Columbia Funds Series Trust, et al., 5153-5154 [2018-02169]
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Federal Register / Vol. 83, No. 24 / Monday, February 5, 2018 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
HEARING OR NOTIFICATION OF HEARING:
[FR Doc. 2018–02170 Filed 2–2–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32998; File No. 812–14842]
Columbia Funds Series Trust, et al.
January 30, 2018.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
sradovich on DSK3GMQ082PROD with NOTICES
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.1
APPLICANTS: Columbia Funds Series
Trust, Columbia Funds Series Trust I,
Columbia Funds Series Trust II,
Columbia Funds Variable Insurance
Trust, Columbia Funds Variable Series
Trust II, Columbia ETF Trust I and
Columbia ETF Trust II (each a ‘‘Trust’’
and collectively, the ‘‘Trusts’’), each
registered under the Act as open-end
management investment companies
with one or more series, and Columbia
Management Investment Advisers, LLC
(‘‘Columbia Management’’), registered as
an investment adviser under the
Investment Advisers Act of 1940.
FILING DATE: The application was filed
on November 9, 2017.
1 The requested order would supersede an
exemptive order issued by the Commission on
October 24, 2006, with the result that no person
will continue to rely on the prior order if the order
is granted. RiverSource Diversified Income Series,
Inc., et al., Investment Company Act Release Nos.
27506 (September 28, 2006) (notice) and 27525
(October 24, 2016) (order). All existing entities that
currently intend to rely on the order have been
named as applicants. Any other existing or future
entity that relies on the order in the future will
comply with the terms and conditions of the
application.
VerDate Sep<11>2014
18:08 Feb 02, 2018
Jkt 244001
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 February 26, 2018 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 Brian D. McCabe, Esq.
and Nathan D. Somogie, Esq., Rope &
Gray LLP, Prudential Tower, 800
Boylston Street, Boston, MA 02199.
FOR FURTHER INFORMATION CONTACT: HaeSung Lee, Attorney-Adviser, at (202)
551–7345 or Robert H. 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 an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Summary of the Application
1. Applicants request an order that
would permit the applicants to
participate in an interfund lending
facility where each Fund could lend
money directly to and borrow money
directly from other Funds to cover
unanticipated cash shortfalls, such as
unanticipated redemptions or trade
fails.2 The Funds will not borrow under
2 Applicants request that the order apply to the
applicants and to any existing or future series of the
Trusts and to any other registered open-end or
closed-end management investment company or its
series for which Columbia Management and each
successor thereto or a person controlling, controlled
by, or under common control with Columbia
Management serves as investment adviser (each
such investment adviser may be referred to as an
‘‘Adviser’’ and collectively, the ‘‘Advisers’’). 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. The Funds
that are closed-end management investment
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
5153
the facility for leverage purposes and
the loans’ duration will be no more than
7 days.3
2. Applicants anticipate that the
proposed facility would provide a
borrowing Fund with a source of
liquidity at a rate lower than the bank
borrowing rate at times when the cash
position of the Fund is insufficient to
meet temporary cash requirements. In
addition, Funds making short-term cash
loans directly to other Funds would
earn interest at a rate higher than they
otherwise could obtain from investing
their cash in repurchase agreements or
certain other short term money market
instruments. Thus, applicants assert that
the facility would benefit both
borrowing and lending Funds.
3. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the Application. Among
others, the Adviser, through a
designated committee, would
administer the facility as a disinterested
fiduciary as part of its duties under the
investment management 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.4
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.5 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
companies will not participate as borrowers in the
interfund lending facility.
3 Any Fund, however, will be able to call a loan
on one business day’s notice.
4 Under certain circumstances, a borrowing Fund
will be required to pledge collateral to secure the
loan.
5 Applicants state that the obligation to repay an
interfund loan could be deemed to constitute a
security for the purposes of sections 17(a)(1) and
12(d)(1) of the Act.
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05FEN1
sradovich on DSK3GMQ082PROD with NOTICES
5154
Federal Register / Vol. 83, No. 24 / Monday, February 5, 2018 / Notices
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).6
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
6 Applicants state that any pledge of securities to
secure an interfund loan could constitute a
purchase of securities for purposes of section
17(a)(2) of the Act.
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18:08 Feb 02, 2018
Jkt 244001
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. 2018–02169 Filed 2–2–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82604; File No. SR–
NASDAQ–2018–007]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Relocate
the Consolidated Audit Trail
Compliance Rules
January 30, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
29, 2018, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. 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 relocate the
Consolidated Audit Trail Compliance
rules (‘‘CAT Rules’’), currently under
the 6800 Series (Rules 6810 through
6896), to General 7, Sections 1 through
13 in the Exchange’s rulebook’s
(‘‘Rulebook’’) shell structure.3
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Recently, the Exchange added a shell structure
to its Rulebook with the purpose of improving
efficiency and readability and to align its rules
closer to those of its five sister exchanges, Nasdaq
BX, Inc.; Nasdaq PHLX LLC; Nasdaq ISE, LLC;
Nasdaq GEMX, LLC; and Nasdaq MRX, LLC
(‘‘Affiliated Exchanges’’). See Securities Exchange
Act Release No. 82175 (November 29, 2017), 82 FR
57494 (December 5, 2017) (SR–NASDAQ–2017–
125).
