Advanced Series Trust, et al.; Notice of Application, 13529-13531 [2017-04812]

Download as PDF Federal Register / Vol. 82, No. 47 / Monday, March 13, 2017 / Notices In particular, the proposed rule change to amend the Board size range in the Bylaws and Certificate of Incorporation provides the Board with flexibility. Additionally, the Exchange is not proposing to amend any of the compositional requirements currently set forth in the Bylaws. The Exchange therefore believes that the proposed changes will provide greater flexibility to the Exchange in populating a Board of Directors that includes directors with relevant and diverse expertise, while continuing to ensure that the Board is of adequate size and the existing compositional requirements of the Exchange are met, including the provision relating to the fair representation of members. The Exchange believes eliminating the Exchange-level Compensation Committee allows the Exchange to eliminate a board committee whose responsibilities overlap with, and are adequately handled by, the corresponding committee of the Exchange’s ultimate parent. This will allow directors of the Exchange to focus their attention on matters falling directly within the purview of the Exchange’s board, including its orderly discharge of regulatory duties to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition mstockstill on DSK3G9T082PROD with NOTICES The Exchange does not believe the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change relates to the corporate governance of CBOE and not the operations of the Exchange. This is not a competitive filing and, therefore, imposes no burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. VerDate Sep<11>2014 17:49 Mar 10, 2017 Jkt 241001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CBOE–2017–017 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR–CBOE–2017–017. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for Frm 00102 Fmt 4703 Sfmt 4703 inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE– 2017–017 and should be submitted on or before April 3, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–04815 Filed 3–10–17; 8:45 am] BILLING CODE 8011–01–P IV. Solicitation of Comments PO 00000 13529 SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 32523; File No. 812–14608] Advanced Series Trust, et al.; Notice of Application March 7, 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 open-end management investment companies to participate in a joint lending and borrowing facility. AGENCY: Advanced Series Trust, Prudential’s Gibraltar Fund, Inc., The Prudential Series Fund, Prudential Global Total Return Fund, Inc., Prudential Government Money Market Fund, Inc., The Prudential Investment Portfolios, Inc., Prudential Investment Portfolios 2, Prudential Investment Portfolios 3, Prudential Investment Portfolios 4, Prudential Investment Portfolios 5, Prudential Investment Portfolios 6, Prudential Investment Portfolios 7, Prudential Investment Portfolios 8, Prudential Investment Portfolios 9, Prudential Investment Portfolios, Inc. 10, Prudential APPLICANTS: 12 17 E:\FR\FM\13MRN1.SGM CFR 200.30–3(a)(12). 13MRN1 mstockstill on DSK3G9T082PROD with NOTICES 13530 Federal Register / Vol. 82, No. 47 / Monday, March 13, 2017 / Notices Investment Portfolios 12, Prudential Investment Portfolios, Inc. 14, Prudential Investment Portfolios, Inc. 15, Prudential Investment Portfolios 16, Prudential Investment Portfolios, Inc. 17, Prudential Investment Portfolios 18, Prudential Jennison Blend Fund, Inc., Prudential Jennison Mid-Cap Growth Fund, Inc., Prudential Jennison Natural Resources Fund, Inc., Prudential Jennison Small Company Fund, Inc., Prudential National Muni Fund, Inc., Prudential Sector Funds, Inc., Prudential Short-Term Corporate Bond Fund, Inc., Prudential World Fund, Inc., The Prudential Variable Contract Account–2, The Prudential Variable Contract Account–10, The Prudential Variable Contract Account–11, and The Target Portfolio Trust, each registered under the Act as an open-end management investment company with one or more series or portfolios, and Prudential Investments LLC and AST Investment Services, Inc., each registered as an investment adviser under the Investment Advisers Act of 1940. FILING DATES: The application was filed on February 3, 2016, and amended on June 30, 2016, February 7, 2017 and March 1, 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 April 3, 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, c/o Jonathan D. Shain, Esq., Prudential Investments LLC, 655 Broad Street, 17th Floor, Newark, NJ 07102. FOR FURTHER INFORMATION CONTACT: Kaitlin C. Bottock, Senior Counsel, at (202) 551–8658 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 VerDate Sep<11>2014 17:49 Mar 10, 2017 Jkt 241001 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 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, an Adviser, 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 subject to oversight and certain approvals by the Funds’ Board, 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 Prudential Investments LLC, AST Investment Services, Inc., or any successor thereto or an investment adviser controlling, controlled by, or under common control with Prudential Investments LLC, AST Investment Services, Inc., 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. 2 Any Fund, however, will be able to call a loan on one business day’s notice. