Listed Funds Trust and Skyrocket Investments, LLC, 30505-30508 [2021-11917]

Download as PDF Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices This Notice will be published in the Federal Register. Erica A. Barker, Secretary. [FR Doc. 2021–11984 Filed 6–7–21; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 34293; 812–15202–01] Listed Funds Trust and Skyrocket Investments, LLC June 2, 2021. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. jbell on DSKJLSW7X2PROD with NOTICES AGENCY: Notice of an application under Section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from Section 15(a) of the Act, as well as from certain disclosure requirements in Rule 20a–1 under the Act, Item 19(a)(3) of Form N–1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934 (‘‘1934 Act’’), and Sections 6–07(2)(a), (b), and (c) of Regulation S–X (‘‘Disclosure Requirements’’). APPLICANTS: Listed Funds Trust (‘‘Trust’’), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series (each a ‘‘Fund’’) and Skyrocket Investments, LLC (‘‘Initial Adviser’’), a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’) that serves an investment adviser to the Funds (collectively with the Trust, the ‘‘Applicants’’). SUMMARY OF APPLICATION: The requested exemption would permit Applicants to enter into and materially amend subadvisory agreements with sub-advisers without shareholder approval and would grant relief from the Disclosure Requirements as they relate to fees paid to the sub-advisers. DATES: The application was filed on February 17, 2021 and amended on May 14, 2021. 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 emailing the Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicants with a copy of the request by email. Hearing requests should be received by VerDate Sep<11>2014 16:36 Jun 07, 2021 Jkt 253001 the Commission by 5:30 p.m. on June 28, 2021, 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 emailing the Commission’s Secretary. ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: Kent P. Barnes, Listed Funds Trust, by email: kent.barnes@usbank.com. FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior Counsel, at (202) 551–6879, or Lisa Reid Ragen, 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 an Applicant using the ‘‘Company’’ name box, at https://www.sec.gov/ search/search.htm or by calling (202) 551–8090. I. Requested Exemptive Relief 1. Applicants request an order to permit the Adviser,1 subject to the approval of the board of trustees of the Trust (collectively, the ‘‘Board’’),2 including a majority of the trustees who are not ‘‘interested persons’’ of the Trust or the Adviser, as defined in Section 2(a)(19) of the Act (the ‘‘Independent Trustees’’), without obtaining shareholder approval, to: (i) Select investment sub-advisers (‘‘SubAdvisers’’) for all or a portion of the assets of one or more of the Funds pursuant to an investment sub-advisory agreement with each Sub-Adviser (each a ‘‘Sub-Advisory Agreement’’); and (ii) materially amend Sub-Advisory Agreements with the Sub-Advisers. 1 The term ‘‘Adviser’’ means (i) the Initial Adviser, (ii) its successors, and (iii) any entity controlling, controlled by or under common control with, the Initial Adviser or its successors that serves as the primary adviser to a Sub-Advised Fund. For the purposes of the requested order, ‘‘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. Any other Adviser also will be registered with the Commission as an investment adviser under the Advisers Act. 2 The term ‘‘Board’’ also includes the board of trustees or directors of a future Sub-Advised Fund (as defined below), if different from the board of trustees (‘‘Trustees’’) of the Trust. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 30505 2. Applicants also request an order exempting the Sub-Advised Funds (as defined below) from the Disclosure Requirements, which require each Fund to disclose fees paid to a Sub-Adviser. Applicants seek relief to permit each Sub-Advised Fund to disclose (as a dollar amount and a percentage of the Fund’s net assets): (i) The aggregate fees paid to the Adviser and any WhollyOwned Sub-Advisers; and (ii) the aggregate fees paid to Affiliated and Non-Affiliated Sub-Advisers (‘‘Aggregate Fee Disclosure’’).3 Applicants seek an exemption to permit a Sub-Advised Fund to include only the Aggregate Fee Disclosure.4 3. Applicants request that the relief apply to Applicants, as well as to any future Fund and any other existing or future registered open-end management investment company or series thereof that intends to rely on the requested order in the future and that: (i) Is advised by the Adviser; (ii) uses the multi-manager structure described in the application; and (iii) complies with the terms and conditions of the application (each, a ‘‘Sub-Advised Fund’’).5 II. Management of the Sub-Advised Funds 4. The Adviser serves or will serve as the investment adviser to each SubAdvised Fund pursuant to an investment advisory agreement with the Fund (each an ‘‘Investment Advisory Agreement’’). Each Investment Advisory Agreement has been or will be approved by the Board, including a majority of the Independent Trustees, and by the 3 A ‘‘Wholly-Owned Sub-Adviser’’ is any investment adviser that is (1) an indirect or direct ‘‘wholly-owned subsidiary’’ (as such term is defined in Section 2(a)(43) of the Act) of the Adviser, (2) a ‘‘sister company’’ of the Adviser that is an indirect or direct ‘‘wholly-owned subsidiary’’ of the same company that indirectly or directly wholly owns the Adviser (the Adviser’s ‘‘parent company’’), or (3) a parent company of the Adviser. An ‘‘Affiliated Sub-Adviser’’ is any investment subadviser that is not a Wholly-Owned Sub-Adviser, but is an ‘‘affiliated person’’ (as defined in Section 2(a)(3) of the Act) of a Sub-Advised Fund or the Adviser for reasons other than serving as investment sub-adviser to one or more Funds. A ‘‘Non-Affiliated Sub-Adviser’’ is any investment adviser that is not an ‘‘affiliated person’’ (as defined in the Act) of a Fund or the Adviser, except to the extent that an affiliation arises solely because the Sub-Adviser serves as a sub-adviser to one or more Funds. 4 Applicants note that all other items required by Sections 6–07(2)(a), (b) and (c) of Regulation S–X will be disclosed. 