Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Notices 11341 

1The term ‘‘Board’’ also includes the board of 

trustees or directors of a future Subadvised Series 

(as defined below). 

2The term ‘‘Independent Trustees’’ means the 

members of the Board who are not parties to the 

Sub-Advisory Agreement (as defined below), or 

‘‘interested persons’’, as defined in Section 2(a)(19) 

of the Act, of any such party. 

3Applicants do not request relief that would 

permit the Board and the Independent Trustees to 

approve renewals of Sub-Advisory Agreements at 

non-in-person meetings. 

4The term ‘‘Adviser’’ includes (i) the Adviser or 

its successors, and (ii) any entity controlling, 

controlled by or under common control with, the 

Adviser or its successors. 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. 

5The term ‘‘Subadvised Series’’ also includes a 

wholly-owned subsidiary, as defined in the Act, of 

a Subadvised Series (each a ‘‘Subsidiary’’) and the 

term ‘‘Sub-Adviser’’ includes any Sub-Adviser to a 

Subsidiary. All registered open-end investment 

companies that currently intend to rely on the 

requested order are named as applicants. Any entity 

that relies on the requested order will do so only 

in accordance with the terms and conditions 

contained in the application. 

concern market dominant product(s), 

applicable statutory and regulatory 

requirements include 39 U.S.C. 3622, 39 

U.S.C. 3642, 39 CFR part 3030, and 39 

CFR part 3040, subpart B. For request(s) 

that the Postal Service states concern 

competitive product(s), applicable 

statutory and regulatory requirements 

include 39 U.S.C. 3632, 39 U.S.C. 3633, 

39 U.S.C. 3642, 39 CFR part 3035, and 

39 CFR part 3040, subpart B. Comment 

deadline(s) for each request appear in 

section II. 

1. Docket No(s).: MC2021–70 and 

CP2021–73; Filing Title: USPS Request 

to Add Priority Mail Express & Priority 

Mail Contract 124 to Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: February 18, 2021; Filing 

Authority: 39 U.S.C. 3642, 39 CFR 

3040.130 through 3040.135, and 39 CFR 

3035.105; Public Representative: 

Christopher C. Mohr; Comments Due: 

February 26, 2021. 

This Notice will be published in the 

Federal Register. 

Erica A. Barker, 

Secretary. 

[FR Doc. 2021–03832 Filed 2–23–21; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34197; 812–15130] 

Columbia Funds Series Trust, et al. 

February 18, 2021. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application under 

Section 6(c) of the Investment Company 

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

from Section 15(c) of the Act. 

Applicants: Columbia Funds Series 

Trust, Columbia Funds Series Trust I, 

Columbia Funds Series Trust II, 

Columbia Funds Variable Insurance 

Trust, Columbia Funds Variable Series 

Trust II, Columbia ETF Trust I and 

Columbia ETF Trust II (each a ‘‘Trust’’), 

each of which is either a Massachusetts 

business trust or a Delaware statutory 

trust and is registered under the Act as 

an open-end management investment 

company with multiple series, and 

Columbia Management Investment 

Advisers, LLC (‘‘Adviser’’), a Minnesota 

limited liability company registered as 

an investment adviser under the 

Investment Advisers Act of 1940 

(‘‘Advisers Act’’) that serves an 

investment adviser to such series 

(collectively the ‘‘Applicants’’). 

Summary of Application: The 

requested exemption would permit each 

Trust’s board of trustees (the ‘‘Board’’) 

to approve new sub-advisory 

agreements and material amendments to 

existing sub-advisory agreements for the 

Subadvised Series (as defined below), 

without complying with the in-person 

meeting requirement of Section 15(c) of 

the Act. 

Filing Dates: The application was 

filed on May 26, 2020, and amended on 

September 24, 2020 and November 10, 

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 March 

15, 2020, and should be accompanied 

by proof of service on applicants, in the 

form of an affidavit or, for lawyers, a 

certificate of service. Pursuant to rule 0– 

5 under the Act, hearing requests should 

state the nature of the writer’s interest, 

any facts bearing upon the desirability 

of a hearing on the matter, the reason for 

the request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary at 

Secretarys-Office@sec.gov. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

Columbia Funds Series Trust; Columbia 

Funds Series Trust I; Columbia Funds 

Series Trust II; Columbia Funds 

Variable Insurance Trust; Columbia 

Funds Variable Series Trust II; 

Columbia ETF Trust I; Columbia ETF 

Trust II; and Columbia Management 

Investment Advisers, LLC, c/o Ryan C. 

Larrenaga, Columbia Management 

Investment Advisers, LLC, 

ryan.c.larrenaga@

columbiathreadneedle.com. 

FOR FURTHER INFORMATION CONTACT: 

Harry Eisenstein, Senior Special 

Counsel, at (202) 551–6764, or Kaitlin C. 

