MassMutual Select Funds, et al., 57926-57928 [2019-23554]

Download as PDF 57926 Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices (44 U.S.C. 3501 et seq.) (‘‘PRA’’) the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for extension of the previously approved collection of information discussed below. Section 17(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) (the ‘‘Act’’), generally prohibits affiliated persons of a registered investment company (‘‘fund’’) from borrowing money or other property from, or selling or buying securities or other property to or from, the fund or any company that the fund controls.1 Section 2(a)(3) of the Act defines ‘‘affiliated person’’ of a fund to include its investment advisers.2 Rule 17a–10 (17 CFR 270.17a–10) permits (i) a subadviser 3 of a fund to enter into transactions with funds the subadviser does not advise but that are affiliated persons of a fund that it does advise (e.g., other funds in the fund complex), and (ii) a subadviser (and its affiliated persons) to enter into transactions and arrangements with funds the subadviser does advise, but only with respect to discrete portions of the subadvised fund for which the subadviser does not provide investment advice. To qualify for the exemptions in rule 17a–10, the subadvisory relationship must be the sole reason why section 17(a) prohibits the transaction. In addition, the advisory contracts of the subadviser entering into the transaction, and any subadviser that is advising the purchasing portion of the fund, must prohibit the subadvisers from consulting with each other concerning securities transactions of the fund, and limit their responsibility to providing advice with respect to discrete portions of the fund’s portfolio.4 This requirement regarding the prohibitions and limitations in advisory contracts of subadvisors relying on the rule constitutes a collection of information under the PRA.5 The staff assumes that all existing funds with subadvisory contracts amended those contracts to comply with the adoption of rule 17a–10 in 2003, which conditioned certain exemptions upon these contractual alterations, and therefore there is no continuing burden for those funds.6 However, the staff 1 15 U.S.C. 80a–17(a). U.S.C. 80a–2(a)(3)(E). 3 As defined in rule 17a–10(b)(2). 17 CFR 270.17a–10(b)(2). 4 17 CFR 270.17a–10(a)(2). 5 44 U.S.C. 3501. 6 Transactions of Investment Companies With Portfolio and Subadviser Affiliates, Investment Company Act Release No. 25888 (Jan. 14, 2003) [68 FR 3153 (Jan. 22, 2003)]. We assume that funds 2 15 VerDate Sep<11>2014 17:05 Oct 28, 2019 Jkt 250001 assumes that all newly formed subadvised funds, and funds that enter into new contracts with subadvisers, will incur the one-time burden by amending their contracts to add the terms required by the rule. Based on an analysis of fund filings, the staff estimates that approximately 221 funds enter into new subadvisory agreements each year.7 Based on discussions with industry representatives, the staff estimates that it will require approximately 3 attorney hours to draft and execute additional clauses in new subadvisory contracts in order for funds and subadvisers to be able to rely on the exemptions in rule 17a–10. Because these additional clauses are identical to the clauses that a fund would need to insert in their subadvisory contracts to rely on rules 10f–3 (17 CFR 270.10f–3), 12d3–1 (17 CFR 270.12d3–1), and 17e–1 (17 CFR 270.17e–1), and because we believe that funds that use one such rule generally use all of these rules, we apportion this 3 hour time burden equally among all four rules. Therefore, we estimate that the burden allocated to rule 17a–10 for this contract change would be 0.75 hours.8 Assuming that all 221 funds that enter into new subadvisory contracts each year make the modification to their contract required by the rule, we estimate that the rule’s contract modification requirement will result in 166 burden hours annually, with an associated cost of approximately $68,890.9 The estimate of average burden hours is made solely for the purposes of the formed after 2003 that intended to rely on rule 17a– 10 would have included the required provision as a standard element in their initial subadvisory contracts. 7 Based on data from Morningstar, as of March 2019, there are 12,407 registered funds (open-end funds, closed-end funds (including interval funds), and exchange-traded funds), 4,609 funds of which have subadvisory relationships (approximately 37%). Based on data from the 2019 ICI publications, 597 new funds were established in 2018 (582 openend funds and exchange-traded funds (from the 2019 ICI Fact Book) + 15 closed-end funds (from the ICI Research Perspective, April 2019)). 597 new funds × 37% = 221 funds. 8 This estimate is based on the following calculation: 3 hours ÷ 4 rules = 0.75 hours. 9 These estimates are based on the following calculations: (0.75 hours × 221 portfolios = 166 burden hours); ($415 per hour × 166 hours = $68,890 total cost). The Commission’s estimates concerning the wage rates for attorney time are based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association. The estimated wage figure is based on published rates for in-house attorneys, modified to account for a 1,800-hour work-year and inflation, and multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead, yielding an effective hourly rate of $415. See Securities Industry and Financial Markets Association, Report on Management & Professional Earnings in the Securities Industry 2013. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 PRA. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Complying with this collection of information requirement is necessary to obtain the benefit of relying on rule 17a–10. Responses will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following website, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549 or send an email to: PRA_ Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: October 24, 2019. