8416 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Rule 6.86–O. See also Securities Exchange 

Act Release No. 55156 (January 23, 2007), 72 FR 

4759 (February 21, 2007) (SR–NYSEArca–2006–73) 

(order approving the Rule). 

5A series may be considered ‘‘active’’ on an 

intraday basis if: (i) The series trades at any options 

exchange; (ii) NYSE Arca receives an order in the 

series; or (iii) NYSE Arca receives a request for 

quote from a customer in that series.’’ See 

Commentary .03 to Rule 6.86–O. 

6See Securities Exchange Act Release No. 54590 

(October 12, 2006), 71 FR 61525 (October 18, 2006) 

(SR–NYSEArca-2006–73) (notice regarding 

proposed adoption of the Rule) (‘‘Notice’’). See also 

Securities Exchange Act Release No. 88532 (April 

1, 2020), 85 FR 19545 (April 7, 2020) (File No. 4– 

443) (order approving Amendment No. 5 to the Plan 

for the Purpose of Developing and Implementing 

Procedures to Facilitate the Listing and Trading of 

Standardized Options). 

7See id., Notice, 71 FR at 61527. For example, in 

2006–2007, OPRA had the capacity to process 

360,000 message per second and, at its peak 

message rate, the Exchange accounted for 15% of 

OPRA capacity, sending 55, 248 message per 

second for active series. 

8OPRA has delegated certain functions pertaining 

to planning the capacity of the OPRA System to an 

Independent System Capacity Advisor (‘‘ISCA’’) 

that ‘‘may provide less than all of the capacity that 

has been requested if it determines (a) that the 

capacity requests of one or more of the parties are 

unreasonable, or (b) that it is not reasonable to 

develop or maintain a System that has capacity 

sufficient to satisfy the requests of the parties.’’ See 

the OPRA Capacity Guidelines, at p. 1, available 

here, https://assets.website-files.com/ 

5ba40927ac854d8c97bc92d7/ 

5bf419b52de21fff3e88107f_capacity_guidelines.pdf. 

The Exchange has never been informed by the ISCA 

that the capacity it has requested cannot be met for 

any reason, including because the ISCA had 

deemed the request to be unreasonable. Thus, the 

Exchange believes that any increase in quote traffic 

that might be sent to OPRA as a result of the current 

proposal should not impact any other exchange’s 

capacity at OPRA. 

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 SR–CBOE–2021–008, and 

should be submitted on or before 

February 26, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02396 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91038; File No. SR– 

NYSEArca–2021–09] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To Amend Rule 6.86–O 

To Eliminate the Use of Dark Series on 

the Exchange 

February 1, 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 

26, 2021, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ 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 self-regulatory 

organization. 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 

Rule 6.86–O (Firm Quotes) to eliminate 

the use of dark series on the Exchange. 

The proposed 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 purpose of this rule change is to 

eliminate the exclusion of inactive or 

‘‘dark’’ series (as described below) from 

the requirements of Rule 6.86–O (Firm 

Quotes) and to delete in its entirety 

Commentary .03 to Rule 6.86–O in its 

entirety. 

Rule 6.86–O describes the obligations 

of the Exchange to collect, process and 

make available to quotation vendors the 

best bid and best offer for each option 

series that is a reported security.4

However, under Commentary .03 to 

Rule 6.86–O, the only quote messages 

that the Exchange sends to Options 

Price Reporting Authority (‘‘OPRA’’) are 

quotes for ‘‘active’’ series, which are 

defined as any series that: (i) Has traded 

on any options exchange in the previous 

14 calendar days; (ii) is solely listed on 

the Exchange; (iii) has been trading ten 

days or less; or (iv) is a series in which 

the Exchange has an order.5 Any 

options series that falls outside of the 

above categories of ‘‘active’’ series are 

deemed inactive or ‘‘dark’’ series. As 

such, under the Rule, the Exchange still 

accepts quotes from OTP Holders in 

these series; however, such quotes are 

not disseminated to OPRA. The 

Exchange proposes to modify Rule 6.86– 

O and to delete Commentary. 03 to Rule 

6.86–O to eliminate the use of ‘‘dark’’ 

series. 

By way of background, Commentary 

.03 to Rule 6.86 was adopted over a 

decade ago in connection with the 

Penny Pilot Program, which has since 

been made permanent.6 At that time, 

there were five options exchanges and 

an industry-wide concern about 

‘‘capacity issues related to excessive 

quoting rates.’’ 7 However, since that 

time, 11 new exchanges launched, 

resulting in a total 16 options 

exchanges. With the increase in the 

number of exchanges, and associated 

quote traffic, OPRA capacity has been 

increased without issue. 

