10846 Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 

1The Current Funds are the only registered 

closed-end investment companies that currently 

Robin W. Jones, Executive Secretary, at 

Robin.W.Jones@usdoj.gov. 

Kenneth E. Melson, 

Co-Chair, Subcommittee on Forensic Science. 

[FR Doc. 2010–4899 Filed 3–8–10; 8:45 am] 

BILLING CODE 4410–FY–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: Rule 31; SEC File No. 270–537; 

OMB Control No. 3235–0597. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Section 31 of the Securities Exchange 

Act of 1934 (15 U.S.C. 78ee) (‘‘Exchange 

Act’’) requires the Commission to collect 

fees and assessments from national 

securities exchanges and national 

securities associations (collectively, 

‘‘self-regulatory organizations’’ or 

‘‘SROs’’) based on the volume of their 

securities transactions. To collect the 

proper amounts, the Commission 

adopted Rule 31 (17 CFR 240.31) and 

Form R31 (17 CFR 249.11) under the 

Exchange Act whereby the SROs must 

report to the Commission the volume of 

their securities transaction and the 

Commission, based on that data, 

calculates the amount of fees and 

assessments that the SROs owe pursuant 

to Section 31. Rule 31 and Form R31 

require the SROs to provide this data on 

a monthly basis. 

The Commission estimates that each 

respondent makes 12 such filings on an 

annual basis at an average hourly 

burden of approximately 1.47 hours per 

response. Currently, there are 16 

respondents. However, based on past 

experience, the Commission is 

estimating an increase to 18 

respondents, including 13 national 

securities exchanges, two security 

futures exchanges, and one national 

securities association subject to the 

collection of information requirements 

of Rule 31 and two registered clearing 

agencies are required to provide certain 

data in their possession needed by the 

SROs to complete Form R31. The 

Commission estimates that the total 

burden for all 18 respondents is 318 

hours (12 filings/respondent per year × 

1.47 hours/filing × 18 respondents = 

317.52; rounded to 318 hours) per year. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimate of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

Please direct your written comments 

to: Charles Boucher, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia, 22312 or by 

sending an email to: 

PRA_Mailbox@sec.gov. 

Dated: March 2, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4914 Filed 3–8–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

29167; File No. 812–13676] 

The Chile Fund, Inc., et al.; Notice of 

Application 

March 2, 2010. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application under 

section 6(c) of the Investment Company 

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

from section 19(b) of the Act and rule 

19b–1 under the Act. 

Applicants: The Chile Fund, Inc. (‘‘Chile 

Fund’’), Aberdeen Australia Equity Fund 

(‘‘Australia Fund,’’ together with the 

Chile Fund, the ‘‘Current Funds’’), 

Aberdeen Asset Management Asia 

Limited (‘‘Aberdeen Asia’’) and 

Aberdeen Asset Management 

Investment Services Limited 

(‘‘Aberdeen’’). 

SUMMARY: Summary of Application: 

Applicants request an order to permit 

certain registered closed-end investment 

companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common stock as frequently as monthly 

in any one taxable year, and as 

frequently as distributions are specified 

by or in accordance with the terms of 

any outstanding preferred stock that 

such investment companies may issue. 

The requested order would supersede a 

prior order issued to the Australia Fund. 

DATES: Filing Dates: The application was 

filed on July 27, 2009, and amended on 

December 3, 2009, January 6, 2010, and 

February 25, 2010. 

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 March 29, 2010 and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Hearing requests should state 

the nature of the writer’s interest, the 

reason for the request, and the issues 

contested. Persons who wish to be 

notified of a hearing may request 

notification by writing to the 

Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1090; 

Applicants, c/o Aberdeen Asset 

Management Inc., 1735 Market Street, 

32nd Floor, Philadelphia, PA 19103. 

FOR FURTHER INFORMATION CONTACT: 

Lewis B. Reich, Senior Counsel, at (202) 

551–6919, or Jennifer L. Sawin, Branch 

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

Investment Management, Office of 

Investment Company Regulation). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http:// 

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

calling (202) 551–8090. 

