IndexIQ ETF Trust, et al., 35289-35291 [2018-15861]

Download as PDF Federal Register / Vol. 83, No. 143 / Wednesday, July 25, 2018 / Notices ACTION: Notice. The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: July 25, 2018. FOR FURTHER INFORMATION CONTACT: Elizabeth Reed, 202–268–3179. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 19, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express, Priority Mail, & First-Class Package Service Contract 42 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018–193, CP2018–271. SUMMARY: Elizabeth Reed, Attorney, Corporate and Postal Business Law. [FR Doc. 2018–15843 Filed 7–24–18; 8:45 am] BILLING CODE 7710–12–P POSTAL SERVICE Unused Label Refunds Postal ServiceTM. Notice. AGENCY: ACTION: The Postal Service will implement two new options for mailers to submit refund requests for unused labels using an automated online process. A hyperlink will be located on the Electronic Verification System (eVS®) Monthly Account and Sampling Summary page where users can access a portal to submit unused label refunds. DATES: These options shall be implemented August 1, 2018. FOR FURTHER INFORMATION CONTACT: Direct questions to Jimmy A. Palma by email at jimmy.a.palma@usps.gov or by phone at (202) 268–8798. SUPPLEMENTARY INFORMATION: daltland on DSKBBV9HB2PROD with NOTICES SUMMARY: Background Currently the Postal Service allows eVS mailers to submit a refund request for unused labels using a Type ‘‘4’’ Corrections Shipping Services File. Additionally, eVS mailers can submit refund requests for unused labels through the Dispute Queue accessible from the Business Customer Gateway. In this Notice, the Postal Service is announcing its plan to replace these methods with two new options for eVS mailers to submit refund requests for unused labels, using an automated VerDate Sep<11>2014 18:50 Jul 24, 2018 Jkt 244001 online process. A hyperlink titled ‘‘Submit Refund Request for Unused Labels’’ will be added to the eVS Monthly Account and Sampling Summary page. This hyperlink provides access to the portal to use the two new options. The two options are as follows: Option 1—PIC/EFN Submission (Text File Option) A mailer can upload a text (.txt) file with multiple Package Identification Codes/Electronic File Numbers (PIC/ EFNs). There is no limit to the number of PIC/EFNs submitted if using the text (.txt) upload option. Refer to appendix N in Postal Service Publication 205, Electronic Verification System (eVS®) Business and Technical Guide (https:// postalpro.usps.com/node/3724) for guidance on using the online interface for uploading text files or using the entry box when requesting refunds for unused labels. All refund requests made through the online interface must be submitted within 60 days of the date of mailing. The system will validate if PIC/ EFNs are formatted appropriately, and will create a dispute queue case number accessible through both the eVS landing page and the dispute queue. If PIC/EFNs fail format validation, an error message will be displayed for any of the following reasons: Invalid PIC length, duplicate EFN, commas in EFN, invalid EFN prefix, EFN submitted as a PIC, and/or invalid EFN length. If PIC/EFNs pass format validation, the system will reconcile the uploaded file to manifest data to verify payment activity, physical scan activity, timely submission, and uniqueness. As a result of the system evaluation, PIC/EFNs are approved or denied. Mailers can view the status and the results by accessing the Unused Label Refund Report in the Dispute Queue in PostalOne! ®. A refund will be issued within 20 days to the shipper’s CAPS account for the approved PIC/ EFNs. As is the current practice, the refund will be 90 percent of the labels’ postage value unless a different percentage is authorized. Option 2—PIC/EFN Submission (Entry Option) A mailer can enter up to 200 PIC/ EFNs in the online entry form in PostalOne!. Refer to appendix N in Postal Service Publication 205 (https:// postalpro.usps.com/node/3724) for guidance on using the online interface for uploading text files or using the entry box when requesting refunds for unused labels. All refund requests made through the online interface must be submitted within 60 days of the date of mailing. The system will validate if PIC/ EFNs are formatted appropriately, and PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 35289 will create a dispute queue case number, accessible through both the eVS landing page and the dispute queue. If PIC/EFNs fail format validation, an error message will be displayed for any of the following reasons: invalid PIC length, duplicate EFN, commas in EFN, invalid EFN prefix, EFN submitted as a PIC, and/or invalid EFN length. If PIC/EFNs pass format validation, the system will reconcile uploaded file to manifest data to verify payment activity, physical scan activity, timely submission, and uniqueness. As a result of the system evaluation, PIC/EFNs are approved or denied. Mailers can view the status and the results by accessing the Unused Label Refund Report in the Dispute Queue in PostalOne!. A refund will be issued within 20 days to the shipper’s CAPS account for the approved PIC/ EFNs. As is the current practice, the refund will be 90 percent of the labels’ postage value unless a different percentage is authorized. The addition of the above two automated options will provide a benefit to mailers by reducing the processing time of refund requests for unused labels while providing mailers better visibility into the status of refund cases. Once deployed, the two automated options will be the only method to submit unused label refund requests. Maria W. Votsch, Attorney, Corporate and Postal Business Law. [FR Doc. 2018–15826 Filed 7–24–18; 8:45 am] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33163; 812–14889] IndexIQ ETF Trust, et al. July 19, 2018. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: 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 E:\FR\FM\25JYN1.SGM 25JYN1 daltland on DSKBBV9HB2PROD with NOTICES 35290 Federal Register / Vol. 83, No. 143 / Wednesday, July 25, 2018 / Notices companies (‘‘Funds’’) to issue shares redeemable in large aggregations (‘‘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; (f) certain Funds (‘‘Feeder Funds’’) to create and redeem Creation Units in-kind in a masterfeeder structure; and (g) certain Funds to issue Shares in less than Creation Unit size to investors participating in a distribution reinvestment program. The requested order would supersede the applicant’s prior orders.1 APPLICANTS: IndexIQ ETF Trust (the ‘‘Trust’’), a Delware statutory trust registered under the Act as an open-end management investment company with multiple series, IndexIQ Advisors LLC (the ‘‘Adviser’’), a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940, and ALPS Distributors, Inc. (the ‘‘Distributor’’), a Colorado corporation and broker-dealer registered under the Securities Exchange Act of 1934 (‘‘Exchange Act’’). FILING DATES: The application was filed on March 16, 2018 and amended on May 25, 2018, July 2, 2018, and July 12, 2018. 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 August 13, 2018, 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 1 IndexIQ ETF Trust, et. al., Investment Company Act Release Nos. 28638 (Feb. 27, 2009) (notice) and 28653 (Mar. 20, 2009) (order) and IndexIQ ETF Trust, et. al., Investment Company Release Nos. 30843 (Dec. 23, 2013) (notice) and 30888 (Jan. 22, 2014) (order). VerDate Sep<11>2014 18:50 Jul 24, 2018 Jkt 244001 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: The Trust and the Adviser, 51 Madison Avenue 4th Floor, New York, NY 10010, and the Distributor, 1290 Broadway, Suite 1100, Denver, CO 80203. FOR FURTHER INFORMATION CONTACT: HaeSung Lee, Attorney-Adviser, at (202) 551–7345, or Andrea Ottomanelli Magovern, Branch Chief, 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 website 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 the Application 1. Applicants request an order that would allow Funds to operate as index exchange traded funds (‘‘ETFs’’).2 Fund shares will be purchased and redeemed at their NAV in Creation Units (other than pursuant to a distribution reinvestment program, as described in the application). 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 master2 Applicants request that the order apply to the current series of the Trust identified and described in Appendix A to the application (‘‘Current Funds’’) and any additional series of the Trust, and any other existing or future open-end management investment company or existing or future series thereof (together with the Current Funds, ‘‘Funds’’), each of which will operate as an ETF, and their respective existing or future Master Funds, and will track a specified index comprised of domestic and/ or foreign equity securities and/or domestic and/or foreign fixed income securities (each, an ‘‘Underlying Index’’). Any Fund will (a) be advised by the Adviser or an entity controlling, controlled by, or under common control with the Adviser (each such entity and any successor thereto, an ‘‘Adviser’’) and (b) comply with the terms and conditions of the application. For purposes of the requested order, a ‘‘successor’’ is limited to an entity or entities that result from a reorganization into another jurisdiction or a change in the type of business organization. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 feeder 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 closely 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.3 3. Shares will be purchased and redeemed in Creation Units and generally on an in-kind basis, or issued in less than Creation Unit size to investors participating in a distribution reinvestment program. 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. 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, 3 Each Self-Indexing Fund will post on its website 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. E:\FR\FM\25JYN1.SGM 25JYN1 daltland on DSKBBV9HB2PROD with NOTICES Federal Register / Vol. 83, No. 143 / Wednesday, July 25, 2018 / Notices 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 Exchange Act, 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 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 VerDate Sep<11>2014 18:50 Jul 24, 2018 Jkt 244001 transactions with the Fund of Funds.4 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. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–15861 Filed 7–24–18; 8:45 am] BILLING CODE 8011–01–P 4 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. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 35291 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83673; File No. SR– CboeBZX–2018–051] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Exchange Rule 11.13, Order Execution and Routing, To Amend the Operation of the Super Aggressive Order Instruction July 19, 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 July 11, 2018, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) 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 Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. 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 filed a proposal to amend the operation of the Super Aggressive order instruction under paragraph (b)(4)(C) of Exchange Rule 11.13. The text of the proposed rule change is available at the Exchange’s website at www.markets.cboe.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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\25JYN1.SGM 25JYN1

