Submission for OMB Review; Comment Request, 4082-4083 [2018-01599]
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Federal Register / Vol. 83, No. 19 / Monday, January 29, 2018 / Notices
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: Northern Lights Fund
Trust and Pacific Financial Group, LLC,
c/o JoAnn Strasser, Esq., Thompson
Hine LLP, 41 South High Street, Suite
1700, Columbus, OH 43215; and
Richard Malinowski, Esq., Gemini Fund
Services, 80 Arkay Drive, Hauppauge,
NY 11788.
FOR FURTHER INFORMATION CONTACT: Jean
E. Minarick, Senior Counsel, at (202)
551–6811, or Robert Shapiro, 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
website 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 to
permit (a) a Fund 1 (each a ‘‘Fund of
Funds’’) to acquire shares of Underlying
Funds 2 in excess of the limits in
sections 12(d)(1)(A) and (C) of the Act
and (b) the Underlying Funds that are
registered open-end investment
companies or series thereof, their
principal underwriters and any broker
or dealer registered under the Securities
Exchange Act of 1934 to sell shares of
the Underlying Fund to the Fund of
Funds in excess of the limits in section
12(d)(1)(B) of the Act.3 Applicants also
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1 Applicants
request that the order apply to each
existing and future series of the Trust and to each
existing and future registered open-end investment
company or series thereof that is advised by the
Applying Manager or its successor-in-interest or by
any other investment adviser controlling, controlled
by or under common control with the Applying
Manager or its successor and is part of the same
‘‘group of investment companies’’ as the Trust
(each, a ‘‘Fund’’). For purposes of the requested
order, ‘‘successor-in-interest’’ is limited to an entity
that results from a reorganization into another
jurisdiction or a change in the type of business
organization. For purposes of the request for relief,
the term ‘‘group of investment companies’’ means
any two or more registered investment companies,
including closed-end investment companies or
BDCs, that hold themselves out to investors as
related companies for purposes of investment and
investor services.
2 Certain of the Underlying Funds have obtained
exemptions from the Commission necessary to
permit their shares to be listed and traded on a
national securities exchange at negotiated prices
and, accordingly, to operate as an exchange-traded
fund (‘‘ETF’’).
3 Applicants do not request relief for the Funds
of Funds to invest in reliance on the order in BDCs
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request an order of exemption under
sections 6(c) and 17(b) of the Act from
the prohibition on certain affiliated
transactions in section 17(a) of the Act
to the extent necessary to permit the
Underlying Funds to sell their shares to,
and redeem their shares from, the Funds
of Funds.4 Applicants state that such
transactions will be consistent with the
policies of each Fund of Funds and each
Underlying Fund and with the general
purposes of the Act and will be based
on the net asset values of the
Underlying Funds.
2. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the application. Such terms
and conditions are designed to, among
other things, help prevent any potential
(i) undue influence over an Underlying
Fund that is not in the same ‘‘group of
investment companies’’ as the Fund of
Funds 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), (B), and (C) of
the Act.
3. 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
and registered closed-end investment companies
that are not listed and traded on a national
securities exchange.
4 A Fund of Funds generally would purchase and
sell shares of an Underlying Fund that operates as
an ETF through secondary market transactions
rather than through principal transactions with the
Underlying Fund. Applicants nevertheless request
relief from section 17(a)(1) and (2) to permit each
Fund of Funds that is an affiliated person, or an
affiliated person of an affiliated person, as defined
in section 2(a)(3) of the Act, of an ETF, to sell shares
to or redeem shares from the ETF. Applicants are
not seeking relief from Section 17(a) for, and the
requested relief will not apply to, transactions
where an ETF could be deemed an affiliated person,
or an affiliated person of an affiliated person, of a
Fund of Funds because an investment adviser to the
ETF or an entity controlling, controlled by or under
common control with the investment adviser to the
ETF, is also an investment adviser to the Fund of
Funds. A Fund of Funds will purchase and sell
shares of an Underlying Fund that is a closed-end
fund or BDC through secondary market transactions
at market prices rather than through principal
transactions with the closed-end fund or BDC.
Accordingly, applicants are not requesting section
17(a) relief with respect to transactions in shares of
closed-end funds (including BDCs).
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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.
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.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–01548 Filed 1–26–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–148, OMB Control No.
3235–0133]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Rule 17a–19 and Form X–17A–19.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 17a–19 (17 CFR 240.17a–19) and
Form X–17A–19 of the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.).