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 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 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. E:\FR\FM\13MRN1.SGM 13MRN1 Federal Register / Vol. 82, No. 47 / Monday, March 13, 2017 / Notices 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. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–04812 Filed 3–10–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IA–4659; File No. 803–00231] The Jeffrey Company; Notice of Application March 7, 2017. Securities and Exchange Commission (the ‘‘Commission’’). ACTION: Notice of application for an exemptive order under the Investment Advisers Act of 1940 (‘‘Advisers Act’’). mstockstill on DSK3G9T082PROD with NOTICES AGENCY: The Jeffrey Company (the ‘‘Applicant’’). RELEVANT ADVISERS ACT SECTIONS: Exemption requested under Section 202(a)(11)(H) of the Advisers Act from Section 202(a)(11) of the Advisers Act. APPLICANT: VerDate Sep<11>2014 17:49 Mar 10, 2017 Jkt 241001 The Applicant requests that the Commission issue an order declaring the Applicant to be a person not within the intent of Section 202(a)(11) of the Advisers Act, which defines the term ‘‘investment adviser.’’ FILING DATES: The application was filed on September 2, 2016, and amended on December 14, 2016 and February 9, 2017. 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 the Applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 3, 2017, and should be accompanied by proof of service on the Applicant, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to Rule 0–5 under the Advisers 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 may request notification of a hearing by writing to the Commission’s Secretary. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. Applicant, The Jeffrey Company, c/o Dan L. Jaffe, Vorys, Sater, Seymour and Pease LLP, 52 East Gay Street, Columbus, Ohio 43215. FOR FURTHER INFORMATION CONTACT: James McGinnis, Senior Counsel, at (202) 551–3025 or Holly Hunter-Ceci, Acting Assistant Chief Counsel, at (202) 551–6825 (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 either at http://www.sec.gov/ rules/iareleases.shtml or by searching for the file number, or for an applicant using the Company name box, at http:// www.sec.gov/search/search.htm, or by calling (202) 551–8090. SUMMARY OF APPLICATION: Applicant’s Representations 1. The Applicant, an Ohio corporation, is the managing member of Jeffrey LLC, a Delaware limited liability company. By acting as managing member of Jeffrey LLC, the Applicant provides services to the family and descendants of Joseph A. Jeffrey (1836– 1928) (‘‘J.A. Jeffrey’’); all of the membership interests in Jeffrey LLC (‘‘units’’) are owned directly or indirectly by the descendants of J.A. Jeffrey. The securities of the Applicant PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 13531 also are 100% owned directly or indirectly by the descendants of J.A. Jeffrey. The Applicant is managed by a board of directors (the ‘‘Board’’), a majority of the members of which are Family Members as defined in paragraph (d)(6) of Rule 202(a)(11)(G)–1 (the ‘‘Family Office Rule’’) (with J.A. Jeffrey being the ‘‘common ancestor’’ for this purpose). Unless otherwise defined herein, capitalized terms have the same meaning as defined in the Family Office Rule. 2. The Applicant provides services (both advisory and non-advisory) to Jeffrey LLC in its capacity as the managing member of Jeffrey LLC. 3. The Applicant has engaged Katahdin Asset Management LLC, a Delaware limited liability company (‘‘KAM’’), to provide advisory and nonadvisory services to, and to conduct the day-to-day operations of, Jeffrey LLC and the Applicant, with KAM’s own employees (neither Jeffrey LLC nor the Applicant having employees of its own), subject to the direction of the Board. The Board also has the responsibility to establish and periodically review and change as necessary the policies, directives, and goals of Jeffrey LLC, as well as the right to monitor and evaluate the performance of KAM in implementing the policies and directives and in obtaining the goals of Jeffrey LLC. 4. The Applicant represents that (i) each person served by the Applicant is a Family Client, i.e., the Applicant has no clients other than a Family Client as required by paragraph (b)(1) of the Family Office Rule, (ii) the Applicant is owned and controlled in a manner that complies in all respects with paragraph (b)(2) of the Family Office Rule, and (iii) the Applicant does not hold itself out to the public as an investment adviser as required by paragraph (b)(3) of the Family Office Rule. 5. The Applicant represents that Jeffrey LLC currently relies on an exception from the definition of investment company pursuant to Section 3(c)(1) of the Investment Company Act of 1940, as amended (the ‘‘ICA’’). Jeffrey LLC would like to offer to additional Family Clients the opportunity to invest in Jeffrey LLC (subject to securities law compliance, including complying with applicable federal and state exemptions from the registration of its securities). The Applicant states that the 100 beneficial owner limitation of Section 3(c)(1) of the ICA would cause family friction by denying to many Family Clients the opportunity to invest in Jeffrey LLC. The Applicant states that there are approximately 350 Family Members. E:\FR\FM\13MRN1.SGM 13MRN1

