Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4143 

13See Notice, supra note 1, 85 FR at 64568–74. 

14 17 CFR 242.608(b)(2)(i). See also Commission 

Rule of Practice 700(b)(2), 17 CFR 201.700(b)(2). 

15See 17 CFR 242.608(b)(2). 

16See 17 CFR 242.608(b)(2). 

17 15 U.S.C. 78k–1(a)(1)(C)(iii). 

18See 15 U.S.C. 78k–1(c)(1)(B). 

19See Rule 700(b)(3)(ii) of the Commission’s 

Rules of Practice. 17 CFR 200.700(b)(3)(ii). 

20 17 CFR 242.608(b)(2)(i). 

21Rule 700(c)(ii) of the Commission’s Rules of 

Practice provides that ‘‘[t]he Commission, in its sole 

discretion, may determine whether any issues 

relevant to approval or disapproval would be 

facilitated by the opportunity for an oral 

presentation of views.’’ 17 CFR 201.700(c)(ii). 22 17 CFR 200.30–3(a)(12). 

or approved with modifications.13 In 

this order, pursuant to Rule 608(b)(2)(i) 

of Regulation NMS,14 the Commission is 

providing notice of the grounds for 

disapproval under consideration: 

• Whether the proposed CT Plan is 

consistent with the Governance Order; 

• Whether, consistent with Rule 608 

of Regulation NMS, the proposed CT 

Plan is necessary or appropriate in the 

public interest, for the protection of 

investors and the maintenance of fair 

and orderly markets, to remove 

impediments to, and perfect the 

mechanisms of, a national market 

system, or otherwise in furtherance of 

the purposes of the Act; 15

• Whether modifications to the 

proposed CT Plan, or conditions to its 

approval, would be required to make the 

proposed plan necessary or appropriate 

in the public interest, for the protection 

of investors and the maintenance of fair 

and orderly markets, to remove 

impediments to, and perfect the 

mechanisms of, a national market 

system, or otherwise in furtherance of 

the purposes of the Act; 16

• Whether the proposed CT Plan is 

consistent with Congress’s finding, in 

Section 11A(1)(C)(iii) of the Act, that it 

is in the public interest and appropriate 

for the protection of investors and the 

maintenance of fair and orderly markets 

to ensure ‘‘the availability to brokers, 

dealers, and investors or information 

with respect to quotations for and 

transactions in securities’’ 17

• Whether, consistent with the 

purposes of Section 11A(c)(1)(B) of the 

Act,18 the proposed CT Plan is 

appropriately structured, and whether 

its provisions are appropriately drafted, 

to support the prompt, accurate, 

reliable, and fair collection, processing, 

distribution, and publication of 

information with respect to quotations 

for and transactions in NMS securities, 

and the fairness and usefulness of the 

form and content of such information; 

• Whether the proposed CT Plan 

effectively addresses the inherent 

conflict of interest between the 

Participants’ collective responsibilities 

in overseeing the existing equity data 

plans and their individual interests in 

maximizing the viability of proprietary 

data products that they sell to market 

participants, as well as the 

concentration of voting power in the 

existing equity data plans among a few 

large exchange groups; and 

• Whether the provisions of the 

proposed CT Plan that were not 

mandated by the Governance Order are 

consistent with the Act and the rules 

and regulations issued thereunder that 

are applicable to NMS plans.19

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues raised above. 

IV. Commission’s Solicitation of 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposals. In particular, the 

Commission invites the written views of 

interested persons concerning whether 

the proposals are consistent with 

Section 11A or any other provision of 

the Act, or the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 608(b)(2)(i) of Regulation NMS,20

any request for an opportunity to make 

an oral presentation.21

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposals should be approved or 

disapproved by February 5, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by February 19, 2021. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number 4– 

757 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to: Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number 4–757. This file number should 

be included on the subject line if email 

is used. To help the Commission 

process and review your comments 

more efficiently, please use only one 

method. The Commission will post all 

comments on the Commission’s internet 

website (http://www.sec.gov/rules/ 

sro.shtml). Copies of the submission, all 

subsequent amendments, all written 

statements with respect to the proposed 

rule change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the 

Participants’ principal offices. All 

comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number 4–757 and should be 

submitted on or before February 5, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00810 Filed 1–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34169; 812–15171] 

ETF Series Solutions and Distillate 

Capital Partners LLC 

January 11, 2021. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application under 

Section 6(c) of the Investment Company 

Act of 1940 (‘‘Act’’) for an exemption 

from Section 15(a) of the Act, 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 

4144 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

1The 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. 