5 All registered open-end investment companies that currently intend to rely on the requested order are named as Applicants. All Funds that currently are, or that currently intend to be, Sub-Advised Funds are identified in this application. Any entity that relies on the requested order will do so only in accordance with the terms and conditions contained in the application. E:\FR\FM\08JNN1.SGM 08JNN1 30506 Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES shareholders of the relevant SubAdvised Fund in the manner required by Sections 15(a) and 15(c) of the Act. The terms of these Investment Advisory Agreements comply or will comply with Section 15(a) of the Act. Applicants are not seeking an exemption from the Act with respect to the Investment Advisory Agreements. Pursuant to the terms of each Investment Advisory Agreement, the Adviser, subject to the oversight of the Board, will provide continuous investment management for each SubAdvised Fund. For its services to each Sub-Advised Fund, the Adviser receives or will receive an investment advisory fee from that Fund as specified in the applicable Investment Advisory Agreement. 5. Consistent with the terms of each Investment Advisory Agreement, the Adviser may, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable SubAdvised Fund (if required by applicable law), delegate portfolio management responsibilities of all or a portion of the assets of a Sub-Advised Fund to a SubAdviser. The Adviser will retain overall responsibility for the management and investment of the assets of each SubAdvised Fund. This responsibility includes recommending the removal or replacement of Sub-Advisers, allocating the portion of that Sub-Advised Fund’s assets to any given Sub-Adviser and reallocating those assets as necessary from time to time.6 The Sub-Advisers will be ‘‘investment advisers’’ to the Sub-Advised Funds within the meaning of Section 2(a)(20) of the Act and will provide investment management services to the Funds subject to, without limitation, the requirements of Sections 15(c) and 36(b) of the Act.7 The SubAdvisers, subject to the oversight of the Adviser and the Board, will determine the securities and other investments to be purchased, sold or entered into by a Sub-Advised Fund’s portfolio or a portion thereof, and will place orders with brokers or dealers that they select.8 6 Applicants represent that if the name of any Sub-Advised Fund contains the name of a subadviser, the name of the Adviser that serves as the primary adviser to the Fund, or a trademark or trade name that is owned by or publicly used to identify the Adviser, will precede the name of the subadviser. 7 The Sub-Advisers will be registered with the Commission as an investment adviser under the Advisers Act or not subject to such registration. 8 A ‘‘Sub-Adviser’’ also includes an investment sub-adviser that will provide the Adviser with a model portfolio reflecting a specific strategy, style or focus with respect to the investment of all or a portion of a Sub-Advised Fund’s assets. The Adviser may use the model portfolio to determine the securities and other instruments to be purchased, sold or entered into by a Sub-Advised VerDate Sep<11>2014 16:36 Jun 07, 2021 Jkt 253001 6. The Sub-Advisory Agreements will be approved by the Board, including a majority of the Independent Trustees, in accordance with Sections 15(a) and 15(c) of the Act. In addition, the terms of each Sub-Advisory Agreement will comply fully with the requirements of Section 15(a) of the Act. The Adviser may compensate the Sub-Advisers or the Sub-Advised Funds may pay advisory fees to the Sub-Advisers directly. 7. Sub-Advised Funds will inform shareholders of the hiring of a new SubAdviser pursuant to the following procedures (‘‘Modified Notice and Access Procedures’’): (a) Within 90 days after a new Sub-Adviser is hired for any Sub-Advised Fund, that Fund will send its shareholders either a Multi-Manager Notice or a Multi-Manager Notice and Multi-Manager Information Statement; 9 and (b) the Sub-Advised Fund will make the Multi-Manager Information Statement available on the website identified in the Multi-Manager Notice no later than when the Multi-Manager Notice (or Multi-Manager Notice and Multi-Manager Information Statement) is first sent to shareholders, and will maintain it on that website for at least 90 days.10 III. Applicable Law 8. Section 15(a) of the Act states, in part, that it is unlawful for any person to act as an investment adviser to a registered investment company ‘‘except pursuant to a written contract, which contract, whether with such registered Fund’s portfolio or a portion thereof, and place orders with brokers or dealers that it selects. 9 A ‘‘Multi-Manager Notice’’ will be modeled on a Notice of internet Availability as defined in Rule 14a–16 under the 1934 Act, and specifically will, among other things: (a) Summarize the relevant information regarding the new Sub-Adviser (except as modified to permit Aggregate Fee Disclosure); (b) inform shareholders that the Multi-Manager Information Statement is available on a website; (c) provide the website address; (d) state the time period during which the Multi-Manager Information Statement will remain available on that website; (e) provide instructions for accessing and printing the Multi-Manager Information Statement; and (f) instruct the shareholder that a paper or email copy of the Multi-Manager Information Statement may be obtained, without charge, by contacting the Sub-Advised Fund. A ‘‘MultiManager Information Statement’’ will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the 1934 Act for an information statement, except as modified by the requested order to permit Aggregate Fee Disclosure. Multi-Manager Information Statements will be filed with the Commission via the EDGAR system. 10 In addition, Applicants represent that whenever a new Sub-Adviser is retained, an existing Sub-Adviser is terminated, or a SubAdvisory Agreement is materially amended, the Sub-Advised Fund’s prospectus and statement of additional information will be supplemented promptly pursuant to Rule 497(e) under the Securities Act of 1933. PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company.’’ 9. Form N–1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N–1A requires a registered investment company to disclose in its statement of additional information the method of computing the ‘‘advisory fee payable’’ by the investment company with respect to each investment adviser, including the total dollar amounts that the investment company ‘‘paid to the adviser (aggregated with amounts paid to affiliated advisers, if any), and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years.’’ 