Agencies

[Federal Register Volume 83, Number 143 (Wednesday, July 25, 2018)]
[Notices]
[Pages 35289-35291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15861]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33163; 812-14889]


IndexIQ ETF Trust, et al.

July 19, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

-----------------------------------------------------------------------

    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

[[Page 35290]]

companies (``Funds'') to issue shares redeemable in large aggregations 
(``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; (f) certain Funds (``Feeder 
Funds'') to create and redeem Creation Units in-kind in a master-feeder 
structure; and (g) certain Funds to issue Shares in less than Creation 
Unit size to investors participating in a distribution reinvestment 
program. The requested order would supersede the applicant's prior 
orders.\1\
---------------------------------------------------------------------------

    \1\ IndexIQ ETF Trust, et. al., Investment Company Act Release 
Nos. 28638 (Feb. 27, 2009) (notice) and 28653 (Mar. 20, 2009) 
(order) and IndexIQ ETF Trust, et. al., Investment Company Release 
Nos. 30843 (Dec. 23, 2013) (notice) and 30888 (Jan. 22, 2014) 
(order).

Applicants: IndexIQ ETF Trust (the ``Trust''), a Delware statutory 
trust registered under the Act as an open-end management investment 
company with multiple series, IndexIQ Advisors LLC (the ``Adviser''), a 
Delaware limited liability company registered as an investment adviser 
under the Investment Advisers Act of 1940, and ALPS Distributors, Inc. 
(the ``Distributor''), a Colorado corporation and broker-dealer 
registered under the Securities Exchange Act of 1934 (``Exchange 
---------------------------------------------------------------------------
Act'').

Filing Dates: The application was filed on March 16, 2018 and amended 
on May 25, 2018, July 2, 2018, and July 12, 2018.

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 August 13, 2018, 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: The Trust and the Adviser, 
51 Madison Avenue 4th Floor, New York, NY 10010, and the Distributor, 
1290 Broadway, Suite 1100, Denver, CO 80203.

FOR FURTHER INFORMATION CONTACT: Hae-Sung Lee, Attorney-Adviser, at 
(202) 551-7345, or Andrea Ottomanelli Magovern, Branch Chief, 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 website 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 the Application

    1. Applicants request an order that would allow Funds to operate as 
index exchange traded funds (``ETFs'').\2\ Fund shares will be 
purchased and redeemed at their NAV in Creation Units (other than 
pursuant to a distribution reinvestment program, as described in the 
application). 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.
---------------------------------------------------------------------------

    \2\ Applicants request that the order apply to the current 
series of the Trust identified and described in Appendix A to the 
application (``Current Funds'') and any additional series of the 
Trust, and any other existing or future open-end management 
investment company or existing or future series thereof (together 
with the Current Funds, ``Funds''), each of which will operate as an 
ETF, and their respective existing or future Master Funds, and will 
track a specified index comprised of domestic and/or foreign equity 
securities and/or domestic and/or foreign fixed income securities 
(each, an ``Underlying Index''). Any Fund will (a) be advised by the 
Adviser or an entity controlling, controlled by, or under common 
control with the Adviser (each such entity and any successor 
thereto, an ``Adviser'') and (b) comply with the terms and 
conditions of the application. For purposes of the requested order, 
a ``successor'' is limited to an entity or entities that result from 
a reorganization into another jurisdiction or a change in the type 
of business organization.
---------------------------------------------------------------------------

    2. Each Fund will hold investment positions selected to correspond 
closely 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.\3\
---------------------------------------------------------------------------

    \3\ Each Self-Indexing Fund will post on its website 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.
---------------------------------------------------------------------------

    3. Shares will be purchased and redeemed in Creation Units and 
generally on an in-kind basis, or issued in less than Creation Unit 
size to investors participating in a distribution reinvestment program. 
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.
    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,

[[Page 35291]]

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 Exchange Act, 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 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.\4\ 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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    \4\ 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. 2018-15861 Filed 7-24-18; 8:45 am]
 BILLING CODE 8011-01-P