Yleana Advisors, LLC and Yleana Trust, 3263-3265 [2019-01887]

Download as PDF 3263 Federal Register / Vol. 84, No. 28 / Monday, February 11, 2019 / Notices III. Finding of No Significant Impact The licensee has requested license amendments pursuant to 10 CFR 50.90, Application for amendment of license, construction permit, or early site permit, to revise the WBN, Unit 2 TSs to allow up to 1,792 TPBARs to be irradiated in the reactor core. The license amendments also provide proposed changes for both the WBN, Units 1 and 2 TSs related to the new criticality analyses performed for the spent fuel storage racks to allow the proper safe handling and storage of spent fuel, including TPBARs, at the WBN site. The NRC is considering issuing the requested amendments. The proposed action would not significantly affect plant safety, would not have a significant adverse effect on the probability of an accident occurring, and would not have any significant radiological or nonradiological impacts. The reason the environment would not be significantly affected is because while the proposed changes would result in increased radiological plant effluents and offsite doses, those numbers would still be within the regulatory limits as stated in 10 CFR part 20 and design objectives in appendix I to 10 CFR part 50. This FONSI incorporates by reference the EA in Section II of this notice. Therefore, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined there is no need to prepare an environmental impact statement for the proposed action. Previous considerations regarding the environmental impacts of operating Watts Bar, Units 1 and 2, in accordance with their operating licenses, are described in NUREG–0498, Final Environmental Statement Related to Operation of Watts Bar Nuclear Plant, Units 1 and 2, dated December 1978, and NUREG–0498, Supplement 1, dated April 1995, and NUREG–0498, Supplement 2, Final Environmental Statement Related to Operation of Watts Bar Nuclear Plant, Unit 2, dated May 2013 (ADAMS Package Accession Nos. ML082540803, ML081430592, and ML13144A092). This FONSI and other related environmental documents may be examined, and/or copied for a fee, at the NRC’s PDR, located at One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852. Publicly-available records are also accessible online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/ adams.html. Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC’s PDR reference staff by telephone at 1–800–397–4209 or 301–415–4737, or by email to pdr.resource@nrc.gov. IV. Availability of Documents The documents identified in the following table are available to interested persons through ADAMS. Document ADAMS accession No. NUREG–0498—Final Environmental Statement Related to Operation of Watts Bar Nuclear Plant, Units 1 and 2, dated December 1978. NUREG–0498—Final Environmental Statement Related to the Operation of Watts Bar Nuclear Plant, Units 1 and 2, Supplement 1, dated April 1995. NUREG–0498—Final Environmental Statement Related to the Operation of Watts Bar Nuclear Plant, Unit 2, Supplement 2, dated May 2013. Watts Bar Nuclear Plant, Unit 1: Environmental Assessment and Finding of No Significant Impact Related to License Amendment Request to Revise Technical Specification 4.2.1, Fuel Assemblies, dated June 23, 2016. TVA letter to NRC, Application to Revise Watts Bar Unit 2 Technical Specification 4.2.1, Fuel Assemblies, and Watts Bar Units 1 and 2 Technical Specifications Related to Fuel Storage (WBN–TS–17–028), dated December 20, 2017. TVA letter to NRC, Correction to Application to Revise Watts Bar Unit 2 Technical Specification 4.2.1, Fuel Assemblies, and Watts Bar Units 1 and 2 Technical Specifications Related to Fuel Storage (WBN–TS–17–028), dated April 9, 2018. TVA letter to NRC, Response to Request for Additional Information Regarding Application to Revise Watts Bar Unit 2 Technical Specification 4.2.1, Fuel Assemblies, and Watts Bar Units 1 and 2 Technical Specifications Related to Fuel Storage (WBN– TS–17–028) (EPID L–2017–LLA–0427), dated October 4, 2018. WBN Offsite Dose Calculation Manual, as documented in the Watts Bar Nuclear Plant Annual Radioactive Effluent Release Report—2017, dated April 30, 2018. ML082540803 Dated at Rockville, Maryland, this 6th day of February 2019. For the Nuclear Regulatory Commission. John G. Lamb, Senior Project Manager, Special Projects and Process Branch, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. SECURITIES AND EXCHANGE COMMISSION [FR Doc. 2019–01859 Filed 2–8–19; 8:45 am] AGENCY: BILLING CODE 7590–01–P [Investment Company Act Release No. 33368; 812–14965] Yleana Advisors, LLC and Yleana Trust February 6, 2019. 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 VerDate Sep<11>2014 18:05 Feb 08, 2019 Jkt 247001 PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 ML081430592 ML13144A092 ML16138A045 ML17354B282 ML18100A953 ML18283A107 ML18120A138 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 (‘‘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 E:\FR\FM\11FEN1.SGM 11FEN1 3264 Federal Register / Vol. 84, No. 28 / Monday, February 11, 2019 / Notices 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. APPLICANTS: Yleana Trust (the ‘‘Trust’’), a Delaware statutory trust, which is registered under the Act as an open-end management investment company with multiple series, and Yleana Advisors, LLC (the ‘‘Initial Adviser’’), a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940. FILING DATES: The application was filed on October 16, 2018, and amended on December 31, 2018 and January 31, 2019. 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 March 4, 2019, 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: Allison M. Fumai, Esq. and Stuart M. Strauss, Esq., Dechert LLP, 1095 Avenue of the Americas, New York, New York 10036. FOR FURTHER INFORMATION CONTACT: Jill Corrigan, Senior Counsel, at (202) 551– 8929, or Parisa Haghshenas, Branch Chief, at (202) 551–6723 (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. VerDate Sep<11>2014 18:05 Feb 08, 2019 Jkt 247001 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 (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 masterfeeder 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.2 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 1 Applicants request that the order apply to the Initial Fund and any additional series of the Trust, and any other existing or future open-end management investment company or existing or future series thereof (each, included in the term ‘‘Fund’’), 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 Initial Adviser or an entity controlling, controlled by, or under common control with the Initial Adviser (each of the foregoing 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 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. PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 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 (other than pursuant to a dividend reinvestment program). 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 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 E:\FR\FM\11FEN1.SGM 11FEN1 Federal Register / Vol. 84, No. 28 / Monday, February 11, 2019 / Notices 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. 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 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, 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. VerDate Sep<11>2014 18:05 Feb 08, 2019 Jkt 247001 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, Deputy Secretary. [FR Doc. 2019–01887 Filed 2–8–19; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–85052; File No. SR–BOX– 2019–01] Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify That Multi-Leg Qualified Open Outcry Orders Are Permitted on the BOX Trading Floor February 5, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 30, 2019, BOX Exchange LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00129 Fmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to make multi-leg QOO Orders available on the BOX Trading Floor. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s internet website at https:// boxoptions.com. 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 self-regulatory organization 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 self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION 1 15 3265 In August 2017, the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) approved the Exchange’s proposal to adopt rules for an open outcry trading floor.3 Among the approved rules was BOX Rule 7600(a)(4) which stated that ‘‘QOO Orders may be multi-leg orders up to four (4) legs, including Complex Orders as defined in Rule 7240(a)(5) and tied to hedge orders as defined in IM–7600– 2.’’ 4 The Exchange notes that while this 3 See Securities Exchange Act Release No. 81292 (August 2, 2017), 82 FR 37144 (August 8, 2017) (Order Approving a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To Adopt Rules for an Open-Outcry Trading Floor). 4 The Exchange notes it recently amended this rule to provide the ability for the Exchange to determine the applicable number of legs for a Complex QOO Order. See Securities Exchange Act Release No. 84340 (October 2, 2018), 83 FR 50718 (October 9, 2018) (Notice of Filing and Immediate Effectiveness SR–BOX–2018–30). In this filing, the Exchange stated that only orders that meet the definition of a Complex Order are allowed to trade on the BOX Trading Floor. The Exchange now proposes, due to technology enhancements, to make such multi-leg QOO Orders that do not meet the definition of a Complex Order available on the BOX Trading Floor. Upon approval, multi-leg QOO orders that are entered into the system will be accepted and executed pursuant to Rule 7600(c). The Exchange notes that Complex Order priority provisions do not apply to multi-leg QOO Orders. Continued Sfmt 4703 E:\FR\FM\11FEN1.SGM 11FEN1