As discussed further below, the 

Exchange believes that OPRA has the 

capacity to accommodate any increase 

in quote traffic from the Exchange 

arising from the publication of quotes in 

‘‘dark series.’’ As an OPRA participant, 

the Exchange makes capacity requests to 

OPRA. Notwithstanding Commentary 

.03 to Rule 6.86–O, when the Exchange 

makes capacity requests to OPRA, it has 

always factored the total quote traffic it 

receives from Market Makers, including 

quotes in dark series.8 In other words, 

the Exchange presumes that all series 

will be active and therefore requests 

capacity to accommodate sending 

quotes for all series to OPRA. As such, 

the Exchange does not believe the 

proposed rule change would impact or 

change its capacity requests to OPRA. 

Nor would it change the total amount of 

capacity needed at OPRA to 

accommodate quotes in dark series from 

the Exchange because those series have 

already been factored into the 

Exchange’s capacity requests to OPRA. 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 8417 

9See Securities Exchange Act Release No. 61977 

(April 23, 2010), 75 FR 22884 (April 30, 2010) (SR– 

NYSEArca–2010–30). See also OLPP, available at, 

http://www.theocc.com/clearing/industry-services/ 

olpp.jsp. 

10Rule 6.4A–O codified Amendment No. 3 to the 

OLPP. See Securities Exchange Act Release No. 

60531 (August 19, 2009), 74 FR 43173 (File No. 4– 

443). See also Rule 6.4A–O. 

11 Id., 74 FR at 43174. 

12When the Exchange adopted its quote 

mitigation rule, which the Exchange copied, it 

estimated that deployment of the rule would reduce 

its quote traffic by 20–30%. See supra note 6, 

Notice, 71 FR at 61527. In actuality, the rule has 

resulted in a reduction of approximately 10% of 

quote message traffic to OPRA. The Exchange 

believes this disparity was a result of the number 

of ‘‘inactive’’ series being much lower than 

anticipated because of increased competition and 

quoting activity as well as limitations on 

proliferation of unnecessary strikes, per the OLPP. 

13See Securities Exchange Act Release No. 65573 

(October 14, 2011), 76 FR 65305 (October 20, 2011) 

(SR–NYSEArca–2011–59). 

14An ‘‘adjusted series’’ is ‘‘an option series 

wherein, as a result of a corporate action by the 

issuer of the underlying security, one option 

contract in the series represents the delivery of 

other than 100 shares of underlying stock or 

Exchange-Traded Fund Shares.’’ See Commentary 

.01 to Rule 6.37A–O. 

15See supra note 13, 76 FR at 65306. 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

Similarly, because OPRA publishes 

quote capacity information to the 

market (which already incorporates 

capacity planning that includes quotes 

in dark series that would be 

disseminated to OPRA), market 

participants (including data vendors 

and subscribers) have the opportunity to 

prepare for and make any necessary 

accommodations for anticipated quote 

traffic. Accordingly, the elimination of 

the Exchange’s suppression of quotes in 

dark series should not impact market 

participants or downstream users that 

consume Exchange or OPRA data. Thus, 

the Exchange believes that this proposal 

would not impact its capacity requests 

to OPRA nor would it impact market 

participants or downstream consumers 

of OPRA data. 

The Exchange also believes that the 

proposed discontinuation of its 

suppression of quotes in dark series 

would increase transparency and 

enhance price discovery. Specifically, as 

proposed, all Market Maker quotes 

(including in ‘‘inactive series’’ under the 

current Rule) would be displayed and 

reflected in the market to the benefit of 

all market participants who would be on 

notice of such liquidity. The Exchange 

also notes that, over the years, certain 

market participants have expressed 

confusion regarding what quotes are 

being published and which are being 

suppressed. Therefore, the Exchange 

believes that the proposal would remove 

the element of potential confusion 

among market participants by 

publishing all quotes (not just those in 

active series) in the disseminated quote 

feed. 

Importantly, since the adoption of 

Commentary .03 to Rule 6.86–O, the 

Exchange has implemented the 

following measures that serve as 

additional safeguards against excessive 

quoting: 

Monitoring: The Exchange actively 

monitors the quotation activity of its Market 

Makers. When the Exchange detects that a 

Market Maker is disseminating an unusual 

number of quotes, the Exchange contacts that 

Market Maker and alerts it to such activity. 

Such monitoring may reveal that the Market 

Maker may have internal system issues or has 

incorrectly set system parameters that were 

not immediately apparent. Alerting a Market 

Maker to the heightened levels of activity 

will usually result in a change that reduces 

the number of quotes sent to the Exchange by 

the Market Maker. 