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–23599 Filed 10–28–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33675; File No. 812–15052] MassMutual Select Funds, et al. October 23, 2019. Securities and Exchange Commission (the ‘‘Commission’’). ACTION: Notice. AGENCY: Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 12(d)(1)(A), (B), and (C) of the Act, and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act. The requested order would permit certain registered open-end investment companies to acquire shares of certain registered open-end investment companies, registered closed-end investment companies, and business development companies (‘‘BDCs’’), as defined in section 2(a)(48) of the Act, and registered unit E:\FR\FM\29OCN1.SGM 29OCN1 Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices investment trusts (‘‘UITs’’) (collectively, the ‘‘Underlying Funds’’) that are within and outside the same group of investment companies as the acquiring investment companies, in excess of the limits in section 12(d)(1) of the Act. APPLICANTS: MassMutual Select Funds, MassMutual Premier Funds, MML Series Investment Fund, and MML Series Investment Fund II (each a ‘‘Trust,’’ and collectively, the ‘‘Trusts’’), is each organized as a Massachusetts business trust and registered with the Commission under the Act as an openend management investment company with multiple series, each of which has its own investment objectives and principal investment strategies. MML Investment Advisers, LLC, the adviser to the Trusts, is organized as a limited liability company established under the laws of the state of Delaware and is registered as an investment adviser under section 203 of the Investment Advisers Act of 1940. FILING DATES: The application was filed on July 26, 2019, and amended on October 17, 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 November 18, 2019, and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. Applicants: Andrew M. Goldberg, Esq., MML Investment Advisers, LLC, 100 Bright Meadow Blvd., Enfield, CT 06082, with copies to Timothy W. Diggins, Esq. and Yana D. Guss, Esq., Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston, MA 02199– 3600. FOR FURTHER INFORMATION CONTACT: Edward J. Rubenstein, Senior Special Counsel, at (202) 551–6854, or Nadya B. Roytblat, Assistant Chief Counsel, at (202) 551–6823 (Division of Investment Management, Chief Counsel’s Office). VerDate Sep<11>2014 17:05 Oct 28, 2019 Jkt 250001 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. SUPPLEMENTARY INFORMATION: Summary of the Application 1. Applicants request an order to permit (a) each Fund 1 (and each a ‘‘Fund of Funds’’) to acquire shares of Underlying Funds 2 in excess of the limits in sections 12(d)(1)(A) and (C) of the Act, and (b) each Underlying Fund that is a registered open-end management investment company or series thereof, their principal underwriters, and any broker or dealer registered under the 1934 Act to sell shares of the Underlying Funds to the Fund of Funds in excess of the limits in section 12(d)(1)(B) of the Act.3 Applicants also request that the Commission issue an order under sections 6(c) and 17(b) of the Act from the prohibition on certain affiliated transactions in section 17(a) of the Act to the extent necessary to permit the Underlying Funds to sell their shares to, and redeem their shares from, the Funds of Funds.4 Applicants state that such 1 Applicants request that the order apply not only to the existing series of the Trusts (the ‘‘Existing Funds’’), but that the order also extend to any future series of each Trust and any other existing or future registered open-end management investment companies and any series thereof that are part of the same ‘‘group of investment companies,’’ as defined in section 12(d)(1)(G)(ii) of the Act, as the Trusts are, or may in the future be, advised by the Adviser or any other investment adviser controlling, controlled by, or under common control with the Adviser (together with the Existing Funds, each series a ‘‘Fund,’’ and collectively, the ‘‘Funds’’). For purposes of the request for relief, the term ‘‘group of investment companies’’ means any two or more registered investment companies, including closedend investment companies and BDCs, that hold themselves out to investors as related companies for purposes of investment and investor services. 2 Certain of the Underlying Funds registered under the Act as either UITs or open-end management investment companies may have requested and obtained exemptions from the Commission necessary to permit their shares to be listed and traded on a national securities exchange at negotiated prices and, accordingly, to operate as exchange-traded funds (collectively, ‘‘ETFs’’ and each an ‘‘ETF’’). 3 Applicants are not requesting relief for a Fund of Funds to invest in BDCs and registered closedend investment companies that are not listed and traded on a national securities exchange. 4 A Fund of Funds generally would purchase and sell shares of an Underlying Fund that operates as an ETF or closed-end fund through secondary market transactions rather than through principal transactions with the Underlying Fund. Applicants nevertheless request relief from sections 17(a)(1) and (2) to permit each ETF or closed-end fund that is an affiliated person, or an affiliated person of an affiliated person, as defined in section 2(a)(3) of the Act, of a Fund of Funds, to sell shares to or redeem PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 57927 transactions will be consistent with the policies of each Fund of Funds and each Underlying Fund and with the general purposes of the Act and will be based on the net asset values of the Underlying Funds. 2. 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 are designed to, among other things, help prevent any potential (i) undue influence over an Underlying Fund that is not in the same ‘‘group of investment companies’’ as the Fund of Funds 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), (B), and (C) of the Act. 3. 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. Section 6(c) of the Act permits the Commission to exempt any persons, securities, 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. shares from the Fund of Funds. This includes, in the case of sales and redemptions of shares of ETFs, the in-kind transactions that accompany such sales and redemptions. Applicants are not seeking relief from section 17(a) for, and the requested relief will not apply to, transactions where an ETF, BDC, or closed-end fund could be deemed an affiliated person, or an affiliated person of an affiliated person, of a Fund of Funds because an investment adviser to the ETF, BDC, or closed-end fund, or an entity controlling, controlled by, or under common control with the investment adviser to the ETF, BDC, or closed-end fund, is also an investment adviser to the Fund of Funds. E:\FR\FM\29OCN1.SGM 29OCN1 57928 Federal Register / Vol. 84, No. 209 / Tuesday, October 29, 2019 / Notices For the Commission, by the Division of Investment Management, pursuant to delegated authority. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–23554 Filed 10–28–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 Extension: Rule 237 30-Day Notice (2019), SEC File No. 270–465, OMB Control No. 3235– 0528 Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520), the Securities and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension and approval of the collection of information discussed below. In Canada, as in the United States, individuals can invest a portion of their earnings in tax-deferred retirement savings accounts (‘‘Canadian retirement accounts’’). These accounts, which operate in a manner similar to individual retirement accounts in the United States, encourage retirement savings by permitting savings on a taxdeferred basis. Individuals who establish Canadian retirement accounts while living and working in Canada and who later move to the United States (‘‘Canadian-U.S. Participants’’ or ‘‘participants’’) often continue to hold their retirement assets in their Canadian retirement accounts rather than prematurely withdrawing (or ‘‘cashing out’’) those assets, which would result in immediate taxation in Canada. Once in the United States, however, these participants historically have been unable to manage their Canadian retirement account investments. Most securities that are ‘‘qualified investments’’ for Canadian retirement accounts are not registered under the U.S. securities laws. Those securities, therefore, generally cannot be publicly offered and sold in the United States without violating the registration requirement of the Securities Act of 1933 (‘‘Securities Act’’).1 As a result of 1 15 U.S.C. 77. In addition, the offering and selling of securities of investment companies VerDate Sep<11>2014 17:05 Oct 28, 2019 Jkt 250001 this registration requirement, CanadianU.S. Participants previously were not able to purchase or exchange securities for their Canadian retirement accounts as needed to meet their changing investment goals or income needs. The Commission issued a rulemaking in 2000 that enabled Canadian-U.S. Participants to manage the assets in their Canadian retirement accounts by providing relief from the U.S. registration requirements for offers of securities of foreign issuers to CanadianU.S. Participants and sales to Canadian retirement accounts.2 Rule 237 under the Securities Act 3 permits securities of foreign issuers, including securities of foreign funds, to be offered to CanadianU.S. Participants and sold to their Canadian retirement accounts without being registered under the Securities Act. Rule 237 requires written offering documents for securities offered and sold in reliance on the rule to disclose prominently that the securities are not registered with the Commission and are exempt from registration under the U.S. securities laws. The burden under the rule associated with adding this disclosure to written offering documents is minimal and is non-recurring. The foreign issuer, underwriter, or brokerdealer can redraft an existing prospectus or other written offering material to add this disclosure statement, or may draft a sticker or supplement containing this disclosure to be added to existing offering materials. In either case, based on discussions with representatives of the Canadian fund industry, the staff estimates that it would take an average of 10 minutes per document to draft the requisite disclosure statement. The Commission understands that there are approximately 2,412 Canadian issuers other than funds that may rely on rule 237 to make an initial public offering of their securities to CanadianU.S. Participants.4 The staff estimates that in any given year approximately 24 (‘‘funds’’) that are not registered pursuant to the Investment Company Act of 1940 (‘‘Investment Company Act’’) is generally prohibited by U.S. securities laws. 15 U.S.C. 80a. 2 See Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Accounts, Release Nos. 33–7860, 34–42905, IC–24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. This rulemaking also included new rule 7d–2 under the Investment Company Act, permitting foreign funds to offer securities to Canadian-U.S. Participants and sell securities to Canadian retirement accounts without registering as investment companies under the Investment Company Act. 17 CFR 270.7d–2. 3 17 CFR 230.237. 4 This estimate is based on the following calculation: 2,322 equity issuers + 90 bond issuers = 2,412 total issuers (as of Dec. 2018). See The MiG Report, Toronto Stock Exchange and TSX Venture Exchange (Dec. 2018) (providing number of equity and bond issuers on the Toronto Exchange). PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 (or 1 percent) of those issuers are likely to rely on rule 237 to make a public offering of their securities to participants, and that each of those 24 issuers, on average, distributes 3 different written offering documents concerning those securities, for a total of 72 offering documents. The staff therefore estimates that during each year that rule 237 is in effect, approximately 36 respondents 5 would be required to make 72 responses by adding the new disclosure statements to approximately 72 written offering documents. Thus, the staff estimates that the total annual burden associated with the rule 237 disclosure requirement would be approximately 12 hours (72 offering documents × 10 minutes per document). The total annual cost of burden hours is estimated to be $4,980 (12 hours × $415 per hour of attorney time).6 In addition, issuers from foreign countries other than Canada could rely on rule 237 to offer securities to Canadian-U.S. Participants and sell securities to their accounts without becoming subject to the registration requirements of the Securities Act. However, the staff believes that the number of issuers from other countries that rely on rule 237, and that therefore are required to comply with the offering document disclosure requirements, is negligible. These burden hour estimates are based upon the Commission staff’s experience and discussions with the fund industry. The estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act. These estimates are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Compliance with the collection of information requirements of the rule is mandatory and is necessary to comply with the requirements of the rule in general. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. 5 This estimate of respondents only includes foreign issuers. The number of respondents would be greater if foreign underwriters or broker-dealers draft stickers or supplements to add the required disclosure to existing offering documents. 6 The Commission’s estimate concerning the wage rate for attorney time is based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association (‘‘SIFMA’’). The $415 per hour figure for an attorney is from SIFMA’s Management & Professional Earnings in the Securities Industry 2013, modified by Commission staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and inflation. E:\FR\FM\29OCN1.SGM 29OCN1

