Beyond Advisors IC, et al., 54151-54153 [2018-23376]

Download as PDF 54151 Federal Register / Vol. 83, No. 208 / Friday, October 26, 2018 / Notices Name of applicant organization khammond on DSK30JT082PROD with NOTICES Legal Aid Services of Oregon ................................................................................................................................ Legal Aid Services of Oregon ................................................................................................................................ Legal Aid Services of Oregon ................................................................................................................................ Philadelphia Legal Assistance Center .................................................................................................................... Philadelphia Legal Assistance Center .................................................................................................................... Southwestern Pennsylvania Legal Services .......................................................................................................... Legal Aid of Southeastern Pennsylvania ............................................................................................................... North Penn Legal Services ..................................................................................................................................... MidPenn Legal Services ......................................................................................................................................... Northwestern Legal Services .................................................................................................................................. Laurel Legal Services ............................................................................................................................................. Neighborhood Legal Services Association ............................................................................................................. Puerto Rico Legal Services .................................................................................................................................... Puerto Rico Legal Services .................................................................................................................................... Community Law Office ........................................................................................................................................... Rhode Island Legal Services .................................................................................................................................. South Carolina Legal Services ............................................................................................................................... South Carolina Legal Services ............................................................................................................................... Dakota Plains Legal Services ................................................................................................................................. East River Legal Services ...................................................................................................................................... Dakota Plains Legal Services ................................................................................................................................. Legal Aid Society of Middle TN and the Cumberlands .......................................................................................... Memphis Area Legal Services ................................................................................................................................ West Tennessee Legal Services ............................................................................................................................ Legal Aid of East Tennessee ................................................................................................................................. Texas RioGrande Legal Aid ................................................................................................................................... Texas RioGrande Legal Aid ................................................................................................................................... Lone Star Legal Aid ................................................................................................................................................ Legal Aid of NorthWest Texas ............................................................................................................................... Texas RioGrande Legal Aid ................................................................................................................................... Utah Legal Services ............................................................................................................................................... Utah Legal Services ............................................................................................................................................... Utah Legal Services ............................................................................................................................................... Central Virginia Legal Aid Society .......................................................................................................................... Southwest Virginia Legal Aid Society ..................................................................................................................... Legal Aid Society of Eastern Virginia ..................................................................................................................... Virginia Legal Aid Society ....................................................................................................................................... Central Virginia Legal Aid Society .......................................................................................................................... Blue Ridge Legal Services ..................................................................................................................................... Legal Services of Northern Virginia ........................................................................................................................ Legal Services of the Virgin Islands ....................................................................................................................... Legal Services Law Line of Vermont ..................................................................................................................... Northwest Justice Project ....................................................................................................................................... Northwest Justice Project ....................................................................................................................................... Northwest Justice Project ....................................................................................................................................... Legal Action of Wisconsin ...................................................................................................................................... Wisconsin Judicare ................................................................................................................................................. Wisconsin Judicare ................................................................................................................................................. Legal Action of Wisconsin ...................................................................................................................................... Legal Aid of West Virginia ...................................................................................................................................... Legal Aid of Wyoming ............................................................................................................................................ Legal Aid of Wyoming ............................................................................................................................................ These