10. Rule 20a–1 under the Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the 1934 Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together, require a proxy statement for a shareholder meeting at which the advisory contract will be voted upon to include the ‘‘rate of compensation of the investment adviser,’’ the ‘‘aggregate amount of the investment adviser’s fee,’’ a description of the ‘‘terms of the contract to be acted upon,’’ and, if a change in the advisory fee is proposed, the existing and proposed fees and the difference between the two fees. 11. Regulation S–X sets forth the requirements for financial statements required to be included as part of a registered investment company’s registration statement and shareholder reports filed with the Commission. Sections 6–07(2)(a), (b), and (c) of Regulation S–X require a registered investment company to include in its financial statements information about investment advisory fees. 12. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or any rule thereunder, if such 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. Applicants state that the requested relief meets this standard for the reasons discussed below. E:\FR\FM\08JNN1.SGM 08JNN1 jbell on DSKJLSW7X2PROD with NOTICES Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices IV. Arguments in Support of the Requested Relief 13. Applicants assert that, from the perspective of the shareholder, the role of the Sub-Advisers is substantially equivalent to the limited role of the individual portfolio managers employed by an investment adviser to a traditional investment company. Applicants also assert that the shareholders expect the Adviser, subject to review and approval of the Board, to select a Sub-Adviser who is in the best position to achieve the Sub-Advised Fund’s investment objective. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of the Sub-Advised Fund are paying the Adviser—the selection, oversight and evaluation of the Sub-Adviser—without incurring unnecessary delays or expenses of convening special meetings of shareholders is appropriate and in the interest of the Fund’s shareholders, and will allow such Fund to operate more efficiently. Applicants state that each Investment Advisory Agreement will continue to be fully subject to Section 15(a) of the Act and approved by the relevant Board, including a majority of the Independent Trustees, in the manner required by Section 15(a) and 15(c) of the Act. 14. Applicants submit that the requested relief meets the standards for relief under Section 6(c) of the Act. Applicants state that the operation of the Sub-Advised Fund in the manner described in the application must be approved by shareholders of that Fund before it may rely on the requested relief. Applicants also state that the proposed conditions to the requested relief are designed to address any potential conflicts of interest or economic incentives, and provide that shareholders are informed when new Sub-Advisers are hired. 15. Applicants contend that, in the circumstances described in the application, a proxy solicitation to approve the appointment of new SubAdvisers provides no more meaningful information to shareholders than the proposed Multi-Manager Information Statement. Applicants state that, accordingly, they believe the requested relief 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. 16. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that disclosure of the individual fees paid to the Sub-Advisers does not serve any meaningful purpose. Applicants contend that the primary VerDate Sep<11>2014 16:36 Jun 07, 2021 Jkt 253001 reasons for requiring disclosure of individual fees paid to Sub-Advisers are to inform shareholders of expenses to be charged by a particular Sub-Advised Fund and to enable shareholders to compare the fees to those of other comparable investment companies. Applicants believe that the requested relief satisfies these objectives because the Sub-Advised Fund’s overall advisory fee will be fully disclosed and, therefore, shareholders will know what the Sub-Advised Fund’s fees and expenses are and will be able to compare the advisory fees a SubAdvised Fund is charged to those of other investment companies. In addition, Applicants assert that the requested relief would benefit shareholders of the Sub-Advised Fund because it would improve the Adviser’s ability to negotiate the fees paid to SubAdvisers. In particular, Applicants state that if the Adviser is not required to disclose the Sub-Advisers’ fees to the public, the Adviser may be able to negotiate rates that are below a SubAdviser’s ‘‘posted’’ amounts as the rate would not be disclosed to the SubAdviser’s other clients. Applicants assert that the relief will also encourage Sub-Advisers to negotiate lower subadvisory fees with the Adviser if the lower fees are not required to be made public. V. Relief for Affiliated Sub-Advisers 17. The Commission has granted the requested relief with respect to WhollyOwned and Non-Affiliated SubAdvisers through numerous exemptive orders. The Commission also has extended the requested relief to Affiliated Sub-Advisers.11 Applicants state that although the Adviser’s judgment in recommending a SubAdviser can be affected by certain conflicts, they do not warrant denying the extension of the requested relief to Affiliated Sub-Advisers. Specifically, the Adviser faces those conflicts in allocating fund assets between itself and a Sub-Adviser, and across Sub-Advisers, as it has an interest in considering the benefit it will receive, directly or indirectly, from the fee the Sub-Advised Fund pays for the management of those assets. Applicants also state that to the extent the Adviser has a conflict of interest with respect to the selection of an Affiliated Sub-Adviser, the proposed conditions are protective of shareholder interests by ensuring the Board’s independence and providing the Board with the appropriate resources and 11 Carillon Series Trust, et al., Investment Co. Act Rel. Nos. 33464 (May 2, 2019) (notice) and 33494 (May 29, 2019) (order). PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 30507 information to monitor and address conflicts. 18. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that it is appropriate to disclose only aggregate fees paid to Affiliated Sub-Advisers for the same reasons that similar relief has been granted previously with respect to Wholly-Owned and Non-Affiliated SubAdvisers. VI. Applicants’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Before a Sub-Advised Fund may rely on the order requested in the application, the operation of the SubAdvised Fund in the manner described in the application will be, or has been, approved by a majority of the SubAdvised Fund’s outstanding voting securities as defined in the Act, or, in the case of a Sub-Advised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Sub-Advised Fund’s shares are offered to the public. 