Agencies

[Federal Register Volume 84, Number 28 (Monday, February 11, 2019)]
[Notices]
[Pages 3263-3265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01887]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33368; 812-14965]


Yleana Advisors, LLC and Yleana Trust

February 6, 2019.
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 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 
(``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

[[Page 3264]]

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.

Applicants: Yleana Trust (the ``Trust''), a Delaware statutory trust, 
which is registered under the Act as an open-end management investment 
company with multiple series, and Yleana Advisors, LLC (the ``Initial 
Adviser''), a Delaware limited liability company registered as an 
investment adviser under the Investment Advisers Act of 1940.

Filing Dates: The application was filed on October 16, 2018, and 
amended on December 31, 2018 and January 31, 2019.

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 March 4, 2019, 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: Allison M. Fumai, Esq. and 
Stuart M. Strauss, Esq., Dechert LLP, 1095 Avenue of the Americas, New 
York, New York 10036.

FOR FURTHER INFORMATION CONTACT: Jill Corrigan, Senior Counsel, at 
(202) 551-8929, or Parisa Haghshenas, Branch Chief, at (202) 551-6723 
(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 (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.
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    \1\ Applicants request that the order apply to the Initial Fund 
and any additional series of the Trust, and any other existing or 
future open-end management investment company or existing or future 
series thereof (each, included in the term ``Fund''), 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 Initial Adviser or an entity controlling, 
controlled by, or under common control with the Initial Adviser 
(each of the foregoing 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.
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    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.\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.
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    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 (other than pursuant to a dividend reinvestment program).
    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 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

[[Page 3265]]

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, 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,
Deputy Secretary.
[FR Doc. 2019-01887 Filed 2-8-19; 8:45 am]
 BILLING CODE 8011-01-P
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