Bottock, 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 exemption 

from Section 15(c) of the Act to permit 

the Board,1 including the Independent 

Trustees,2 to approve an agreement 

(each a ‘‘Sub-Advisory Agreement’’) 

pursuant to which a sub-adviser 

manages all or a portion of the assets of 

one or more of the series, or a material 

amendment thereof (a ‘‘Sub-Adviser 

Change’’), without complying with the 

in-person meeting requirement of 

Section 15(c).3 Under the requested 

relief, the Independent Trustees could 

instead approve a Sub-Adviser Change 

at a meeting at which members of the 

Board participate by any means of 

communication that allows them to hear 

each other simultaneously during the 

meeting. 

2. Applicants request that the relief 

apply to Applicants, as well as to any 

future series of the Trust 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; 4 (ii) uses 

the multi-manager structure described 

in the application; and (iii) complies 

with the terms and conditions of the 

application (each, a ‘‘Subadvised 

Series’’).5

II. Management of the Subadvised 

Series 

3. The Adviser will serve as the 

investment adviser to each Subadvised 

Series pursuant to an investment 

advisory agreement with the Trust (each 

an ‘‘Investment Management 

Agreement’’). The Adviser, subject to 

the oversight of the Board, will provide 


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11342 Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Notices 

6A Sub-Advisory Agreement may also be subject 

to approval by a Subadvised Series’ shareholders. 

Applicants currently rely on a multi-manager 

exemptive order to enter into and materially amend 

Sub-Advisory Agreements without obtaining 

shareholder approval. See Columbia Funds Series 

Trust, et al., Investment Company Act Release Nos. 

33495 (May 30, 2019) (notice) and 33519 (June 26, 

2019) (order). 

7A sub-adviser may manage the assets of a 

Subadvised Series directly or provide the Adviser 

with model portfolio or investment 

recommendation(s) that would be utilized in 

connection with the management of a Subadvised 

Series. 

8Each sub-adviser would be registered with the 

Commission as an investment adviser under the 

Advisers Act or not subject to such registration. 

9Applicants state that technology that includes 

visual capabilities will be used unless 

unanticipated circumstances arise. Applicants also 

state that the Board could not rely upon the relief 

to approve a Sub-Advisory Agreement by written 

consent or another form of absentee approval by the 

Board. 

continuous investment management 

services to each Subadvised Series. 

Applicants are not seeking an 

exemption from the Act with respect to 

the Investment Management 

Agreements. 

4. Applicants state that the 

Subadvised Series may seek to provide 

exposure to multiple strategies across 

various asset classes, thus allowing 

investors to more easily access such 

strategies without the additional 

transaction costs and administrative 

burdens of investing in multiple funds 

to seek to achieve comparable 

exposures. 

5. To that end, the Adviser may 

achieve its desired exposures to specific 

strategies by allocating discrete portions 

of the Subadvised Series’ assets to 

various sub-advisers. Consistent with 

the terms of each Investment 

Management Agreement and subject to 

the Board’s approval,6 the Adviser 

would delegate management of all or a 

portion of the assets of a Subadvised 

Series to a sub-adviser.7 Each subadviser would be an ‘‘investment 

adviser’’ to the Subadvised Series 

within the meaning of Section 2(a)(20) 

of the Act.8 The Adviser would retain 

overall responsibility for the 

management and investment of the 

assets of each Subadvised Series. 

III. Applicable Law 

6. Section 15(c) of the Act prohibits a 

registered investment company having a 

board from entering into, renewing or 

performing any contract or agreement 

whereby a person undertakes regularly 

to act as an investment adviser 

(including a sub-adviser) to the 

investment company, unless the terms 

of such contract or agreement and any 

renewal thereof have been approved by 

the vote of a majority of the investment 

company’s board members who are not 

parties to such contract or agreement, or 

interested persons of any such party, 

cast in person at a meeting called for the 

purpose of voting on such approval. 

7. 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 

8. Applicants assert that boards of 

registered investment companies, 

including the Board, typically hold inperson meetings on a quarterly basis. 

Applicants state that during the three to 

four month period between board 

meeting dates, market conditions may 

change or investment opportunities may 

arise such that the Adviser may wish to 

make a Sub-Adviser Change. Applicants 

also state that at these moments it may 

be impractical and costly to hold an 

additional in-person Board meeting, 

especially given the geographic 

diversity of Board members and the 

additional cost of holding in-person 

meetings. 

9. As a result, Applicants believe that 

the requested relief would allow the 

Subadvised Series to operate more 

efficiently. In particular, Applicants 

assert that without the delay inherent in 

holding in-person Board meetings (and 

the attendant difficulty of obtaining the 

necessary quorum for, and the 

additional costs of, an unscheduled inperson Board meeting), the Subadvised 

Series would be able to act quicker and 

with less expense to add or replace subadvisers when the Board and the 

Adviser believe that a Sub-Adviser 

Change would benefit the Subadvised 

Series. 