2. The prospectus for each SubAdvised Fund will disclose the existence, substance and effect of any order granted pursuant to the application. In addition, each SubAdvised Fund will hold itself out to the public as employing the multi-manager structure described in the application. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Sub-Advisers and recommend their hiring, termination, and replacement. 3. The Adviser will provide general management services to each SubAdvised Fund, including overall supervisory responsibility for the general management and investment of the Sub-Advised Fund’s assets, and subject to review and oversight of the Board, will (i) set the Sub-Advised Fund’s overall investment strategies, (ii) evaluate, select, and recommend SubAdvisers for all or a portion of the SubAdvised Fund’s assets, (iii) allocate and, when appropriate, reallocate the SubAdvised Fund’s assets among SubAdvisers, (iv) monitor and evaluate the Sub-Advisers’ performance, and (v) implement procedures reasonably designed to ensure that Sub-Advisers comply with the Sub-Advised Fund’s investment objective, policies and restrictions. 4. Sub-Advised Funds will inform shareholders of the hiring of a new SubAdviser within 90 days after the hiring E:\FR\FM\08JNN1.SGM 08JNN1 jbell on DSKJLSW7X2PROD with NOTICES 30508 Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices of the new Sub-Adviser pursuant to the Modified Notice and Access Procedures. 5. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees. 6. Independent Legal Counsel, as defined in Rule 0–1(a)(6) under the Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees. 7. Whenever a Sub-Adviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser. 8. The Board must evaluate any material conflicts that may be present in a sub-advisory arrangement. Specifically, whenever a sub-adviser change is proposed for a Sub-Advised Fund (‘‘Sub-Adviser Change’’) or the Board considers an existing SubAdvisory Agreement as part of its annual review process (‘‘Sub-Adviser Review’’): (a) The Adviser will provide the Board, to the extent not already being provided pursuant to Section 15(c) of the Act, with all relevant information concerning: (i) Any material interest in the proposed new Sub-Adviser, in the case of a Sub-Adviser Change, or the SubAdviser in the case of a Sub-Adviser Review, held directly or indirectly by the Adviser or a parent or sister company of the Adviser, and any material impact the proposed SubAdvisory Agreement may have on that interest; (ii) any arrangement or understanding in which the Adviser or any parent or sister company of the Adviser is a participant that (A) may have had a material effect on the proposed SubAdviser Change or Sub-Adviser Review, or (B) may be materially affected by the proposed Sub-Adviser Change or SubAdviser Review; (iii) any material interest in a SubAdviser held directly or indirectly by an officer or Trustee of the Sub-Advised Fund, or an officer or board member of the Adviser (other than through a pooled investment vehicle not controlled by such person); and (iv) any other information that may be relevant to the Board in evaluating any potential material conflicts of interest in the proposed Sub-Adviser Change or Sub-Adviser Review. (b) the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board VerDate Sep<11>2014 16:36 Jun 07, 2021 Jkt 253001 minutes, that the Sub-Adviser Change or continuation after Sub-Adviser Review is in the best interests of the SubAdvised Fund and its shareholders and, based on the information provided to the Board, does not involve a conflict of interest from which the Adviser, a SubAdviser, any officer or Trustee of the Sub-Advised Fund, or any officer or board member of the Adviser derives an inappropriate advantage. 9. Each Sub-Advised Fund will disclose in its registration statement the Aggregate Fee Disclosure. 10. In the event that the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the application, the requested order will expire on the effective date of that rule. 11. Any new Sub-Advisory Agreement or any amendment to an existing Investment Advisory Agreement or Sub-Advisory Agreement that directly or indirectly results in an increase in the aggregate advisory fee rate payable by the Sub-Advised Fund will be submitted to the Sub-Advised Fund’s shareholders for approval. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–11917 Filed 6–7–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92090; File No. SR–MIAX– 2021–22] Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay Implementation of an Amendment to Rule 518, Complex Orders, To Permit Legging Through the Simple Market June 2, 2021. 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 May 21, 2021, Miami International Securities Exchange, LLC (‘‘MIAX Options’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00108 Fmt 4703 Sfmt 4703 pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to delay implementation of the change to allow a component of a complex order 5 that legs into the Simple Order Book 6 to execute at a price that is outside the NBBO.7 The text of the proposed rule change is available on the Exchange’s website at https://www.miaxoptions.com/rulefilings/ at MIAX Options’ principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 3 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 5 A ‘‘complex order’’ is any order involving the concurrent purchase and/or sale of two or more different options in the same underlying security (the ‘‘legs’’ or ‘‘components’’ of the complex order), for the same account, in a ratio that is equal to or greater than one-to-three (.333) and less than or equal to three-to-one (3.00) and for the purposes of executing a particular investment strategy. Minioptions may only be part of a complex order that includes other mini-options. Only those complex orders in the classes designated by the Exchange and communicated to Members via Regulatory Circular with no more than the applicable number of legs, as determined by the Exchange on a classby-class basis and communicated to Members via Regulatory Circular, are eligible for processing. See Exchange Rule 518(a)(5). 6 The ‘‘Simple Order Book’’ is the Exchange’s regular electronic book of orders and quotes. See Exchange Rule 518(a)(15). 7 The term ‘‘NBBO’’ means the national best bid or offer as calculated by the Exchange based on market information received by the Exchange from the appropriate Securities Information Processor (‘‘SIP’’). See Exchange Rule 518(a)(14). 4 17 E:\FR\FM\08JNN1.SGM 08JNN1