Agencies

[Federal Register Volume 84, Number 209 (Tuesday, October 29, 2019)]
[Notices]
[Pages 57926-57928]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23554]


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

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33675; File No. 812-15052]


MassMutual Select Funds, et al.

October 23, 2019.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice.

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

    Notice of an application for an order under section 12(d)(1)(J) of 
the Investment Company Act of 1940 (the ``Act'') for an exemption from 
sections 12(d)(1)(A), (B), and (C) of the Act, and under sections 6(c) 
and 17(b) of the Act for an exemption from section 17(a) of the Act. 
The requested order would permit certain registered open-end investment 
companies to acquire shares of certain registered open-end investment 
companies, registered closed-end investment companies, and business 
development companies (``BDCs''), as defined in section 2(a)(48) of the 
Act, and registered unit

[[Page 57927]]

investment trusts (``UITs'') (collectively, the ``Underlying Funds'') 
that are within and outside the same group of investment companies as 
the acquiring investment companies, in excess of the limits in section 
12(d)(1) of the Act.

Applicants: MassMutual Select Funds, MassMutual Premier Funds, MML 
Series Investment Fund, and MML Series Investment Fund II (each a 
``Trust,'' and collectively, the ``Trusts''), is each organized as a 
Massachusetts business trust and registered with the Commission under 
the Act as an open-end management investment company with multiple 
series, each of which has its own investment objectives and principal 
investment strategies. MML Investment Advisers, LLC, the adviser to the 
Trusts, is organized as a limited liability company established under 
the laws of the state of Delaware and is registered as an investment 
adviser under section 203 of the Investment Advisers Act of 1940.