10. Applicants also note that the inperson meeting requirement in Section 

15(c) of the Act was designed to prohibit 

absentee approval of advisory 

agreements. Applicants state that 

condition 1 to the requested relief is 

designed to avoid such absentee 

approval by requiring that the Board 

approve a Sub-adviser Change at a 

meeting where all participating Board 

members can hear each other and be 

heard by each other during the 

meeting.9

11. Applicants, moreover, represent 

that the Board would conduct any such 

non-in-person consideration of a SubAdvisory Agreement in accordance with 

its typical process for approving SubAdvisory Agreements. Consistent with 

Section 15(c) of the Act, the Board 

would request and evaluate such 

information as may reasonably be 

necessary to evaluate the terms of any 

Sub-Advisory Agreement, and the 

Adviser and sub-adviser would provide 

such information. 

12. Finally, Applicants note that that 

if one or more Board members request 

that a Sub-Adviser Change be 

considered in-person, then the Board 

would not be able to rely on the relief 

and would have to consider the SubAdviser Change at an in-person meeting. 

V. Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the following conditions: 

1. The Independent Trustees will 

approve a Sub-Adviser Change at a nonin-person meeting in which Board 

members may participate by any means 

of communication that allows those 

Board members participating to hear 

each other simultaneously during the 

meeting. 

2. Management will represent that the 

materials provided to the Board for the 

non-in-person meeting include the same 

information the Board would have 

received if a Sub-Adviser Change were 

sought at an in-person Board meeting. 

3. The notice of the non-in-person 

meeting will explain the need for 

considering the Sub-Adviser Change at 

a non-in-person meeting. Once notice of 

the non-in-person meeting to consider a 

Sub-Adviser Change is sent, Board 

members will be given the opportunity 

to object to considering the Sub-Adviser 

Change at a non-in-person Board 

meeting. If a Board member requests 

that the Sub-Adviser Change be 

considered in-person, the Board will 

consider the Sub-Adviser Change at an 

in-person meeting, unless such request 

is rescinded. 

4. A Subadvised Series’ ability to rely 

on the requested relief will be disclosed 

in the Subadvised Series’ registration 

statement. 

5. In the event that the Commission 

adopts a rule under the 1940 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. 


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Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Notices 11343 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(4) and (5). 

5NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 

2010) (quoting Securities Exchange Act Release No. 

59039 (December 2, 2008), 73 FR 74770, 74782–83 

(December 9, 2008) (SR–NYSEArca–2006–21)). 

6Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

7See Cboe EDGX U.S. Equities Exchange Fee 

Schedule, available at https://markets.cboe.com/us/ 

equities/membership/fee_schedule/edgx/. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–03715 Filed 2–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91159; File No. SR–Phlx– 

2021–09] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the 

Exchange’s Pricing Schedule at Equity 

7, Section 3 

February 18, 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 February 

10, 2021, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 the 

Exchange’s pricing schedule at Equity 7, 

Section 3, as described further below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/rules, 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 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

pricing schedule, at Equity 7, Section 3, 

to make a change to its Qualified Market 

Maker (‘‘QMM’’) Program. The QMM 

Program provides supplemental 

incentives to member organizations that 

meet certain quality standards in acting 

as market makers for securities on the 

Exchange. 

Specifically, the Exchange proposes to 

adjust upward the percentage of time for 

which a member organization must 

quote at the national best bid and offer 

(‘‘NBBO’’) during market hours to 

qualify as a QMM as set forth in Equity 

7, Section 3(c)(1). Currently, a member 

organization must quote at the NBBO at 

least 10 percent of the time during 

market hours in an average of at least 

400 securities per day during a month 

to qualify as a QMM. The Exchange 

proposes to increase the percentage to 

15 percent. 

The Exchange proposes to increase 

the threshold percentage of time in 

which a member organization must 

quote at the NBBO during a month to 

qualify as a QMM as a means of 

encouraging member organizations to 

increase liquidity adding activity, 

increase quoting at the NBBO, enhance 

price discovery, and improve the overall 

quality of the equity markets. The 

Exchange believes that QMM activity on 

the Exchange is already robust enough 

to accommodate the establishment of a 

higher qualification threshold without 

compromising the ability of existing 

QMMs to maintain their current statuses 

in the program. 

The Exchange also proposes to make 

conforming changes to Equity 7, Section 

3(c)(5) to add the proposed 15 percent 

NBBO requirement. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,3 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,4 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Proposal Is Reasonable 

The Exchange’s proposed changes to 

its QMM Program are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

equity securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . . .’’ 5

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 6

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for equity 

security transaction services. The 

Exchange is only one of several equity 

venues to which market participants 

may direct their order flow. Competing 

equity exchanges offer similar tiered 

pricing structures to that of the 

Exchange, including schedules of 

rebates and fees that apply based upon 

members achieving certain volume 

thresholds.7

Within this environment, market 

participants can freely and often do shift 


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