—Codification of select provisions of the 

Options Listing Procedures Plan (‘‘OLPP’’) in 

Rule 6.4A–O.9 The OLPP is a national market 

system plan that, among other things, sets 

forth procedures governing the listing of new 

options series. From the OLPP, the Exchange 

incorporated in Rule 6.4A–O ‘‘applied 

uniform standards to the range of options 

series exercise (or strike) prices available for 

trading on the [Exchange] as a quote 

mitigation strategy.’’ 10 In approving the 

OLPP provisions, subsequently incorporated 

in Rule 6.4A–O, the Commission indicated 

that ‘‘adopting uniform standards to the 

range of options series exercise (or strike) 

prices available for trading on the [Exchange] 

should reduce the number of option series 

available for trading, and thus should reduce 

increases in the options quote message traffic 

because market participants will not be 

submitting quotes in those series.’’ 11 The 

Exchange believes that adherence to the 

OLPP standard for strike listings has 

contributed to the decline of the number of 

strikes listed, which has in turn, reduced the 

amount of quotes in ‘‘dark series.’’ that were 

held back from OPRA.12

—Refined Market Maker Quoting 

Obligations: One year after adopting select 

provisions of the OLPP, the Exchange refined 

the quoting obligations applicable to Market 

Makers as a quote mitigation strategy.13

Specifically, the Exchange adopted 

Commentary .01 to Rule 6.37A–O, which 

states that Lead Market Makers’ and Market 

Makers’ continuous quoting obligations 

‘‘shall not apply to Market Makers with 

respect to adjusted option series, and series 

with a time to expiration of nine months or 

greater, for options on equities and Exchange 

Traded Fund Shares, and series with a time 

to expiration of twelve months or greater for 

Index options.’’ 14 Because there are no 

Market Maker quoting obligations associated 

with adjusted options series, there is a 

reduction in quote traffic that is sent to 

OPRA. Indeed, in approving the text of 

Commentary .01 to Rule 6.37A–O, the 

Commission noted, ‘‘. . . the Exchange’s 

proposal would reduce the burden on market 

makers to submit continuous quotes that the 

Exchange may not submit to OPRA.’’ 15

The Exchange believes that these 

quote mitigation strategies would allow 

the Exchange to continue to effectively 

mitigate quote message traffic. 

In connection with the foregoing, the 

Exchange proposes to amend paragraphs 

(b)(1) and (b)(2) of Rule 6.86–O to delete 

references to the ‘‘Quote Mitigation 

Plan,’’ and to delete in its entirety 

Commentary .03 to Rule 6.86–O. 

Implementation 

The Exchange will announce the 

implementation date of the proposed 

rule change in a Trader Update within 

60 days of rule approval. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),16 in general, and furthers 

the objectives of Section 6(b)(5) of the 

Act,17 in particular, in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The Exchange believes that the 

proposed elimination of Commentary 

.03 to Rule 6.86–O (and references to 

quote mitigation in Rule 6.86–O) would 

promote just and equitable principles of 

trade, as well as serve to remove 

impediments to and perfect the 

mechanism of a free and open market 

because the Exchange’s systems 

capacity is more than sufficient to 

accommodate any increase in quote 

traffic to OPRA as a result of the 

proposed rule change. First, the 

Exchange believes that the proposed 

rule change would promote just and 

equitable principles of trade, as well as 

serve to remove impediments to and 

perfect the mechanism of a free and 

open market because the proposed 

change would increase transparency 

and enhance price discovery. 

Specifically, as proposed, all Market 

Maker quotes (including those in 

‘‘inactive series’’ under the current 

Rule) would be displayed and reflected 

in the market to the benefit of all market 

participants who would be on notice of 

such liquidity. The Exchange also 

believes that the proposal would remove 

the element of potential confusion 

among market participants by 

publishing all quotes (not just those in 

active series) in the disseminated quote 

feed. 


jbell on DSKJLSW7X2PROD with NOTICES
8418 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

In addition, the proposed change 

would promote just and equitable 

principles of trade, as well as serve to 

remove impediments to and perfect the 

mechanism of a free and open market 

because the Exchange’s capacity 

requests already presume that all series 

are active. Hence, the Exchange believes 

that the existing capacity planning at 

OPRA already factors in quotes in dark 

series being lit and therefore does not 

believe that the elimination of this rule 

(and any resulting increase in quote 

traffic) would have a negative impact on 

capacity. 