Applicants’ Representations 

1. The Current Funds are both 

Maryland corporations registered under 

the Act as closed-end management 

investment companies.1 The common 


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Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 10847 

intend to rely on the requested order. Applicants 

request that the order also apply to each registered 

closed-end investment company that: (a) Is advised 

by either Aberdeen or Aberdeen Asia (including 

any successor in interest) or by any entity 

controlling, controlled by, or under common 

control (within the meaning of section 2(a)(9) of the 

Act) with Aberdeen or Aberdeen Asia (collectively 

with Aberdeen and Aberdeen Asia, ‘‘Advisers’’), and 

(b) decides in the future to rely on the order and 

complies with the terms and conditions of the 

application (collectively with the Current Funds, 

‘‘Funds’’ and each, a ‘‘Fund’’). A successor in interest 

is limited to entities that result from a 

reorganization into another jurisdiction or a change 

in the type of business organization. 

2The board of directors or trustees of any Fund, 

including the Current Funds, as used herein, a 

‘‘Board.’’ 

3The First Australia Fund, Inc., Release Nos. IC– 

23363 (July 28, 1998) (notice of application) and IC– 

23397 (August 24, 1998) (order). The Australia 

Fund was formerly named The First Australia 

Fund, Inc. 

stock of each Current Fund is listed on 

the NYSE Amex. Applicants believe that 

the shareholders of each Fund that 

would rely on the requested order are 

generally conservative, dividendsensitive investors who desire current 

income periodically. Although the 

Current Funds have not issued preferred 

stock, their boards of directors (the 

‘‘Chile Fund Board’’ and the ‘‘Australia 

Fund Board’’) or the board of directors 

or trustees of another Fund 2 may 

authorize such issuances in the future. 

2. Aberdeen and Aberdeen Asia are 

direct wholly-owned subsidiaries of 

Aberdeen Asset Management PLC, and 

are investment advisers registered under 

the Investment Advisers Act of 1940 

(‘‘Advisers Act’’). Aberdeen serves as 

investment adviser to and is responsible 

for the overall management of the Chile 

Fund, and Aberdeen Asia serves as 

investment adviser to and is responsible 

for the overall management of the 

Australia Fund. Any other Adviser will 

also be registered with the Commission 

under the Advisers Act. 

3. Applicants state that on June 24– 

25, 2009, the Chile Fund Board, 

including a majority of the members 

who are not ‘‘interested persons’’ as 

defined in section 2(a)(19) of the Act 

(the ‘‘Independent Directors’’) reviewed 

information regarding the purpose of the 

proposed distribution policy (a ‘‘Plan’’, 

and for the Chile Fund, the ‘‘Chile Fund 

Plan’’), the reasonably foreseeable effects 

of the Plan on the Fund’s long-term total 

return (in relation to market price and 

net asset value per share (‘‘NAV’’)), 

whether the rate of distribution under 

the Chile Fund Plan will exceed the 

Chile Fund’s expected total return (in 

relation to NAV). Applicants state that 

the Chile Fund Board, including a 

majority of the Independent Directors, 

also considered any conflicts of interest 

that Aberdeen, its affiliated persons, and 

affiliated persons of the Chile Fund 

might have with respect to the adoption 

or implementation of the Chile Fund 

Plan. Applicants further state that, after 

considering such information, the Chile 

Fund Board, including its Independent 

Directors, determined that the Chile 

Fund Plan was consistent with the 

Fund’s investment objectives and in the 

best interests of its stockholders, and 

adopted the Chile Fund Plan in respect 

of the Chile Fund’s outstanding 

common stock. 

4. Applicants state that, under the 

Chile Fund Plan, the Chile Fund would 

make level quarterly distributions based 

upon a fixed percentage of the rolling 

average of the Fund’s prior four quarterend net asset values. Applicants state 

that the purpose of the Chile Fund Plan 

is to allow the Chile Fund to make fixed 

periodic distributions to provide a 

steady return to the Chile Fund’s 

common stockholders. Applicants state 

that the annual distribution rate with 

respect to the Chile Fund’s common 

shares will be independent of the Chile 

Fund’s performance in any particular 

period but would be expected not to 

exceed the Chile Fund’s total return 

over time. Applicants explain that, 

except for extraordinary distributions 

and potential increases or decreases in 

the final dividend periods in light of the 

Fund’s performance for the entire 

calendar year and to enable the Fund to 

comply with the distribution 

requirements of subchapter M of the 

Internal Revenue Code of 1986 (‘‘Code’’) 

for the calendar year, each distribution 

on the common shares would be at the 

stated rate then in effect. 