Filing Dates: The application was filed on July 26, 2019, and amended 
on October 17, 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 November 18, 2019, and should be accompanied by proof of 
service on the applicants, in the form of an affidavit, or, for 
lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, 
hearing requests should state the nature of the writer's interest, any 
facts bearing upon the desirability of a hearing on the matter, the 
reason for the request, and the issues contested. Persons who wish to 
be notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE, Washington, DC 20549-1090. Applicants: Andrew M. Goldberg, 
Esq., MML Investment Advisers, LLC, 100 Bright Meadow Blvd., Enfield, 
CT 06082, with copies to Timothy W. Diggins, Esq. and Yana D. Guss, 
Esq., Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston, 
MA 02199-3600.

FOR FURTHER INFORMATION CONTACT: Edward J. Rubenstein, Senior Special 
Counsel, at (202) 551-6854, or Nadya B. Roytblat, Assistant Chief 
Counsel, at (202) 551-6823 (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 to permit (a) each Fund \1\ (and 
each a ``Fund of Funds'') to acquire shares of Underlying Funds \2\ in 
excess of the limits in sections 12(d)(1)(A) and (C) of the Act, and 
(b) each Underlying Fund that is a registered open-end management 
investment company or series thereof, their principal underwriters, and 
any broker or dealer registered under the 1934 Act to sell shares of 
the Underlying Funds to the Fund of Funds in excess of the limits in 
section 12(d)(1)(B) of the Act.\3\ Applicants also request that the 
Commission issue an order under sections 6(c) and 17(b) of the Act from 
the prohibition on certain affiliated transactions in section 17(a) of 
the Act to the extent necessary to permit the Underlying Funds to sell 
their shares to, and redeem their shares from, the Funds of Funds.\4\ 
Applicants state that such transactions will be consistent with the 
policies of each Fund of Funds and each Underlying Fund and with the 
general purposes of the Act and will be based on the net asset values 
of the Underlying Funds.
---------------------------------------------------------------------------

    \1\ Applicants request that the order apply not only to the 
existing series of the Trusts (the ``Existing Funds''), but that the 
order also extend to any future series of each Trust and any other 
existing or future registered open-end management investment 
companies and any series thereof that are part of the same ``group 
of investment companies,'' as defined in section 12(d)(1)(G)(ii) of 
the Act, as the Trusts are, or may in the future be, advised by the 
Adviser or any other investment adviser controlling, controlled by, 
or under common control with the Adviser (together with the Existing 
Funds, each series a ``Fund,'' and collectively, the ``Funds''). For 
purposes of the request for relief, the term ``group of investment 
companies'' means any two or more registered investment companies, 
including closed-end investment companies and BDCs, that hold 
themselves out to investors as related companies for purposes of 
investment and investor services.
    \2\ Certain of the Underlying Funds registered under the Act as 
either UITs or open-end management investment companies may have 
requested and obtained exemptions from the Commission necessary to 
permit their shares to be listed and traded on a national securities 
exchange at negotiated prices and, accordingly, to operate as 
exchange-traded funds (collectively, ``ETFs'' and each an ``ETF'').
    \3\ Applicants are not requesting relief for a Fund of Funds to 
invest in BDCs and registered closed-end investment companies that 
are not listed and traded on a national securities exchange.
    \4\ A Fund of Funds generally would purchase and sell shares of 
an Underlying Fund that operates as an ETF or closed-end fund 
through secondary market transactions rather than through principal 
transactions with the Underlying Fund. Applicants nevertheless 
request relief from sections 17(a)(1) and (2) to permit each ETF or 
closed-end fund that is an affiliated person, or an affiliated 
person of an affiliated person, as defined in section 2(a)(3) of the 
Act, of a Fund of Funds, to sell shares to or redeem shares from the 
Fund of Funds. This includes, in the case of sales and redemptions 
of shares of ETFs, the in-kind transactions that accompany such 
sales and redemptions. Applicants are not seeking relief from 
section 17(a) for, and the requested relief will not apply to, 
transactions where an ETF, BDC, or closed-end fund could be deemed 
an affiliated person, or an affiliated person of an affiliated 
person, of a Fund of Funds because an investment adviser to the ETF, 
BDC, or closed-end fund, or an entity controlling, controlled by, or 
under common control with the investment adviser to the ETF, BDC, or 
closed-end fund, is also an investment adviser to the Fund of Funds.
---------------------------------------------------------------------------

    2. 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 are designed to, among other things, help 
prevent any potential (i) undue influence over an Underlying Fund that 
is not in the same ``group of investment companies'' as the Fund of 
Funds 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), (B), and (C) of the Act.
    3. 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. Section 6(c) of the 
Act permits the Commission to exempt any persons, securities, 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.


[[Page 57928]]


    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-23554 Filed 10-28-19; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.