The Exchange further believes that the 

existing quote mitigation strategies (i.e., 

monitoring of quoting activity, 

codification of the OLPP, and refined 

Market Maker quoting obligations) 

employed by the Exchange serve to 

reduce the potential for excessive 

quoting and therefore reduce quote 

traffic. 

Importantly, the circumstances giving 

rise to Commentary .03 to Rule 6.86– 

O—industry-wide concern about 

‘‘capacity issues related to excessive 

quoting rates’’—has subsided given that 

OPRA capacity has increased 

exponentially over the last decade 

coincident with the influx of new 

options exchanges. In addition, the 

proposed increase in quote traffic as a 

result of this proposal is minimal and 

therefore unlikely to adversely impact 

the flow of message traffic and/or harm 

downstream consumers of OPRA data. 

As noted above, the increase in quotes 

message traffic in dark series is already 

considered in the Exchange’s capacity 

requests to OPRA and already published 

to downstream users of OPRA data. As 

such, the Exchange believes the 

proposed change would not impede the 

protection of investors and the public 

interest. Thus, the Exchange believes 

there is sufficient capacity at OPRA to 

accommodate any additional quote 

traffic that will result from elimination 

of dark series. The Exchange therefore 

believes that its proposal will not 

impact the protection of investors and 

the public interest. 

Finally, as discussed above, the 

Exchange does not anticipate that its 

proposal would negatively impact 

systems capacity. However, to the extent 

it does, the Exchange has analyzed its 

capacity and represents that it and the 

OPRA have the necessary systems 

capacity to handle any incremental 

additional traffic associated with this 

proposed rule change. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

as discussed above, the Exchange 

believes that any increase in quote 

traffic that might be sent to OPRA as a 

result of the proposed rule change 

would be minimal and should not 

impact any other exchange’s capacity at 

OPRA. The Exchange likewise believes 

that there would be no adverse impact 

on any downstream consumers of OPRA 

data given that any increase in quote 

traffic would be minimal and has 

already been included in the Exchange’s 

capacity planning requests to OPRA. 

Intramarket Competition. The 

elimination of ‘‘dark series’’ would 

increase intra market competition and 

improve quote quality, because prices 

and sizes of all Exchange quotations 

would be sent to OPRA to be published 

and updated. At present, Market Makers 

cannot ‘‘see’’ the internal best bid and 

offer in a dark series, nor can they 

improve upon the displayed market to 

establish price/time priority. This 

proposal to publish the quotes in 

inactive series will enhance intramarket 

competition because Market Makers will 

be able to submit more competitive 

quotes. 

Intermarket Competition. For reasons 

similar to those described in the 

Intramarket Competition section, 

eliminating the use of dark series and 

publishing to OPRA the Exchange’s 

previously unpublished quotes on such 

series would increase competition 

between markets, because NYSE Arca’s 

quotes would now be visible and 

included in the calculation of the 

NBBO. Including all of NYSE Arca’s 

quotes in the NBBO (including those in 

dark series), an options participant will 

know if an order should be sent to 

NYSE Arca to get the best price. Market 

Makers that use a strategy to ‘‘match’’ 

the NBBO will now need to factor NYSE 

Arca quotes into their calculations. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) by order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

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 SR– 

NYSEArca–2021–09 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 SR–NYSEArca–2021–09. 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 principal 

office of the Exchange. 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 SR–NYSEArca–2021–09 and 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 8419 

18 17 CFR 200.30–3(a)(12). 

1Applicants request relief with respect to the 

named Applicants, including the Existing Funds, as 

well as to any future series of the Trust and any 

other registered open-end management investment 

company or series thereof that: (a) Is advised by the 

Adviser or any entity controlling, controlled by or 

under common control with the Adviser or its 

successors (each, an ‘‘Adviser’’); (b) uses the multimanager structure described in the application; and 

(c) complies with the terms and conditions set forth 

in the application (each, a ‘‘Sub-Advised Fund’’). 

For purposes of the requested order, ‘‘successor’’ is 

limited to an entity that results from a 

reorganization into another jurisdiction or a change 

in the type of business organization. 

2A ‘‘Sub-Adviser’’ for a Sub-Advised Fund is (1) 

an indirect or direct ‘‘wholly-owned subsidiary’’ (as 

such term is defined in the Act) of the Adviser for 

that Sub-Advised Fund, or (2) a sister company of 

the Adviser for that Sub-Advised Fund that is an 

indirect or direct ‘‘wholly-owned subsidiary’’ of the 

same company that, indirectly or directly, wholly 

owns the Adviser (each of (1) and (2) a ‘‘WhollyOwned Sub-Adviser’’ and collectively, the 

‘‘Wholly-Owned Sub-Advisers’’), or (3) not an 

‘‘affiliated person’’ (as such term is defined in 

section 2(a)(3) of the Act) of the Sub-Advised Fund, 

the Trust, or the Adviser, except to the extent that 

an affiliation arises solely because the Sub-Adviser 

serves as a sub-adviser to a Sub-Advised Fund or 

as an investment adviser or sub-adviser to any 

series of the Trust other than the Sub-Advised 

Funds (‘‘Non-Affiliated Sub-Adviser’’). 