Agencies

[Federal Register Volume 86, Number 108 (Tuesday, June 8, 2021)]
[Notices]
[Pages 30505-30508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11917]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34293; 812-15202-01]


Listed Funds Trust and Skyrocket Investments, LLC

June 2, 2021.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application under Section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from Section 15(a) of 
the Act, as well as from certain disclosure requirements in Rule 20a-1 
under the Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the 
Securities Exchange Act of 1934 (``1934 Act''), and Sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements'').

Applicants: Listed Funds Trust (``Trust''), a Delaware statutory trust 
registered under the Act as an open-end management investment company 
with multiple series (each a ``Fund'') and Skyrocket Investments, LLC 
(``Initial Adviser''), a Delaware limited liability company registered 
as an investment adviser under the Investment Advisers Act of 1940 
(``Advisers Act'') that serves an investment adviser to the Funds 
(collectively with the Trust, the ``Applicants'').

Summary of Application:  The requested exemption would permit 
Applicants to enter into and materially amend sub-advisory agreements 
with sub-advisers without shareholder approval and would grant relief 
from the Disclosure Requirements as they relate to fees paid to the 
sub-advisers.

DATES: The application was filed on February 17, 2021 and amended on 
May 14, 2021.

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 emailing the Commission's 
Secretary at [email protected] and serving Applicants with a 
copy of the request by email. Hearing requests should be received by 
the Commission by 5:30 p.m. on June 28, 2021, 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 emailing the 
Commission's Secretary.

ADDRESSES: The Commission: [email protected]. Applicants: Kent 
P. Barnes, Listed Funds Trust, by email: [email protected].

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or Lisa Reid Ragen, 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 an Applicant 
using the ``Company'' name box, at https://www.sec.gov/search/search.htm 
or by calling (202) 551-8090.

I. Requested Exemptive Relief

    1. Applicants request an order to permit the Adviser,\1\ subject to 
the approval of the board of trustees of the Trust (collectively, the 
``Board''),\2\ including a majority of the trustees who are not 
``interested persons'' of the Trust or the Adviser, as defined in 
Section 2(a)(19) of the Act (the ``Independent Trustees''), without 
obtaining shareholder approval, to: (i) Select investment sub-advisers 
(``Sub-Advisers'') for all or a portion of the assets of one or more of 
the Funds pursuant to an investment sub-advisory agreement with each 
Sub-Adviser (each a ``Sub-Advisory Agreement''); and (ii) materially 
amend Sub-Advisory Agreements with the Sub-Advisers.
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    \1\ The term ``Adviser'' means (i) the Initial Adviser, (ii) its 
successors, and (iii) any entity controlling, controlled by or under 
common control with, the Initial Adviser or its successors that 
serves as the primary adviser to a Sub-Advised Fund. For the 
purposes of the requested order, ``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. Any 
other Adviser also will be registered with the Commission as an 
investment adviser under the Advisers Act.
    \2\ The term ``Board'' also includes the board of trustees or 
directors of a future Sub-Advised Fund (as defined below), if 
different from the board of trustees (``Trustees'') of the Trust.
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    2. Applicants also request an order exempting the Sub-Advised Funds 
(as defined below) from the Disclosure Requirements, which require each 
Fund to disclose fees paid to a Sub-Adviser. Applicants seek relief to 
permit each Sub-Advised Fund to disclose (as a dollar amount and a 
percentage of the Fund's net assets): (i) The aggregate fees paid to 
the Adviser and any Wholly-Owned Sub-Advisers; and (ii) the aggregate 
fees paid to Affiliated and Non-Affiliated Sub-Advisers (``Aggregate 
Fee Disclosure'').\3\ Applicants seek an exemption to permit a Sub-
Advised Fund to include only the Aggregate Fee Disclosure.\4\
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    \3\ A ``Wholly-Owned Sub-Adviser'' is any investment adviser 
that is (1) an indirect or direct ``wholly-owned subsidiary'' (as 
such term is defined in Section 2(a)(43) of the Act) of the Adviser, 
(2) a ``sister company'' of the Adviser that is an indirect or 
direct ``wholly-owned subsidiary'' of the same company that 
indirectly or directly wholly owns the Adviser (the Adviser's 
``parent company''), or (3) a parent company of the Adviser. An 
``Affiliated Sub-Adviser'' is any investment sub-adviser that is not 
a Wholly-Owned Sub-Adviser, but is an ``affiliated person'' (as 
defined in Section 2(a)(3) of the Act) of a Sub-Advised Fund or the 
Adviser for reasons other than serving as investment sub-adviser to 
one or more Funds. A ``Non-Affiliated Sub-Adviser'' is any 
investment adviser that is not an ``affiliated person'' (as defined 
in the Act) of a Fund or the Adviser, except to the extent that an 
affiliation arises solely because the Sub-Adviser serves as a sub-
adviser to one or more Funds.
    \4\ Applicants note that all other items required by Sections 6-
07(2)(a), (b) and (c) of Regulation S-X will be disclosed.
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    3. Applicants request that the relief apply to Applicants, as well 
as to any future Fund and any other existing or future registered open-
end management investment company or series thereof that intends to 
rely on the requested order in the future and that: (i) Is advised by 
the Adviser; (ii) uses the multi-manager structure described in the 
application; and (iii) complies with the terms and conditions of the 
application (each, a ``Sub-Advised Fund'').\5\
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    \5\ All registered open-end investment companies that currently 
intend to rely on the requested order are named as Applicants. All 
Funds that currently are, or that currently intend to be, Sub-
Advised Funds are identified in this application. Any entity that 
relies on the requested order will do so only in accordance with the 
terms and conditions contained in the application.
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II. Management of the Sub-Advised Funds

    4. The Adviser serves or will serve as the investment adviser to 
each Sub-Advised Fund pursuant to an investment advisory agreement with 
the Fund (each an ``Investment Advisory Agreement''). Each Investment 
Advisory Agreement has been or will be approved by the Board, including 
a majority of the Independent Trustees, and by the

