Advisors Asset Management, Inc. and ETF Series Solutions; Notice of Application, 36646-36647 [2018-16155]

Download as PDF 36646 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Notices IV. Solicitation of Comments 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: [FR Doc. 2018–16167 Filed 7–27–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2018–50 on the subject line. [Investment Company Act Release No. 33169; 812–14833] Advisors Asset Management, Inc. and ETF Series Solutions; Notice of Application July 24, 2018. Paper Comments Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. daltland on DSKBBV9HB2PROD with NOTICES For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.32 Eduardo A. Aleman, Assistant Secretary. All submissions should refer to File Number SR–NYSEArca–2018–50. 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 website (https://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 website 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2018–50 and should be submitted on or before August 20, 2018. Notice of an application under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from section 15(a) of the Act and rule 18f–2 under the Act, as well as from certain disclosure requirements in rule 20a–1 under the Act, Item 19(a)(3) of Form N– 1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, and Sections 6–07(2)(a), (b), and (c) of Regulation S–X (‘‘Disclosure Requirements’’). The requested exemption would permit an investment adviser to hire and replace certain subadvisers without shareholder approval and grant relief from the Disclosure Requirements as they relate to fees paid to the sub-advisers. APPLICANTS: ETF Series Solutions (the ‘‘Trust’’), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series, and Advisors Asset Management, Inc. (the ‘‘Initial Adviser’’), a Delaware corporation registered as an investment adviser under the Investment Advisers Act of 1940. FILING DATES: The application was filed on October 11, 2017 and amended on May 3, 2018. 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 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 20, 2018, and should be accompanied by proof of 32 17 VerDate Sep<11>2014 20:33 Jul 27, 2018 Jkt 244001 PO 00000 CFR 200.30–3(a)(12). Frm 00134 Fmt 4703 Sfmt 4703 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, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. Applicants: ETF Series Solutions, 615 E Michigan Street, Milwaukee, WI 53202; and Advisors Asset Management, Inc., 18925 Base Camp Road, Suite 203, Monument, CO 80132. FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior Counsel, at (202) 551–6879, or Andrea Ottomanelli Magovern, 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. The Initial Adviser is the investment adviser to the AAM S&P 500 High Dividend Value ETF and AAM S&P Emerging Markets High Dividend Value ETF (together, the ‘‘Initial Funds’’), each a series of the Trust, pursuant to an investment management agreement with the Trust (‘‘Investment Management Agreement’’).1 Under the terms of the Investment Management Agreement, the Adviser, subject to the 1 Applicants request relief with respect to the Initial Funds, as well as to any future series of the Trust and any other existing or future registered open-end management investment company or series thereof that, in each case, is advised by the Initial Adviser or any entity controlling, controlled by, or under common control with, the Initial Adviser or its successors (each, also an ‘‘Adviser’’), uses the multi-manager structure described in the application, and complies with the terms and conditions set forth in the application (each, a ‘‘Subadvised Fund’’). For purposes of the requested order, ‘‘successor’’ is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. Future Subadvised Funds may be operated as a master-feeder structure pursuant to section 12(d)(1)(E) of the Act. In such a structure, certain series of the Trust (each, a ‘‘Feeder Fund’’) may invest substantially all of their assets in a Subadvised Fund (a ‘‘Master Fund’’) pursuant to section 12(d)(1)(E) of the Act. No Feeder Fund will engage any sub-advisers other than through approving the engagement of one or more of the Master Fund’s sub-advisers. E:\FR\FM\30JYN1.SGM 30JYN1 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Notices supervision of the board of trustees of the Trust (‘‘Board’’), provides continuous investment management of the assets of each Subadvised Fund. Consistent with the terms of the Investment Management Agreement, the Adviser may, subject to the approval of the Board, delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Fund to one or more Sub-Advisers.2 The Adviser will continue to have overall responsibility for the management and investment of the assets of each Subadvised Fund. The Adviser will evaluate, select, and recommend SubAdvisers to manage the assets of a Subadvised Fund and will oversee, monitor and review the Sub-Advisers and their performance and recommend the removal or replacement of SubAdvisers. 