3The requested relief will not extend to any subadviser, other than a Wholly-Owned Sub-Adviser, 

who is an affiliated person, as defined in section 

2(a)(3) of the Act, of the Sub-Advised Fund or of 

the Adviser, other than by reason of serving as a 

sub-adviser to one or more of the Sub-Advised 

Funds or as an investment adviser or sub-adviser to 

any series of the Trust other than the Sub-Advised 

Funds (‘‘Affiliated Sub-Adviser’’). 

should be submitted on or before 

February 26, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02410 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34184; 812–15166] 

The Advisors’ Inner Circle Fund and 

Pathstone Family Office, LLC; Notice 

of Application 

February 1, 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 and rule 18f–2 

under 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, and sections 6–07(2)(a), (b), and 

(c) of Regulation S–X (‘‘Disclosure 

Requirements’’). The requested 

exemption would permit an investment 

adviser to hire and replace certain subadvisers without shareholder approval 

and grant relief from the Disclosure 

Requirements as they relate to fees paid 

to the sub-advisers. 

APPLICANTS: The Advisors’ Inner Circle 

Fund (the ‘‘Trust’’), a Massachusetts 

business trust registered under the Act 

as an open-end management investment 

company that offers the Cornerstone 

Advisors Core Plus Bond Fund and the 

Cornerstone Advisors Global Public 

Equity Fund (the ‘‘Existing Funds’’), and 

Pathstone Family Office, LLC (the 

‘‘Adviser’’), a Delaware limited liability 

company that is registered as an 

investment adviser under the 

Investment Advisers Act of 1940 

(collectively with the Trust, the 

‘‘Applicants’’). 

FILING DATES: The application was filed 

on September 29, 2020, and amended 

on January 15, 2021. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the application will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on February 25, 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 

writing to the Commission’s Secretary. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

the Trust, mbeattie@seic.com, and the 

Adviser, lwilmott@pathstone.com (with 

a copy to sean.graber@

morganlewis.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 http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Summary of the Application 

1. The Adviser will serve as the 

investment adviser to each Sub-Advised 

Fund pursuant to an investment 

advisory agreement with the Trust (the 

‘‘Investment Management 

Agreement’’).1 Under the terms of each 

Investment Management Agreement, the 

Adviser, subject to the supervision of 

the board of trustees of the Trust (the 

‘‘Board’’) will provide continuous 

investment management of the assets of 

each Sub-Advised Fund. Consistent 

with the terms of each Investment 

Management Agreement, the Adviser 

may, subject to the approval of the 

Board, delegate portfolio management 

responsibilities of all or a portion of the 

assets of a Sub-Advised Fund to one or 

more Sub-Advisers.2 The Adviser will 

continue to have overall responsibility 

for the management and investment of 

the assets of each Sub-Advised Fund. 

The Adviser will evaluate, select and 

recommend Sub-Advisers to manage the 

assets of a Sub-Advised Fund and will 

oversee, monitor, and review the SubAdvisers and their performance and 

recommend the removal or replacement 

of Sub-Advisers. 

2. Applicants request an order to 

permit the Adviser, subject to Board 

approval, to enter into investment subadvisory agreements with the SubAdvisers (each, a ‘‘Sub-Advisory 

Agreement’’) and materially amend such 

Sub-Advisory Agreements without 

obtaining the shareholder approval 

required under section 15(a) of the Act 

and rule 18f–2 under the Act.3

Applicants also seek an exemption from 

the Disclosure Requirements to permit a 

Sub-Advised Fund to disclose (as both 

a dollar amount and a percentage of the 

Sub-Advised Fund’s net assets): (a) The 

aggregate fees paid to the Adviser and 

any Wholly-Owned Sub-Adviser; (b) the 

aggregate fees paid to Non-Affiliated 

Sub-Advisers; and (c) the fee paid to 

each Affiliated Sub-Adviser 

(collectively, ‘‘Aggregate Fee 

Disclosure’’). 

3. Applicants agree that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the application. Such terms 

and conditions provide for, among other 

safeguards, appropriate disclosure to 

Sub-Advised Fund shareholders and 


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