grants will be awarded under the authority conferred on LSC by section 1006(a)(1) of the Legal Services Corporation Act, 42 U.S.C. 2996e(a)(l). Awards will be made so that each service area is served, although no listed organization is guaranteed an award. Grants will become effective and grant funds will be distributed on or about January 1, 2019. This notice is issued pursuant to 42 U.S.C. 2996f(f). Comments and recommendations concerning potential grantees are invited and should be VerDate Sep<11>2014 18:32 Oct 25, 2018 Jkt 247001 State Service area OR OR OR PA PA PA PA PA PA PA PA PA PR PR PR RI SC SC SD SD SD TN TN TN TN TX TX TX TX TX UT UT UT VA VA VA VA VA VA VA VI VT WA WA WA WI WI WI WI WV WY WY MOR NOR–1 OR–6 MPA PA–1 PA–11 PA–23 PA–24 PA–25 PA–26 PA–5 PA–8 MPR PR–1 PR–2 RI–1 MSC SC–8 NSD–1 SD–2 SD–4 TN–10 TN–4 TN–7 TN–9 MSX–2 NTX–1 TX–13 TX–14 TX–15 MUT NUT–1 UT–1 MVA VA–15 VA–16 VA–17 VA–18 VA–19 VA–20 VI–1 VT–1 MWA NWA–1 WA–1 MWI NWI–1 WI–2 WI–5 WV–5 NWY–1 WY–4 Estimated annualized 2019 funding 535,226 202,768 3,896,236 214,797 3,204,335 424,853 1,365,547 2,037,974 2,644,519 747,015 684,616 1,433,575 64,688 11,818,285 215,933 967,489 155,528 6,038,140 1,025,591 430,728 467,961 3,125,749 1,550,924 714,802 2,523,870 1,943,157 34,378 12,034,312 9,145,325 11,501,517 92,972 90,366 2,349,840 187,615 867,059 1,570,775 808,012 1,310,918 861,283 1,597,692 194,590 521,364 707,725 312,902 5,899,908 400,274 170,387 1,009,735 3,858,281 2,770,204 189,810 527,640 delivered to LSC within 30 days from the date of publication of this notice. SECURITIES AND EXCHANGE COMMISSION Dated: October 22, 2018. Stefanie Davis, Assistant General Counsel. [Investment Company Act Release No. 33277; 812–14936] [FR Doc. 2018–23406 Filed 10–25–18; 8:45 am] Beyond Advisors IC, et al. BILLING CODE 7050–01–P October 22, 2018. PO 00000 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 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\26OCN1.SGM 26OCN1 54152 Federal Register / Vol. 83, No. 208 / Friday, October 26, 2018 / Notices 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 companies (‘‘Funds’’) to issue shares redeemable in large aggregations only (‘‘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; and (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. Beyond Advisors IC (the ‘‘Initial Adviser’’), a Jersey incorporated cell company that will be registered as an investment adviser under the Investment Advisers Act of 1940, ETF Series Solutions (the ‘‘Trust’’), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series, and Quasar Distributors, LLC, a Delaware limited liability company and broker-dealer registered under the Securities Exchange Act of 1934 (‘‘Exchange Act’’). APPLICANTS: The application was filed on August 2, 2018. FILING DATES: 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 November 16, 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 khammond on DSK30JT082PROD with NOTICES HEARING OR NOTIFICATION OF HEARING: VerDate Sep<11>2014 19:57 Oct 25, 2018 Jkt 247001 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: Beyond Advisors IC, Digital Hub Jersey, Block 3, Ground Floor, Grenville Street, St Helier, Jersey, JE2 4UF; ETF Series Solutions, 615 East Michigan Street, Milwaukee, Wisconsin 53202; Quasar Distributors, LLC, 777 East Wisconsin Avenue, 6th Floor, Milwaukee, Wisconsin 53202. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at (202) 551–6817, or Kaitlin C. Bottock, 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 https:// 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’’).1 Fund shares will be purchased and redeemed at their NAV in Creation Units only. 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. 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 generally to the performance of an 1 Applicants request that the order apply to Beyond Advisors US Vegan Climate ETF (the ‘‘Initial Fund’’), a new series of the Trust, and any additional series of the Trust, and any other openend management investment company or series thereof (‘‘Future Funds’’ and together with the Initial Fund, ‘‘Funds’’), each of which will operate as an ETF 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’’). Each Fund will (a) be advised by the Initial Adviser or an entity controlling, controlled by, or under common control with the Initial 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, ‘‘successor’’ is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 Underlying Index. In the case of SelfIndexing Funds, an affiliated person, as defined in section 2(a)(3) of the Act (‘‘Affiliated Person’’), or an affiliated person of an Affiliated Person (‘‘SecondTier 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.2 3. Shares will be purchased and redeemed in Creation Units and generally on an in-kind basis. 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 only. 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, 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 2 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\26OCN1.SGM 26OCN1 khammond on DSK30JT082PROD with NOTICES Federal Register / Vol. 83, No. 208 / Friday, October 26, 2018 / Notices 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.3 3 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 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 VerDate Sep<11>2014 18:32 Oct 25, 2018 Jkt 247001 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. 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. 2018–23376 Filed 10–25–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84462; File No. SR– NYSEArca–2018–25] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, Regarding the Continued Listing and Trading of Shares of the Natixis Loomis Sayles Short Duration Income ETF October 22, 2018. On April 16, 2018, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant 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 00074 Fmt 4703 Sfmt 4703 54153 to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to continue listing and trading shares of the Natixis Loomis Sayles Short Duration Income ETF under NYSE Arca Rule 8.600–E, Managed Fund Shares.3 The proposed rule change was published for comment in the Federal Register on May 3, 2018.4 On June 5, 2018, pursuant to Section 19(b)(2) of the Act,5 the Commission designated August 1, 2018 as the date by which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.6 On June 6, 2018, the Exchange filed Amendment No. 1 to the proposed rule change.7 On July 27, 2018, the Commission instituted proceedings to determine whether to approve or disapprove the proposed rule change.8 The Commission has received no comments on the proposed rule change. Section 19(b)(2) of the Act 9 provides that, after initiating disapproval proceedings, the Commission shall issue an order approving or disapproving the proposed rule change not later than 180 days after the date of publication of notice of filing of the proposed rule change. The Commission may extend the period for issuing an order approving or disapproving the proposed rule change, however, by not more than 60 days if the Commission determines that a longer period is appropriate and publishes the reasons for such determination. The proposed rule change was published for notice and comment in the Federal Register on May 3, 2018. October 30, 2018 is 180 days from that date, and December 29, 2018 is 240 days from that date. The Commission finds it appropriate to designate a longer period within which to issue an order approving or 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Currently, the Exchange lists and trades the shares pursuant to NYSE Arca Rule 8.600–E. As discussed in Amendment No. 1, infra note 7, the Exchange submitted this proposed rule change to permit the fund’s portfolio to deviate from two of the ‘‘generic’’ listing requirements applicable to Managed Fund Shares. 4 See Securities Exchange Act Release No. 83122 (April 27, 2018), 83 FR 19578. 5 15 U.S.C. 78s(b)(2). 6 See Securities Exchange Act Release No. 83385, 83 FR 27034 (June 11, 2018). 7 Amendment No. 1, which amended and replaced the proposed rule change in its entirety, is available at: https://www.sec.gov/comments/srnysearca-2018-25/nysearca201825-3795048162717.pdf. 8 See Securities Exchange Act Release No. 83733, 83 FR 37831 (August 2, 2018). 9 15 U.S.C. 78s(b)(2). 2 17 E:\FR\FM\26OCN1.SGM 26OCN1