2. Applicants request an order to permit the Adviser, subject to the approval of the Board, to enter into investment sub-advisory agreements with the Sub-Advisers (each, a ‘‘SubAdvisory Agreement’’) and materially amend such Sub-Advisory Agreements without obtaining the shareholder approval required under section 15(a) of the Act and rule 18f–2 under the Act.3 Applicants also seek an exemption from the Disclosure Requirements to permit a Subadvised Fund to disclose (as both a dollar amount and a percentage of the Subadvised Fund’s net assets): (a) The aggregate fees paid to the Adviser and any Wholly-Owned Sub-Adviser; (b) the aggregate fees paid to Non-Affiliated Sub-Advisers; and (c) the fee paid to each Affiliated Sub-Adviser (collectively, Aggregate Fee Disclosure’’).4 daltland on DSKBBV9HB2PROD with NOTICES 2 As used herein, a ‘‘Sub-Adviser’’ for a Subadvised Fund is (1) an indirect or direct ‘‘wholly owned subsidiary’’ (as such term is defined in the Act) of the Adviser for that Subadvised Fund, or (2) a sister company of the Adviser for that Subadvised Fund that is an indirect or direct ‘‘wholly-owned subsidiary’’ of the same company that, indirectly or directly, wholly owns the Adviser (each of (1) and (2) a ‘‘Wholly-Owned Sub-Adviser’’ and collectively, the ‘‘Wholly-Owned SubAdvisers’’), or (3) not an ‘‘affiliated person’’ (as such term is defined in section 2(a)(3) of the Act) of the Subadvised Fund, any Feeder Fund invested in a Master Fund, the Trust, or the Adviser, except to the extent that an affiliation arises solely because the Sub-Adviser serves as a sub-adviser to a Subadvised Fund (‘‘Non-Affiliated Sub-Advisers’’). 3 The requested relief will not extend to any subadviser, other than a Wholly-Owned Sub-Adviser, who is an affiliated person, as defined in section 2(a)(3) of the Act, of the Subadvised Fund, of any Feeder Fund, or of the Adviser, other than by reason of serving as a sub-adviser to one or more of the Subadvised Funds (‘‘Affiliated SubAdviser’’). 4 For any Subadvised Fund that is a Master Fund, the relief would also permit any Feeder Fund invested in that Master Fund to disclose Aggregate Fee Disclosure. VerDate Sep<11>2014 20:33 Jul 27, 2018 Jkt 244001 3. 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 provide for, among other safeguards, appropriate disclosure to Subadvised Funds’ shareholders and notification about sub-advisory changes and enhanced Board oversight to protect the interests of the Subadvised Funds’ shareholders. 4. Section 6(c) 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 provisions of the Act, or any rule thereunder, if such relief is necessary or appropriate in the public interest and consistent with the protection of investors and purposes fairly intended by the policy and provisions of the Act. Applicants believe that the requested relief meets this standard because, as further explained in the application, the Investment Management Agreements will remain subject to shareholder approval, while the role of the SubAdvisers is substantially equivalent to that of individual portfolio managers, so that requiring shareholder approval of Sub-Advisory Agreements would impose unnecessary delays and expenses on the Subadvised Funds. Applicants believe that the requested relief from the Disclosure Requirements meets this standard because it will improve the Adviser’s ability to negotiate fees paid to the Sub-Advisers that are more advantageous for the Subadvised Funds. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–16155 Filed 7–27–18; 8:45 am] BILLING CODE 8011–01–P PO 00000 36647 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83699; File No. SR–FINRA– 2018–026] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend the Arbitrator Payment Rule To Pay Each Arbitrator a $200 Honorarium To Decide Without a Hearing Session a Contested Subpoena Request or a Contested Order for Production or Appearance July 24, 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 13, 2018, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. 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 FINRA is proposing to amend FINRA Rule 12214(c) of the Code of Arbitration Procedure for Customer Disputes (‘‘Customer Code’’) and FINRA Rule 13214(c) through (e) of the Code of Arbitration Procedure for Industry Disputes (‘‘Industry Code’’ and together, ‘‘Codes’’), to provide that FINRA will pay each arbitrator a $200 honorarium to decide without a hearing session a contested subpoena request or a contested order for production or appearance. The text of the proposed rule change is available on FINRA’s website at https://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA has prepared 1 15 2 17 Frm 00135 Fmt 4703 Sfmt 4703 E:\FR\FM\30JYN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 30JYN1