[[Page 30506]]

shareholders of the relevant Sub-Advised Fund in the manner required by 
Sections 15(a) and 15(c) of the Act. The terms of these Investment 
Advisory Agreements comply or will comply with Section 15(a) of the 
Act. Applicants are not seeking an exemption from the Act with respect 
to the Investment Advisory Agreements. Pursuant to the terms of each 
Investment Advisory Agreement, the Adviser, subject to the oversight of 
the Board, will provide continuous investment management for each Sub-
Advised Fund. For its services to each Sub-Advised Fund, the Adviser 
receives or will receive an investment advisory fee from that Fund as 
specified in the applicable Investment Advisory Agreement.
    5. Consistent with the terms of each Investment Advisory Agreement, 
the Adviser may, subject to the approval of the Board, including a 
majority of the Independent Trustees, and the shareholders of the 
applicable Sub-Advised Fund (if required by applicable law), delegate 
portfolio management responsibilities of all or a portion of the assets 
of a Sub-Advised Fund to a Sub-Adviser. The Adviser will retain overall 
responsibility for the management and investment of the assets of each 
Sub-Advised Fund. This responsibility includes recommending the removal 
or replacement of Sub-Advisers, allocating the portion of that Sub-
Advised Fund's assets to any given Sub-Adviser and reallocating those 
assets as necessary from time to time.\6\ The Sub-Advisers will be 
``investment advisers'' to the Sub-Advised Funds within the meaning of 
Section 2(a)(20) of the Act and will provide investment management 
services to the Funds subject to, without limitation, the requirements 
of Sections 15(c) and 36(b) of the Act.\7\ The Sub-Advisers, subject to 
the oversight of the Adviser and the Board, will determine the 
securities and other investments to be purchased, sold or entered into 
by a Sub-Advised Fund's portfolio or a portion thereof, and will place 
orders with brokers or dealers that they select.\8\
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    \6\ Applicants represent that if the name of any Sub-Advised 
Fund contains the name of a sub-adviser, the name of the Adviser 
that serves as the primary adviser to the Fund, or a trademark or 
trade name that is owned by or publicly used to identify the 
Adviser, will precede the name of the sub-adviser.
    \7\ The Sub-Advisers will be registered with the Commission as 
an investment adviser under the Advisers Act or not subject to such 
registration.
    \8\ A ``Sub-Adviser'' also includes an investment sub-adviser 
that will provide the Adviser with a model portfolio reflecting a 
specific strategy, style or focus with respect to the investment of 
all or a portion of a Sub-Advised Fund's assets. The Adviser may use 
the model portfolio to determine the securities and other 
instruments to be purchased, sold or entered into by a Sub-Advised 
Fund's portfolio or a portion thereof, and place orders with brokers 
or dealers that it selects.
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    6. The Sub-Advisory Agreements will be approved by the Board, 
including a majority of the Independent Trustees, in accordance with 
Sections 15(a) and 15(c) of the Act. In addition, the terms of each 
Sub-Advisory Agreement will comply fully with the requirements of 
Section 15(a) of the Act. The Adviser may compensate the Sub-Advisers 
or the Sub-Advised Funds may pay advisory fees to the Sub-Advisers 
directly.
    7. Sub-Advised Funds will inform shareholders of the hiring of a 
new Sub-Adviser pursuant to the following procedures (``Modified Notice 
and Access Procedures''): (a) Within 90 days after a new Sub-Adviser is 
hired for any Sub-Advised Fund, that Fund will send its shareholders 
either a Multi-Manager Notice or a Multi-Manager Notice and Multi-
Manager Information Statement; \9\ and (b) the Sub-Advised Fund will 
make the Multi-Manager Information Statement available on the website 
identified in the Multi-Manager Notice no later than when the Multi-
Manager Notice (or Multi-Manager Notice and Multi-Manager Information 
Statement) is first sent to shareholders, and will maintain it on that 
website for at least 90 days.\10\
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    \9\ A ``Multi-Manager Notice'' will be modeled on a Notice of 
internet Availability as defined in Rule 14a-16 under the 1934 Act, 
and specifically will, among other things: (a) Summarize the 
relevant information regarding the new Sub-Adviser (except as 
modified to permit Aggregate Fee Disclosure); (b) inform 
shareholders that the Multi-Manager Information Statement is 
available on a website; (c) provide the website address; (d) state 
the time period during which the Multi-Manager Information Statement 
will remain available on that website; (e) provide instructions for 
accessing and printing the Multi-Manager Information Statement; and 
(f) instruct the shareholder that a paper or email copy of the 
Multi-Manager Information Statement may be obtained, without charge, 
by contacting the Sub-Advised Fund. A ``Multi-Manager Information 
Statement'' will meet the requirements of Regulation 14C, Schedule 
14C and Item 22 of Schedule 14A under the 1934 Act for an 
information statement, except as modified by the requested order to 
permit Aggregate Fee Disclosure. Multi-Manager Information 
Statements will be filed with the Commission via the EDGAR system.
    \10\ In addition, Applicants represent that whenever a new Sub-
Adviser is retained, an existing Sub-Adviser is terminated, or a 
Sub-Advisory Agreement is materially amended, the Sub-Advised Fund's 
prospectus and statement of additional information will be 
supplemented promptly pursuant to Rule 497(e) under the Securities 
Act of 1933.
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III. Applicable Law