Rule 17a–19 requires every national
securities exchange and registered
national securities association to file a
Form X–17A–19 with the Commission
and the Securities Investor Protection
Corporation (‘‘SIPC’’) within 5 business
days of the initiation, suspension, or
termination of any member and, when
terminating the membership interest of
any member, to notify that member of
its obligation to file financial reports as
E:\FR\FM\29JAN1.SGM
29JAN1
Federal Register / Vol. 83, No. 19 / Monday, January 29, 2018 / Notices
required by Exchange Act Rule 17a–
5(b).1
Commission staff anticipates that the
national securities exchanges and
registered national securities
associations collectively will make 800
total filings annually pursuant to Rule
17a–19 and that each filing will take
approximately 15 minutes. The total
reporting burden is estimated to be
approximately 200 total annual hours.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
100 F Street NE, Washington, DC 20549,
or by sending an email to: PRA_
Mailbox@sec.gov. Comments must be
submitted to OMB within 30 days of
this notice.
Dated: January 24, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–01599 Filed 1–26–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82575; File No. TP 18–08]
Order Granting Limited Exemptions
From Rules 101 and 102 of Regulation
M in Connection With Distributions of
AT1 Contingent Convertible Securities
Pursuant to Rules 101(d) and 102(e) of
Regulation M
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January 23, 2018.
By letter dated January 23, 2018,
counsel from Sullivan & Cromwell LLP
and Davis Polk & Wardell LLP
(collectively, the ‘‘Applicants’’),1
requested that the staff of the Division
of Trading and Markets grant, on behalf
1 17
CFR 240.17a–5(b).
from John O’Connor, Sullivan & Cromwell
LLP, and John Banes, Davis Polk & Wardell LLP, to
Josephine J. Tao, Assistant Dir., Office of
Derivatives Policy & Trading Practices, Div. of
Trading & Mkts., SEC (Jan. 23, 2018) (the ‘‘Request
Letter’’).
1 Letter
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Jkt 244001
of certain European financial
institutions (each, an ‘‘Issuer’’),
conditional class exemptive or no-action
relief from Rules 101 and 102 of
Regulation M under the Securities
Exchange Act of 1934, as amended (the
‘‘Exchange Act’’), to permit certain
transactions in ordinary shares
underlying the contingent convertible
debt securities qualifying as additional
tier 1 capital (‘‘AT1 Contingent
Convertible Securities’’), including
ordinary shares represented by
American depositary shares
(collectively, ‘‘Shares’’), by Issuers and
affiliated purchasers, including those
acting as distribution participants,
during a distribution of such AT1
Contingent Convertible Securities.2
AT1 Contingent Convertible Securities
Over the last several years, a number
of European financial institutions have
issued various series of AT1 Contingent
Convertible Securities that are designed
to qualify as additional tier 1 capital
(‘‘AT1 Capital’’) that can be counted by
a financial institution towards the
capital requirements mandated by
European regulators.3
Applicants represent in the Request
Letter that the AT1 Contingent
Convertible Securities to be offered are
fundamentally fixed-income debt
securities that are priced and traded by
investors as such.4 Applicants also
2 The requested relief is solely to permit
transactions in Shares during a distribution of an
Issuer’s AT1 Contingent Convertible Securities (i.e.,
the Request Letter does not seek relief with respect
to transactions in the AT1 Contingent Convertible
Securities themselves). For purposes of this relief,
the terms ‘‘affiliated purchasers’’ and ‘‘distribution
participants’’ shall have the same meaning as
defined in Rule 100(b) of Regulation M. See 17 CFR
242.100(b).
3 Applicants represent in the Request Letter that
the qualification requirements/features for AT1
Contingent Convertible Securities that qualify as
AT1 Capital are set forth in the European Union’s
Capital Requirements Directive IV and related
Capital Requirements Regulation (collectively, the
‘‘CRD IV’’), which were issued in response to the
new global regulatory frameworks on bank capital
adequacy and liquidity adopted by the Basel
Committee on Banking Supervision in December
2010 (generally known as ‘‘Basel III’’). Applicants
represent that the purpose of AT1 Capital is to
absorb future losses through conversion to common
equity (or write-down) so as to allow a financial
institution to maintain sufficient Common Equity
Tier 1 Capital to continue as a going concern. In
addition, the basic equity-related-structure of AT1
Contingent Convertible Securities that qualify as
AT1 Capital under CRD IV is summarized in the
Request Letter.
4 Applicants also represent that Issuers have
previously indicated that they expect AT1
Contingent Convertible Securities to price and trade
more like traditional fixed-income debt instruments
than conventional convertible instruments (i.e., that
investors in AT1 Contingent Convertible Securities
are generally focused on receiving interest
payments during the life of the AT1 Contingent
Convertible Securities rather than any potential
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4083
represent in the Request Letter that,
unlike traditional convertible debt
instruments, the AT1 Contingent
Convertible Securities to be offered
automatically convert into Shares only
upon the occurrence of a remote, capital
adequacy-related trigger event that is set
forth in the terms of the relevant AT1
Contingent Convertible Security.