Agencies

[Federal Register Volume 83, Number 146 (Monday, July 30, 2018)]
[Notices]
[Pages 36646-36647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16155]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33169; 812-14833]


Advisors Asset Management, Inc. and ETF Series Solutions; Notice 
of Application

July 24, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

    Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 15(a) of 
the Act and rule 18f-2 under the Act, as well as from certain 
disclosure requirements in rule 20a-1 under the Act, Item 19(a)(3) of 
Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 
Schedule 14A under the Securities Exchange Act of 1934, and Sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements''). 
The requested exemption would permit an investment adviser to hire and 
replace certain sub-advisers without shareholder approval and grant 
relief from the Disclosure Requirements as they relate to fees paid to 
the sub-advisers.

Applicants:  ETF Series Solutions (the ``Trust''), a Delaware statutory 
trust registered under the Act as an open-end management investment 
company with multiple series, and Advisors Asset Management, Inc. (the 
``Initial Adviser''), a Delaware corporation registered as an 
investment adviser under the Investment Advisers Act of 1940.

Filing Dates:  The application was filed on October 11, 2017 and 
amended on May 3, 2018.

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 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 20, 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, U.S. Securities and Exchange Commission, 100 F 
Street NE, Washington, DC 20549-1090. Applicants: ETF Series Solutions, 
615 E Michigan Street, Milwaukee, WI 53202; and Advisors Asset 
Management, Inc., 18925 Base Camp Road, Suite 203, Monument, CO 80132.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or Andrea Ottomanelli Magovern, 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. The Initial Adviser is the investment adviser to the AAM S&P 500 
High Dividend Value ETF and AAM S&P Emerging Markets High Dividend 
Value ETF (together, the ``Initial Funds''), each a series of the 
Trust, pursuant to an investment management agreement with the Trust 
(``Investment Management Agreement'').\1\ Under the terms of the 
Investment Management Agreement, the Adviser, subject to the

[[Page 36647]]

supervision of the board of trustees of the Trust (``Board''), provides 
continuous investment management of the assets of each Subadvised Fund. 
Consistent with the terms of the Investment Management Agreement, the 
Adviser may, subject to the approval of the Board, delegate portfolio 
management responsibilities of all or a portion of the assets of a 
Subadvised Fund to one or more Sub-Advisers.\2\ The Adviser will 
continue to have overall responsibility for the management and 
investment of the assets of each Subadvised Fund. The Adviser will 
evaluate, select, and recommend Sub-Advisers to manage the assets of a 
Subadvised Fund and will oversee, monitor and review the Sub-Advisers 
and their performance and recommend the removal or replacement of Sub-
Advisers.
---------------------------------------------------------------------------