5. Applicants state that prior to 

implementing the Chile Fund Plan, the 

Chile Fund Board will adopt policies 

and procedures under rule 38a–1 under 

the Act (a) that are reasonably designed 

to ensure that all notices required to be 

sent to the Chile Fund’s stockholders 

pursuant to section 19(a) of the Act, rule 

19a–1 thereunder and condition D 

below (each a ‘‘19(a) Notice’’) include 

the disclosure required by rule 19a–1 

and by condition B.1 below, and that all 

other written communications by the 

Chile Fund or its agents regarding 

distributions under the Plan include the 

disclosure required by condition C 

below, and (b) that require the Chile 

Fund to keep records that demonstrate 

compliance with all of the conditions of 

the order and that are necessary for the 

Chile Fund to form the basis for, or 

demonstrate the calculation of, the 

amounts disclosed in its 19(a) Notices. 

6. Applicants state that on December 

12, 1997, the Australia Fund, relying on 

a prior order (‘‘Prior Order’’),3 instituted 

a Plan with respect to the Australia 

Fund’s common stock (the ‘‘Australia 

Fund Plan’’) that was discontinued on 

March 14, 2002 and subsequently reinstituted on February 17, 2004. In 

instituting and re-instituting the 

Australia Fund Plan, the Australia Fund 

Board, including a majority of its 

Independent Directors, found that the 

Australia Fund Plan was in the best 

interests of the Australia Fund’s 

common stockholders. Applicants state 

that the purpose of the Australia Fund 

Plan is to allow the Australia Fund to 

make fixed periodic distributions to 

provide a steady return to the Australia 

Fund’s common stockholders. 

Applicants state that the annual 

distribution rate with respect to the 

Australia Fund’s common shares will be 

independent of the Australia Fund’s 

performance in any particular period 

but would be expected not to exceed the 

Australia Fund’s total return over time. 

Applicants explain that, except for 

extraordinary distributions and 

potential increases or decreases in the 

final dividend periods in light of the 

Fund’s performance for the entire 

calendar year and to enable the Fund to 

comply with the distribution 

requirements of subchapter M of the 

Internal Revenue Code of 1986 (‘‘Code’’) 

for the calendar year, each distribution 

on the common shares is at the stated 

rate then in effect. The Australia Fund 

Plan currently pays quarterly 

distributions at an annual rate, set once 

a year, that is a percentage of the rolling 

average of the Fund’s prior four quarterend net asset values. Prior to relying on 

the requested order in connection with 

the Australia Fund Plan, the Australia 

Fund Board will have taken the actions 

described in, and the Australia Fund 

will have satisfied the representations 

set forth in, the application. When the 

requested order is issued, it will 

supersede the Prior Order. 

Applicants’ Legal Analysis 

1. Section 19(b) generally makes it 

unlawful for any registered investment 

company to make long-term capital 

gains distributions more than once each 

year. Rule 19b–1 limits the number of 

capital gains dividends, as defined in 

section 852(b)(3)(C) of the Code 

(‘‘distributions’’), that a fund may make 

with respect to any one taxable year to 

one, plus a supplemental ‘‘clean up’’ 

distribution made pursuant to section 

855 of the Code not exceeding 10% of 

the aggregate amount distributed for the 

year, plus one additional capital gain 

dividend made in whole or in part to 

avoid the excise tax under section 4982 

of the Code. 


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10848 Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 

4Returns of capital as used in the application 

means return of capital for financial accounting 

purposes and not for tax accounting purposes. 

2. Section 6(c) provides, in relevant 

part, that the Commission may exempt 

any person or transaction from any 

provision of the Act to the extent that 

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. 

3. Applicants state that one of the 

concerns leading to the enactment of 

section 19(b) and adoption of rule 19b– 

1 was that shareholders might be unable 

to distinguish between frequent 

distributions of capital gains and 

dividends from investment income. 