Agencies

[Federal Register Volume 83, Number 208 (Friday, October 26, 2018)]
[Notices]
[Pages 54151-54153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-23376]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33277; 812-14936]


Beyond Advisors IC, et al.

October 22, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') for an

[[Page 54152]]

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 companies 
(``Funds'') to issue shares redeemable in large aggregations only 
(``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; and (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.

Applicants: Beyond Advisors IC (the ``Initial Adviser''), a Jersey 
incorporated cell company that will be registered as an investment 
adviser under the Investment Advisers Act of 1940, ETF Series Solutions 
(the ``Trust''), a Delaware statutory trust registered under the Act as 
an open-end management investment company with multiple series, and 
Quasar Distributors, LLC, a Delaware limited liability company and 
broker-dealer registered under the Securities Exchange Act of 1934 
(``Exchange Act'').

Filing Dates: The application was filed on August 2, 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 November 16, 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: Beyond Advisors IC, Digital 
Hub Jersey, Block 3, Ground Floor, Grenville Street, St Helier, Jersey, 
JE2 4UF; ETF Series Solutions, 615 East Michigan Street, Milwaukee, 
Wisconsin 53202; Quasar Distributors, LLC, 777 East Wisconsin Avenue, 
6th Floor, Milwaukee, Wisconsin 53202.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at 
(202) 551-6817, or Kaitlin C. Bottock, 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 https://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'').\1\ Fund shares will be 
purchased and redeemed at their NAV in Creation Units only. 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. Any order 
granting the requested relief would be subject to the terms and 
conditions stated in the application.
---------------------------------------------------------------------------

    \1\ Applicants request that the order apply to Beyond Advisors 
US Vegan Climate ETF (the ``Initial Fund''), a new series of the 
Trust, and any additional series of the Trust, and any other open-
end management investment company or series thereof (``Future 
Funds'' and together with the Initial Fund, ``Funds''), each of 
which will operate as an ETF 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''). Each Fund will (a) be advised by the Initial 
Adviser or an entity controlling, controlled by, or under common 
control with the Initial 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, 
``successor'' is limited to an entity that results 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 
generally 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.\2\
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    \2\ 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. 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 only.
    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, 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

[[Page 54153]]

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.\3\ 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.
---------------------------------------------------------------------------

    \3\ 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 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.
---------------------------------------------------------------------------

    9. 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. 2018-23376 Filed 10-25-18; 8:45 am]
 BILLING CODE 8011-01-P
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