    \1\ Applicants request relief with respect to the Initial Funds, 
as well as to any future series of the Trust and any other existing 
or future registered open-end management investment company or 
series thereof that, in each case, is advised by the Initial Adviser 
or any entity controlling, controlled by, or under common control 
with, the Initial Adviser or its successors (each, also an 
``Adviser''), uses the multi-manager structure described in the 
application, and complies with the terms and conditions set forth in 
the application (each, a ``Subadvised Fund''). For purposes of the 
requested order, ``successor'' is limited to an entity that results 
from a reorganization into another jurisdiction or a change in the 
type of business organization. Future Subadvised Funds may be 
operated as a master-feeder structure pursuant to section 
12(d)(1)(E) of the Act. In such a structure, certain series of the 
Trust (each, a ``Feeder Fund'') may invest substantially all of 
their assets in a Subadvised Fund (a ``Master Fund'') pursuant to 
section 12(d)(1)(E) of the Act. No Feeder Fund will engage any sub-
advisers other than through approving the engagement of one or more 
of the Master Fund's sub-advisers.
    \2\ As used herein, a ``Sub-Adviser'' for a Subadvised Fund is 
(1) an indirect or direct ``wholly owned subsidiary'' (as such term 
is defined in the Act) of the Adviser for that Subadvised Fund, or 
(2) a sister company of the Adviser for that Subadvised Fund that is 
an indirect or direct ``wholly-owned subsidiary'' of the same 
company that, indirectly or directly, wholly owns the Adviser (each 
of (1) and (2) a ``Wholly-Owned Sub-Adviser'' and collectively, the 
``Wholly-Owned Sub-Advisers''), or (3) not an ``affiliated person'' 
(as such term is defined in section 2(a)(3) of the Act) of the 
Subadvised Fund, any Feeder Fund invested in a Master Fund, the 
Trust, or the Adviser, except to the extent that an affiliation 
arises solely because the Sub-Adviser serves as a sub-adviser to a 
Subadvised Fund (``Non-Affiliated Sub-Advisers'').
---------------------------------------------------------------------------

    2. Applicants request an order to permit the Adviser, subject to 
the approval of the Board, to enter into investment sub-advisory 
agreements with the Sub-Advisers (each, a ``Sub-Advisory Agreement'') 
and materially amend such Sub-Advisory Agreements without obtaining the 
shareholder approval required under section 15(a) of the Act and rule 
18f-2 under the Act.\3\ Applicants also seek an exemption from the 
Disclosure Requirements to permit a Subadvised Fund to disclose (as 
both a dollar amount and a percentage of the Subadvised Fund's net 
assets): (a) The aggregate fees paid to the Adviser and any Wholly-
Owned Sub-Adviser; (b) the aggregate fees paid to Non-Affiliated Sub-
Advisers; and (c) the fee paid to each Affiliated Sub-Adviser 
(collectively, Aggregate Fee Disclosure'').\4\
---------------------------------------------------------------------------

    \3\ The requested relief will not extend to any sub-adviser, 
other than a Wholly-Owned Sub-Adviser, who is an affiliated person, 
as defined in section 2(a)(3) of the Act, of the Subadvised Fund, of 
any Feeder Fund, or of the Adviser, other than by reason of serving 
as a sub-adviser to one or more of the Subadvised Funds 
(``Affiliated Sub-Adviser'').
    \4\ For any Subadvised Fund that is a Master Fund, the relief 
would also permit any Feeder Fund invested in that Master Fund to 
disclose Aggregate Fee Disclosure.
---------------------------------------------------------------------------

    3. 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 provide for, among other safeguards, 
appropriate disclosure to Subadvised Funds' shareholders and 
notification about sub-advisory changes and enhanced Board oversight to 
protect the interests of the Subadvised Funds' shareholders.
    4. Section 6(c) 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 provisions of the Act, or 
any rule thereunder, if such relief is necessary or appropriate in the 
public interest and consistent with the protection of investors and 
purposes fairly intended by the policy and provisions of the Act. 
Applicants believe that the requested relief meets this standard 
because, as further explained in the application, the Investment 
Management Agreements will remain subject to shareholder approval, 
while the role of the Sub-Advisers is substantially equivalent to that 
of individual portfolio managers, so that requiring shareholder 
approval of Sub-Advisory Agreements would impose unnecessary delays and 
expenses on the Subadvised Funds. Applicants believe that the requested 
relief from the Disclosure Requirements meets this standard because it 
will improve the Adviser's ability to negotiate fees paid to the Sub-
Advisers that are more advantageous for the Subadvised Funds.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-16155 Filed 7-27-18; 8:45 am]
 BILLING CODE 8011-01-P
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