Applicants state, however, that rule 

19a–1 effectively addresses this concern 

by requiring that a separate statement 

showing the sources of a distribution 

(e.g., estimated net income, net shortterm capital gains, net long-term capital 

gains and/or return of capital) 

accompany any distributions (or the 

confirmation of the reinvestment of 

distributions) estimated to be sourced in 

part from capital gains or capital. 

Applicants state that the same 

information is included in each Fund’s 

annual report to stockholders. Further, 

IRS Form 1099–DIV is sent to each 

common and preferred stockholder who 

received distributions during a 

particular year (including shareholders 

who have sold shares during the year). 

4. Applicants further state that each 

Fund will make the additional 

disclosures required by the conditions 

set forth below, and each of them will 

have adopted compliance policies and 

procedures in accordance with rule 

38a–1 under the Act to ensure that all 

required notices and disclosures are 

sent to shareholders. Applicants argue 

that rule 19a–l, the Plans, the Funds’ 

compliance policies and the conditions 

listed below ensure that each Fund’s 

shareholders would be provided 

sufficient information to understand 

that their periodic distributions are not 

tied to the Fund’s net investment 

income (which for this purpose is the 

Fund’s taxable income other than from 

capital gains) and realized capital gains 

to date, and may not represent yield or 

investment return. Applicants also state 

that compliance with the Funds’ 

compliance procedures and condition C 

below will ensure that prospective 

shareholders and third parties are 

provided with the same information. 

Accordingly, applicants assert that 

continuing to subject the Funds to 

section 19(b) and rule 19b–1 would 

afford stockholders no additional 

protection. 

5. Applicants note that section 19(b) 

and rule 19b–1 also were intended to 

prevent improper fund share sales 

practices, including, in particular, the 

practice of urging an investor to 

purchase shares of a fund on the basis 

of an upcoming capital gains dividend 

(‘‘selling the dividend’’), where the 

dividend would result in an immediate 

corresponding reduction in NAV and 

would be in effect a taxable return of the 

investor’s capital. Applicants assert that 

the ‘‘selling the dividend’’ concern 

should not apply to closed-end 

investment companies, such as the 

Funds, which do not continuously 

distribute shares. According to 

applicants, if the underlying concern 

extends to secondary market purchases 

of shares of closed-end funds that are 

subject to a large upcoming capital gains 

dividend, adoption of a periodic 

distribution plan actually helps 

minimize the concern by avoiding, 

through periodic distributions, any 

buildup of large end-of-the-year 

distributions. 

6. Applicants also note that common 

stock of a closed-end fund often trades 

in the marketplace at a discount to its 

NAV. Applicants believe that this 

discount may be reduced if the Fund is 

permitted to pay more frequent 

dividends with respect to its common 

stock at a consistent rate. 

7. Applicants assert that the 

application of rule 19b–1 to the Plans 

actually could have inappropriate 

influence on portfolio management 

decisions. Applicants state that, in the 

absence of an exemption from rule 19b– 

1, the adoption of a periodic 

distribution plan imposes pressure on 

management (i) not to realize any net 

long-term capital gains until the point in 

the year that the fund can pay all of its 

remaining distributions in accordance 

with rule 19b–1 and (ii) not to realize 

any long-term capital gains during any 

particular year in excess of the amount 

of the aggregate pay-out for the year 

(since as a practical matter excess gains 

must be distributed and accordingly 

would not be available to satisfy pay-out 

requirements in following years), 

notwithstanding that purely investment 

considerations might favor realization of 

long-term gains at different times or in 

different amounts. Applicants thus 

assert that the limitation on the number 

of capital gain dividends that a Fund 

may make with respect to any one year 

may prevent the normal and efficient 

operation of a periodic distribution plan 

whenever that Fund’s realized net longterm capital gains in any year exceed 

the total of the periodic distributions 

that may include such capital gains 

under the rule. 

8. Applicants also assert that rule 

19b–1 may force the fixed regular 

periodic distributions to be funded with 

returns of capital 4 (to the extent net 

investment income and realized shortterm capital gains are insufficient to 

fund the distribution), even though 

realized net long-term capital gains 

otherwise would be available. To 

distribute all of a Fund’s long-term 

capital gains within the limits in rule 

19b–1, a Fund may be required to make 

total distributions in excess of the 

annual amount called for by its periodic 

distribution plan or to retain and pay 

taxes on the excess amount. Applicants 

thus assert that the requested order 

would minimize these anomalous 

effects of rule 19b–1 by enabling the 

Funds to realize long-term capital gains 

as often as investment considerations 

dictate without fear of violating rule 

19b–1. 