    8. Section 15(a) of the Act states, in part, that it is unlawful 
for any person to act as an investment adviser to a registered 
investment company ``except pursuant to a written contract, which 
contract, whether with such registered company or with an investment 
adviser of such registered company, has been approved by the vote of a 
majority of the outstanding voting securities of such registered 
company.''
    9. Form N-1A is the registration statement used by open-end 
investment companies. Item 19(a)(3) of Form N-1A requires a registered 
investment company to disclose in its statement of additional 
information the method of computing the ``advisory fee payable'' by the 
investment company with respect to each investment adviser, including 
the total dollar amounts that the investment company ``paid to the 
adviser (aggregated with amounts paid to affiliated advisers, if any), 
and any advisers who are not affiliated persons of the adviser, under 
the investment advisory contract for the last three fiscal years.''
    10. Rule 20a-1 under the Act requires proxies solicited with 
respect to a registered investment company to comply with Schedule 14A 
under the 1934 Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 
22(c)(9) of Schedule 14A, taken together, require a proxy statement for 
a shareholder meeting at which the advisory contract will be voted upon 
to include the ``rate of compensation of the investment adviser,'' the 
``aggregate amount of the investment adviser's fee,'' a description of 
the ``terms of the contract to be acted upon,'' and, if a change in the 
advisory fee is proposed, the existing and proposed fees and the 
difference between the two fees.
    11. Regulation S-X sets forth the requirements for financial 
statements required to be included as part of a registered investment 
company's registration statement and shareholder reports filed with the 
Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require 
a registered investment company to include in its financial statements 
information about investment advisory fees.
    12. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provisions of the Act, or 
any rule thereunder, if such 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. 
Applicants state that the requested relief meets this standard for the 
reasons discussed below.

[[Page 30507]]

IV. Arguments in Support of the Requested Relief

    13. Applicants assert that, from the perspective of the 
shareholder, the role of the Sub-Advisers is substantially equivalent 
to the limited role of the individual portfolio managers employed by an 
investment adviser to a traditional investment company. Applicants also 
assert that the shareholders expect the Adviser, subject to review and 
approval of the Board, to select a Sub-Adviser who is in the best 
position to achieve the Sub-Advised Fund's investment objective. 
Applicants believe that permitting the Adviser to perform the duties 
for which the shareholders of the Sub-Advised Fund are paying the 
Adviser--the selection, oversight and evaluation of the Sub-Adviser--
without incurring unnecessary delays or expenses of convening special 
meetings of shareholders is appropriate and in the interest of the 
Fund's shareholders, and will allow such Fund to operate more 
efficiently. Applicants state that each Investment Advisory Agreement 
will continue to be fully subject to Section 15(a) of the Act and 
approved by the relevant Board, including a majority of the Independent 
Trustees, in the manner required by Section 15(a) and 15(c) of the Act.
    14. Applicants submit that the requested relief meets the standards 
for relief under Section 6(c) of the Act. Applicants state that the 
operation of the Sub-Advised Fund in the manner described in the 
application must be approved by shareholders of that Fund before it may 
rely on the requested relief. Applicants also state that the proposed 
conditions to the requested relief are designed to address any 
potential conflicts of interest or economic incentives, and provide 
that shareholders are informed when new Sub-Advisers are hired.
    15. Applicants contend that, in the circumstances described in the 
application, a proxy solicitation to approve the appointment of new 
Sub-Advisers provides no more meaningful information to shareholders 
than the proposed Multi-Manager Information Statement. Applicants state 
that, accordingly, they believe the requested relief 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.
    16. With respect to the relief permitting Aggregate Fee Disclosure, 
Applicants assert that disclosure of the individual fees paid to the 
Sub-Advisers does not serve any meaningful purpose. Applicants contend 
that the primary reasons for requiring disclosure of individual fees 
paid to Sub-Advisers are to inform shareholders of expenses to be 
charged by a particular Sub-Advised Fund and to enable shareholders to 
compare the fees to those of other comparable investment companies. 
Applicants believe that the requested relief satisfies these objectives 
because the Sub-Advised Fund's overall advisory fee will be fully 
disclosed and, therefore, shareholders will know what the Sub-Advised 
Fund's fees and expenses are and will be able to compare the advisory 
fees a Sub-Advised Fund is charged to those of other investment 
companies. In addition, Applicants assert that the requested relief 
would benefit shareholders of the Sub-Advised Fund because it would 
improve the Adviser's ability to negotiate the fees paid to Sub-
Advisers. In particular, Applicants state that if the Adviser is not 
required to disclose the Sub-Advisers' fees to the public, the Adviser 
may be able to negotiate rates that are below a Sub-Adviser's 
``posted'' amounts as the rate would not be disclosed to the Sub-
Adviser's other clients. Applicants assert that the relief will also 
encourage Sub-Advisers to negotiate lower sub-advisory fees with the 
Adviser if the lower fees are not required to be made public.

V. Relief for Affiliated Sub-Advisers

    17. The Commission has granted the requested relief with respect to 
Wholly-Owned and Non-Affiliated Sub-Advisers through numerous exemptive 
orders. The Commission also has extended the requested relief to 
Affiliated Sub-Advisers.\11\ Applicants state that although the 
Adviser's judgment in recommending a Sub-Adviser can be affected by 
certain conflicts, they do not warrant denying the extension of the 
requested relief to Affiliated Sub-Advisers. Specifically, the Adviser 
faces those conflicts in allocating fund assets between itself and a 
Sub-Adviser, and across Sub-Advisers, as it has an interest in 
considering the benefit it will receive, directly or indirectly, from 
the fee the Sub-Advised Fund pays for the management of those assets. 
Applicants also state that to the extent the Adviser has a conflict of 
interest with respect to the selection of an Affiliated Sub-Adviser, 
the proposed conditions are protective of shareholder interests by 
ensuring the Board's independence and providing the Board with the 
appropriate resources and information to monitor and address conflicts.
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    \11\ Carillon Series Trust, et al., Investment Co. Act Rel. Nos. 
33464 (May 2, 2019) (notice) and 33494 (May 29, 2019) (order).
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    18. With respect to the relief permitting Aggregate Fee Disclosure, 
Applicants assert that it is appropriate to disclose only aggregate 
fees paid to Affiliated Sub-Advisers for the same reasons that similar 
relief has been granted previously with respect to Wholly-Owned and 
Non-Affiliated Sub-Advisers.