2The 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. 

3A ‘‘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. 

4Applicants note that all other items required by 

Sections 6–07(2)(a), (b) and (c) of Regulation S–X 

will be disclosed. 

5All 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. 

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: ETF Series Solutions 

(‘‘Trust’’), a Delaware statutory trust 

registered under the Act as an open-end 

management investment company with 

multiple series (each a ‘‘Fund’’) and 

Distillate Capital Partners LLC (‘‘Initial 

Adviser’’), an Illinois 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. 

FILING DATES: The application was filed 

on October 14, 2020. 

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 

the Commission by 5:30 p.m. on 

February 5, 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: 

Michael D. Barolsky, ETF Series 

Solutions, by email: michael.barolsky@

usbank.com. 

FOR FURTHER INFORMATION CONTACT: 

Alfred Tierney, Senior Counsel, at (323) 

965–4509, or Parisa Haghshenas, Branch 

Chief, at (202) 551–6821 (Division of 

Investment Management, Chief 

Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file number 

or an Applicant using the ‘‘Company’’ 

name box, at http://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. 

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 

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 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4145 

6Applicants 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. 

7The Sub-Advisers will be registered with the 

Commission as an investment adviser under the 

Advisers Act or not subject to such registration. 

8A ‘‘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. 

9A ‘‘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. 

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. 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 

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. 

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. 

4146 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

11Carillon Series Trust, et al., Investment Co. Act 

Rel. Nos. 33464 (May 2, 2019) (notice) and 33494 

(May 29, 2019) (order). 

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 

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 

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 

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 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4147 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange initially filed to adopt the fee 

waiver and waive the BTL fee in 2015. See 

Securities Exchange Act Release No. 74031 (January 

12, 2015), 80 FR 2462 (January 16, 2015) (SR– 

NYSE–2014–78). The Exchange has filed to extend 

the fee waiver and waive the BTL fee for each 

calendar year since 2017. See Securities Exchange 

Act Release Nos. 79710 (December 29, 2016), 82 FR 

1395 (January 5, 2017) (SR–NYSE–2016–89); 82418 

(December 28, 2017), 83 FR 568 (January 4, 2018) 

(SR–NYSE–2017–70); 84899 (December 20, 2018), 

83 FR 67395 (December 28, 2018) (SR–NYSE–2018– 

65); and 87952 (January 13, 2020), 85 FR 3089 

(January 17, 2020) (SR–NYSE–2019–73). 

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 

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. 2021–00803 Filed 1–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90891; File No. SR–NYSE– 

2021–03] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend its 

Price List To Extend a Waiver of New 

Firm Application Fees for Certain 

Applications and of Bond Trading 

License Fees 

January 11, 2021. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

4, 2021, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

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 proposes to amend its 

Price List to (1) extend a fee waiver for 

new firm application fees for applicants 

seeking only to obtain a bond trading 

license (‘‘BTL’’) for 2021; and (2) waive 

the BTL fee for 2021. The Exchange 

proposes to implement the fee changes 

effective January 4, 2021. The proposed 

rule change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, 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 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Price List to (1) extend a fee waiver for 

new firm application fees for applicants 

seeking only to obtain a BTL for 2021; 

and (2) waive the BTL fee for 2021.4 The 

Exchange proposes to implement the fee 

changes effective January 4, 2021. 

The Exchange currently charges a 

New Firm Fee ranging from $2,500 to 

$20,000, depending on the type of firm, 

which is charged per application for any 

broker-dealer that applies to be 

approved as an Exchange member 

organization. The Exchange proposes to 

amend the Price List to waive the New 

Firm Fee for 2021 for new member 

organization applicants that are seeking 

only to obtain a BTL and not trade 

equities at the Exchange. The proposed 

waiver of the New Firm Fee would be 

available only to applicants seeking 

approval as a new member organization, 

including carrying firms, introducing 

firms, or non-public organizations, 

which would be seeking to obtain a BTL 

at the Exchange and not trade equities. 

Further, if a new firm that is approved 

as a member organization and has had 

the New Firm Fee waived converts a 

BTL to a full trading license within one 

year of approval, the New Firm Fee 

would be charged in full retroactively. 

The Exchange believes that charging the 

New Firm Fee retroactively within a 

year of approval is appropriate because 

it would discourage applicants to claim 

that they are applying for a BTL solely 

to avoid New Firm Fees. 

Additionally, the Exchange currently 

charges a BTL fee of $1,000 per year. 

The Exchange proposes to amend the