2 17
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaq.cchwallstreet.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
Exchange 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 these
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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to relocate the
CAT Rules, currently under the 6800
Series, Rules 6810 through 6896, to
General 7, Sections 1 through 13 of the
Rulebook’s shell structure.
The Exchange adopted the CAT Rules
to implement a consolidated audit trail
in order to capture customer and order
event information to comply with the
provisions of the National Market
System Plan Governing the
Consolidated Audit Trail.4 Because the
CAT Rules apply across all markets and
to all products,5 the Exchange believes
it is pertinent that they be located in the
General section of the Rulebook’s shell;
therefore, the Exchange will amend the
shell structure, creating a new ‘‘General
7 Consolidated Audit Trail Compliance’’
title under ‘‘General Equity and Options
Rules,’’ and make conforming changes
to the ‘‘Options Rules’’ titles; moreover,
this proposal is consistent with similar
filings concurrently submitted by the
Affiliated Exchanges.
The relocation of the CAT Rules is
part of the Exchange’s continued effort
to promote efficiency and conformity of
its processes with those of its Affiliated
Exchanges.6 The Exchange believes that
the migration of the CAT Rules to their
new location will facilitate the use of
4 See Securities Exchange Act Release No. 80256
(March 15, 2017), 82 FR 14526 (March 21, 2017)
(SR–NASDAQ–2017–008) (Order Approving
Proposed Rule Changes To Adopt Consolidated
Audit Trail Compliance Rules).
5 Id.
6 See footnote 3.
E:\FR\FM\05FEN1.SGM
05FEN1
]]>Agencies
[Federal Register Volume 83, Number 24 (Monday, February 5, 2018)]
[Notices]
[Pages 5153-5154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-02169]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32998; File No. 812-14842]
Columbia Funds Series Trust, et al.
January 30, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
-----------------------------------------------------------------------
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.\1\
---------------------------------------------------------------------------
\1\ The requested order would supersede an exemptive order
issued by the Commission on October 24, 2006, with the result that
no person will continue to rely on the prior order if the order is
granted. RiverSource Diversified Income Series, Inc., et al.,
Investment Company Act Release Nos. 27506 (September 28, 2006)
(notice) and 27525 (October 24, 2016) (order). All existing entities
that currently intend to rely on the order have been named as
applicants. Any other existing or future entity that relies on the
order in the future will comply with the terms and conditions of the
application.
Applicants: Columbia Funds Series Trust, Columbia Funds Series Trust
I, Columbia Funds Series Trust II, Columbia Funds Variable Insurance
Trust, Columbia Funds Variable Series Trust II, Columbia ETF Trust I
and Columbia ETF Trust II (each a ``Trust'' and collectively, the
``Trusts''), each registered under the Act as open-end management
investment companies with one or more series, and Columbia Management
Investment Advisers, LLC (``Columbia Management''), registered as an
---------------------------------------------------------------------------
investment adviser under the Investment Advisers Act of 1940.
Filing Date: The application was filed on November 9, 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 February 26, 2018 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 Brian D. McCabe,
Esq. and Nathan D. Somogie, Esq., Rope & Gray LLP, Prudential Tower,
800 Boylston Street, Boston, MA 02199.
FOR FURTHER INFORMATION CONTACT: Hae-Sung Lee, Attorney-Adviser, at
(202) 551-7345 or Robert H. 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 an applicant
using the Company name box, at https://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Summary of the Application
1. Applicants request an order that would permit the applicants to
participate in an interfund lending facility where each Fund could lend
money directly to and borrow money directly from other Funds to cover
unanticipated cash shortfalls, such as unanticipated redemptions or
trade fails.\2\ The Funds will not borrow under the facility for
leverage purposes and the loans' duration will be no more than 7
days.\3\
---------------------------------------------------------------------------
\2\ Applicants request that the order apply to the applicants
and to any existing or future series of the Trusts and to any other
registered open-end or closed-end management investment company or
its series for which Columbia Management and each successor thereto
or a person controlling, controlled by, or under common control with
Columbia Management serves as investment adviser (each such
investment adviser may be referred to as an ``Adviser'' and
collectively, the ``Advisers''). 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. The Funds that are closed-end management
investment companies will not participate as borrowers in the
interfund lending facility.
\3\ Any Fund, however, will be able to call a loan on one
business day's notice.
---------------------------------------------------------------------------
2. Applicants anticipate that the proposed facility would provide a
borrowing Fund with a source of liquidity at a rate lower than the bank
borrowing rate at times when the cash position of the Fund is
insufficient to meet temporary cash requirements. In addition, Funds
making short-term cash loans directly to other Funds would earn
interest at a rate higher than they otherwise could obtain from
investing their cash in repurchase agreements or certain other short
term money market instruments. Thus, applicants assert that the
facility would benefit both borrowing and lending Funds.
3. Applicants agree that any order granting the requested relief
will be subject to the terms and conditions stated in the Application.
Among others, the Adviser, through a designated committee, would
administer the facility as a disinterested fiduciary as part of its
duties under the investment management 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.\4\
---------------------------------------------------------------------------
\4\ 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.\5\ 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
[[Page 5154]]
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).\6\
---------------------------------------------------------------------------
\5\ 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.
\6\ 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.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02169 Filed 2-2-18; 8:45 am]
BILLING CODE 8011-01-P