Agencies

[Federal Register Volume 82, Number 47 (Monday, March 13, 2017)]
[Notices]
[Pages 13529-13531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04812]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32523; File No. 812-14608]


Advanced Series Trust, et al.; Notice of Application

March 7, 2017.
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: Advanced Series Trust, Prudential's Gibraltar Fund, Inc., 
The Prudential Series Fund, Prudential Global Total Return Fund, Inc., 
Prudential Government Money Market Fund, Inc., The Prudential 
Investment Portfolios, Inc., Prudential Investment Portfolios 2, 
Prudential Investment Portfolios 3, Prudential Investment Portfolios 4, 
Prudential Investment Portfolios 5, Prudential Investment Portfolios 6, 
Prudential Investment Portfolios 7, Prudential Investment Portfolios 8, 
Prudential Investment Portfolios 9, Prudential Investment Portfolios, 
Inc. 10, Prudential

[[Page 13530]]

Investment Portfolios 12, Prudential Investment Portfolios, Inc. 14, 
Prudential Investment Portfolios, Inc. 15, Prudential Investment 
Portfolios 16, Prudential Investment Portfolios, Inc. 17, Prudential 
Investment Portfolios 18, Prudential Jennison Blend Fund, Inc., 
Prudential Jennison Mid-Cap Growth Fund, Inc., Prudential Jennison 
Natural Resources Fund, Inc., Prudential Jennison Small Company Fund, 
Inc., Prudential National Muni Fund, Inc., Prudential Sector Funds, 
Inc., Prudential Short-Term Corporate Bond Fund, Inc., Prudential World 
Fund, Inc., The Prudential Variable Contract Account-2, The Prudential 
Variable Contract Account-10, The Prudential Variable Contract Account-
11, and The Target Portfolio Trust, each registered under the Act as an 
open-end management investment company with one or more series or 
portfolios, and Prudential Investments LLC and AST Investment Services, 
Inc., each registered as an investment adviser under the Investment 
Advisers Act of 1940.

Filing Dates: The application was filed on February 3, 2016, and 
amended on June 30, 2016, February 7, 2017 and March 1, 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 April 3, 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, c/o Jonathan D. 
Shain, Esq., Prudential Investments LLC, 655 Broad Street, 17th Floor, 
Newark, NJ 07102.

FOR FURTHER INFORMATION CONTACT: Kaitlin C. Bottock, Senior Counsel, at 
(202) 551-8658 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 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 applicants 
and to any existing or future registered open-end management 
investment company or series thereof for which Prudential 
Investments LLC, AST Investment Services, Inc., or any successor 
thereto or an investment adviser controlling, controlled by, or 
under common control with Prudential Investments LLC, AST Investment 
Services, Inc., 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.
    \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, an Adviser, 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 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\
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    \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

[[Page 13531]]

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.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04812 Filed 3-10-17; 8:45 am]
 BILLING CODE 8011-01-P