VI. Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Before a Sub-Advised Fund may rely on the order requested in the 
application, the operation of the Sub-Advised Fund in the manner 
described in the application will be, or has been, approved by a 
majority of the Sub-Advised Fund's outstanding voting securities as 
defined in the Act, or, in the case of a Sub-Advised Fund whose public 
shareholders purchase shares on the basis of a prospectus containing 
the disclosure contemplated by condition 2 below, by the initial 
shareholder before such Sub-Advised Fund's shares are offered to the 
public.
    2. The prospectus for each Sub-Advised Fund will disclose the 
existence, substance and effect of any order granted pursuant to the 
application. In addition, each Sub-Advised Fund will hold itself out to 
the public as employing the multi-manager structure described in the 
application. The prospectus will prominently disclose that the Adviser 
has the ultimate responsibility, subject to oversight by the Board, to 
oversee the Sub-Advisers and recommend their hiring, termination, and 
replacement.
    3. The Adviser will provide general management services to each 
Sub-Advised Fund, including overall supervisory responsibility for the 
general management and investment of the Sub-Advised Fund's assets, and 
subject to review and oversight of the Board, will (i) set the Sub-
Advised Fund's overall investment strategies, (ii) evaluate, select, 
and recommend Sub-Advisers for all or a portion of the Sub-Advised 
Fund's assets, (iii) allocate and, when appropriate, reallocate the 
Sub-Advised Fund's assets among Sub-Advisers, (iv) monitor and evaluate 
the Sub-Advisers' performance, and (v) implement procedures reasonably 
designed to ensure that Sub-Advisers comply with the Sub-Advised Fund's 
investment objective, policies and restrictions.
    4. Sub-Advised Funds will inform shareholders of the hiring of a 
new Sub-Adviser within 90 days after the hiring

[[Page 30508]]

of the new Sub-Adviser pursuant to the Modified Notice and Access 
Procedures.
    5. At all times, at least a majority of the Board will be 
Independent Trustees, and the selection and nomination of new or 
additional Independent Trustees will be placed within the discretion of 
the then-existing Independent Trustees.
    6. Independent Legal Counsel, as defined in Rule 0-1(a)(6) under 
the Act, will be engaged to represent the Independent Trustees. The 
selection of such counsel will be within the discretion of the then-
existing Independent Trustees.
    7. Whenever a Sub-Adviser is hired or terminated, the Adviser will 
provide the Board with information showing the expected impact on the 
profitability of the Adviser.
    8. The Board must evaluate any material conflicts that may be 
present in a sub-advisory arrangement. Specifically, whenever a sub-
adviser change is proposed for a Sub-Advised Fund (``Sub-Adviser 
Change'') or the Board considers an existing Sub-Advisory Agreement as 
part of its annual review process (``Sub-Adviser Review''):
    (a) The Adviser will provide the Board, to the extent not already 
being provided pursuant to Section 15(c) of the Act, with all relevant 
information concerning:
    (i) Any material interest in the proposed new Sub-Adviser, in the 
case of a Sub-Adviser Change, or the Sub-Adviser in the case of a Sub-
Adviser Review, held directly or indirectly by the Adviser or a parent 
or sister company of the Adviser, and any material impact the proposed 
Sub-Advisory Agreement may have on that interest;
    (ii) any arrangement or understanding in which the Adviser or any 
parent or sister company of the Adviser is a participant that (A) may 
have had a material effect on the proposed Sub-Adviser Change or Sub-
Adviser Review, or (B) may be materially affected by the proposed Sub-
Adviser Change or Sub-Adviser Review;
    (iii) any material interest in a Sub-Adviser held directly or 
indirectly by an officer or Trustee of the Sub-Advised Fund, or an 
officer or board member of the Adviser (other than through a pooled 
investment vehicle not controlled by such person); and
    (iv) any other information that may be relevant to the Board in 
evaluating any potential material conflicts of interest in the proposed 
Sub-Adviser Change or Sub-Adviser Review.
    (b) the Board, including a majority of the Independent Trustees, 
will make a separate finding, reflected in the Board minutes, that the 
Sub-Adviser Change or continuation after Sub-Adviser Review is in the 
best interests of the Sub-Advised Fund and its shareholders and, based 
on the information provided to the Board, does not involve a conflict 
of interest from which the Adviser, a Sub-Adviser, any officer or 
Trustee of the Sub-Advised Fund, or any officer or board member of the 
Adviser derives an inappropriate advantage.
    9. Each Sub-Advised Fund will disclose in its registration 
statement the Aggregate Fee Disclosure.
    10. In the event that the Commission adopts a rule under the Act 
providing substantially similar relief to that in the order requested 
in the application, the requested order will expire on the effective 
date of that rule.
    11. Any new Sub-Advisory Agreement or any amendment to an existing 
Investment Advisory Agreement or Sub-Advisory Agreement that directly 
or indirectly results in an increase in the aggregate advisory fee rate 
payable by the Sub-Advised Fund will be submitted to the Sub-Advised 
Fund's shareholders for approval.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11917 Filed 6-7-21; 8:45 am]
BILLING CODE 8011-01-P
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