Specifically, Applicants represent,
among other things, the following:
• Relief is requested only with
respect to AT1 Contingent Convertible
Securities that automatically and
mandatorily convert into Shares if the
Issuer’s Common Equity Tier 1 Capital
Ratio (as calculated in accordance with
CRD IV) falls below a pre-determined
trigger level of 7.0% or lower; 5
• A Common Equity Tier 1 Capital
Ratio below 7.0% is effectively a sign of
distress, and conversion of AT1
Contingent Convertible Securities with a
trigger level of 7.0% or lower is unlikely
to occur as a result of actions within an
Issuer’s control;
• Because of the perceived severity of
the regulatory sanctions that would
otherwise apply to an Issuer who allows
its Common Equity Tier 1 Capital Ratio
to fall below its Combined Buffer
Requirement,6 Issuers have a strong
equity upside in the unlikely event of a conversion
into Shares), citing to prior requests for relief from
Rules 101 and 102 of Regulation M in connection
with offerings of AT1 Contingent Convertible
Securities: Letter from Josephine J. Tao, Assistant
Dir., Office of Derivatives Policy & Trading
Practices, Div. of Trading & Mkts., SEC, to Mark J.
Welshimer, Sullivan & Cromwell LLP (Apr. 7, 2015)
(ING Groep N.V.); Letter from Josephine J. Tao,
Assistant Dir., Office of Derivatives Policy &
Trading Practices, Div. of Trading & Mkts., SEC, to
John Banes, Davis Polk & Wardwell London LLP
(Mar. 6, 2014) (Lloyds Banking Group); Letter from
Josephine J. Tao, Assistant Dir., Office of
Derivatives Policy & Trading Practices, Div. of
Trading & Mkts., SEC, to George H. White, Sullivan
& Cromwell LLP (Nov. 7, 2013) (Barclays PLC);
Letter From Josephine J. Tao, Assistant Dir., Office
of Derivatives Policy & Trading Practices, Div. of
Trading & Mkts., SEC, to Michael J. Willisch, Davis
Polk & Wardwell Spain LLP (Nov. 3, 2017) (Banco
Bilbao Vizcaya Argentaria, S.A.).
5 Applicants represent that guidance from the UK
Prudential Regulation Authority will generally
result in a 7.0% trigger level for AT1 Contingent
Convertible Securities issued by UK financial
institutions, which is intended to ensure that only
instruments that will reliably absorb losses while a
firm is still a going concern can count towards the
leverage ratio under CRD IV. Applicants represent
that the applicable 7.0% threshold is equivalent to
the sum of the basic 4.5% minimum for Common
Equity Tier 1 Capital under CRD IV and the
additional 2.5% capital conservation buffer that is
also required to be satisfied with Common Equity
Tier 1 Capital under CRD IV.
6 In addition to the basic 4.5% minimum
Common Equity Tier 1 Capital Ratio under CRD IV,
there is a Combined Buffer Requirement applicable
to any institution that is incremental to the
minimum requirement and is composed of (1) in all
cases, an additional 2.5% capital conservation
buffer (with the consequence that the sum of the
E:\FR\FM\29JAN1.SGM
Continued
29JAN1
]]>Agencies
[Federal Register Volume 83, Number 19 (Monday, January 29, 2018)]
[Notices]
[Pages 4082-4083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01599]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-148, OMB Control No. 3235-0133]
Submission for OMB Review; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
Extension:
Rule 17a-19 and Form X-17A-19.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rule 17a-
19 (17 CFR 240.17a-19) and Form X-17A-19 of the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).
Rule 17a-19 requires every national securities exchange and
registered national securities association to file a Form X-17A-19 with
the Commission and the Securities Investor Protection Corporation
(``SIPC'') within 5 business days of the initiation, suspension, or
termination of any member and, when terminating the membership interest
of any member, to notify that member of its obligation to file
financial reports as
[[Page 4083]]
required by Exchange Act Rule 17a-5(b).\1\
---------------------------------------------------------------------------
\1\ 17 CFR 240.17a-5(b).
---------------------------------------------------------------------------
Commission staff anticipates that the national securities exchanges
and registered national securities associations collectively will make
800 total filings annually pursuant to Rule 17a-19 and that each filing
will take approximately 15 minutes. The total reporting burden is
estimated to be approximately 200 total annual hours.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
The public may view background documentation for this information
collection at the following website: www.reginfo.gov. Comments should
be directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503, or by sending an email to:
[email protected]; and (ii) Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE, Washington, DC 20549, or by sending an
email to: [email protected]. Comments must be submitted to OMB within
30 days of this notice.
Dated: January 24, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-01599 Filed 1-26-18; 8:45 am]
BILLING CODE 8011-01-P
