied by proof of
service on 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, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090; Applicants: 9800 Fredericksburg Road,
San Antonio, Texas 78288.
FOR FURTHER INFORMATION CONTACT: Jessica Shin, Attorney-Adviser, at
(202) 551-5921 or David J. Marcinkus, 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 for 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 allow Funds to operate as
index-based exchange traded funds (``ETFs'').\1\ Fund shares will be
purchased and redeemed at their NAV in Creation Units only. All orders
to purchase Creation Units and all redemption requests will be placed
by or through an ``Authorized Participant'', which will have signed a
participant agreement with the Distributor. Shares will be listed and
traded individually on a national securities exchange, where share
prices will be based on the current bid/offer market. Certain Funds may
operate as Feeder Funds in a master-feeder structure. Any order
granting the requested relief would be subject to the terms and
conditions stated in the application.
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\1\ Applicants request that the order apply to the initial
series of the Trust and any additional series of the Trust, and any
other existing or future open-end management investment company or
series thereof (each, included in the term ``Fund''), each of which
will operate as an ETF and will track a specified index comprised of
domestic or foreign equity and/or fixed income securities (each, an
``Underlying Index''). Any Fund will (a) be advised by the Initial
Adviser or an entity controlling, controlled by, or under common
control with the Initial Adviser (each, an ``Adviser'') and (b)
comply with the terms and conditions of the application.
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2. Each Fund will hold investment positions selected to correspond
generally to the performance of an Underlying Index. In the case of
Self-Indexing Funds, an affiliated person, as defined in section
2(a)(3) of the Act (``Affiliated Person''), or an affiliated person of
an Affiliated Person (``Second-Tier Affiliate''), of the Trust or a
Fund, of the Adviser, of any sub-adviser to or promoter of a Fund, or
of the Distributor will compile, create, sponsor or maintain the
Underlying Index.\2\
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\2\ Each Self-Indexing Fund will post on its Web site the
identities and quantities of the investment positions that will form
the basis for the Fund's calculation of its NAV at the end of the
day. Applicants believe that requiring Self-Indexing Funds to
maintain full portfolio transparency will help address, together
with other protections, conflicts of interest with respect to such
Funds.
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3. Shares will be purchased and redeemed in Creation Units and
generally on an in-kind basis. Except where the purchase or redemption
will include cash under the limited circumstances specified in the
application, purchasers will be required to purchase Creation Units by
depositing specified instruments (``Deposit Instruments''), and
shareholders redeeming their shares will receive specified instruments
(``Redemption Instruments''). The Deposit Instruments and the
Redemption Instruments will each correspond pro rata to the positions
in the Fund's portfolio (including cash positions) except as specified
in the application.
4. Because shares will not be individually redeemable, applicants
request an exemption from section 5(a)(1) and section 2(a)(32) of the
Act that would permit the Funds to register as open-end management
investment companies and issue shares that are redeemable in Creation
Units only.
5. Applicants also request an exemption from section 22(d) of the
Act and rule 22c-1 under the Act as secondary market trading in shares
will take place at negotiated prices, not at a current offering price
described in a Fund's prospectus, and not at a price based on NAV.
Applicants state that (a) secondary market trading in shares does not
involve a Fund as a party and will not result in dilution of an
investment in shares, and (b) to the extent different prices exist
during a given trading day, or from day to day, such variances occur as
a result of third-party market forces, such as supply and demand.
Therefore, applicants assert that secondary market transactions in
shares will not lead to discrimination or preferential treatment among
purchasers. Finally, applicants represent that share market prices will
be disciplined by arbitrage opportunities, which should prevent shares
from trading at a material discount or premium from NAV.
6. With respect to Funds that effect creations and redemptions of
Creation Units in kind and that are based on certain Underlying Indexes
that include foreign securities, applicants request relief from the
requirement imposed by section 22(e) in order to allow such Funds to
pay redemption proceeds within fifteen calendar days following the
tender of Creation Units for redemption. Applicants assert that the
requested relief would not be inconsistent with the spirit and intent
of section 22(e) to prevent unreasonable, undisclosed or unforeseen
delays in the actual payment of redemption proceeds.
7. Applicants request an exemption to permit Funds of Funds to
acquire Fund shares beyond the limits of section 12(d)(1)(A) of the
Act; and the Funds, and any principal underwriter for the Funds, and/or
any broker or dealer registered under the Securities Exchange Act of
1934, to sell shares to Funds of Funds beyond the limits of section
12(d)(1)(B) of the Act. The application's terms and conditions are
designed to, among other things, help prevent any potential (i) undue
influence over a Fund through control or voting power, or in connection
with certain services, transactions, and underwritings, (ii) excessive
layering of fees, and (iii) overly complex fund structures, which are
the concerns underlying the limits in sections 12(d)(1)(A) and (B) of
the Act.
8. Applicants request an exemption from sections 17(a)(1) and
17(a)(2) of the Act to permit persons that are Affiliated Persons, or
Second Tier Affiliates, of the Funds, solely by virtue of certain
ownership interests, to effectuate purchases and redemptions in-kind.
The deposit procedures for in-kind purchases of Creation Units and the
redemption procedures for in-kind redemptions of Creation Units will be
the same for all purchases and redemptions and Deposit Instruments
[[Page 12480]]
and Redemption Instruments will be valued in the same manner as those
investment positions currently held by the Funds. Applicants also seek
relief from the prohibitions on affiliated transactions in section
17(a) to permit a Fund to sell its shares to and redeem its shares from
a Fund of Funds, and to engage in the accompanying in-kind transactions
with the Fund of Funds.\3\ The purchase of Creation Units by a Fund of
Funds directly from a Fund will be accomplished in accordance with the
policies of the Fund of Funds and will be based on the NAVs of the
Funds.
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\3\ The requested relief would apply to direct sales of shares
in Creation Units by a Fund to a Fund of Funds and redemptions of
those shares. Applicants, moreover, are not seeking relief from
section 17(a) for, and the requested relief will not apply to,
transactions where a Fund could be deemed an Affiliated Person, or a
Second-Tier Affiliate, of a Fund of Funds because an Adviser or an
entity controlling, controlled by or under common control with an
Adviser provides investment advisory services to that Fund of Funds.
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9. Applicants also request relief to permit a Feeder Fund to
acquire shares of another registered investment company managed by the
Adviser having substantially the same investment objectives as the
Feeder Fund (``Master Fund'') beyond the limitations in section
12(d)(1)(A) and permit the Master Fund, and any principal underwriter
for the Master Fund, to sell shares of the Master Fund to the Feeder
Fund beyond the limitations in section 12(d)(1)(B).
10. 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.
For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04090 Filed 3-2-17; 8:45 am]
BILLING CODE 8011-01-P