9. Applicants state that Revenue 

Ruling 89–81 under the Code requires 

that a fund that has both common shares 

and preferred shares outstanding 

designate the types of income, e.g., 

investment income and capital gains, in 

the same proportion as the total 

distributions distributed to each class 

for the tax year. To satisfy the 

proportionate designation requirements 

of Revenue Ruling 89–81, whenever a 

fund has realized a long-term capital 

gain with respect to a given tax year, the 

fund must designate the required 

proportionate share of such capital gain 

to be included in common and preferred 

stock dividends. Applicants state that 

although rule 19b–1 allows a fund some 

flexibility with respect to the frequency 

of capital gains distributions, a fund 

might use all of the exceptions available 

under the rule for a tax year and still 

need to distribute additional capital 

gains allocated to the preferred stock to 

comply with Revenue Ruling 89–81. 

10. Applicants assert that the 

potential abuses addressed by section 

19(b) and rule 19b–1 do not arise with 

respect to preferred shares issued by a 

closed-end fund. Applicants assert that 

such distributions are either fixed or are 

determined in periodic auctions by 

reference to short-term interest rates 

rather than by reference to performance 

of the issuer, and Revenue Ruling 89– 

81 determines the proportion of such 

distributions that are comprised of the 

long-term capital gains. 

11. Applicants also submit that the 

‘‘selling the dividend’’ concern is not 

applicable to preferred stock, which 

entitles a holder to no more than a 

periodic dividend at a fixed rate or the 

rate determined by the market, and, like 


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Federal Register / Vol. 75, No. 45 / Tuesday, March 9, 2010 / Notices 10849 

5 In order to rely on the order, a future Fund must 

satisfy each of the foregoing representations except 

that such representations will be made in respect 

of actions by the Board of such future Fund and 

will be made at a future time. 

6The disclosure in this condition B.1.(b)(2) will 

be included only if the current distribution or the 

fiscal year-to-date cumulative distributions are 

estimated to include a return of capital. 

a debt security, is priced based upon its 

liquidation value, dividend rate, credit 

quality, and frequency of payment. 

Applicants state that investors buy 

preferred stock for the purpose of 

receiving payments at the frequency 

bargained for. 

12. Applicants request an order 

pursuant to section 6(c) of the Act 

granting an exemption from section 

19(b) of the Act and rule 19b–1 

thereunder to permit each Fund to make 

periodic capital gain dividends (as 

defined in section 852(b)(3)(C) of the 

Code) as often as monthly in any one 

taxable year in respect of its common 

stock and as often as specified by or 

determined in accordance with the 

terms thereof in respect of the Fund’s 

preferred stock (if any).5

Applicants’ Conditions 

Applicants agree that any order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

A. Compliance Review and Reporting 

Each Fund’s chief compliance officer 

will: 

1. Report to the Fund’s Board, no less 

frequently than once every three months 

or at the next regularly scheduled 

quarterly Board meeting, whether: 

(a) The Fund and its Adviser have 

complied with the conditions of the 

order and 

(b) A material compliance matter (as 

defined in Rule 38a–1(e)(2) under the 

Act) has occurred with respect to such 

conditions; and 

2. Review the adequacy of the policies 

and procedures adopted by the Board no 

less frequently than annually. 

B. Disclosures To Fund Stockholders 

1. Each 19(a) Notice disseminated to 

the holders of the Fund’s common 

stock, in addition to the information 

required by Section 19(a) and Rule 19a– 

1: 

(a) Will provide, in a tabular or 

graphical format: 

(1) The amount of the distribution, on 

a per common share basis, together with 

the amounts of such distribution 

amount, on a per common share basis 

and as a percentage of such distribution 

amount, from estimated: (A) Net 

investment income; (B) net realized 

short-term capital gains; (C) net realized 

long-term capital gains; and (D) return 

of capital or other capital source; 

(2) The fiscal year-to-date cumulative 

amount of distributions, on a per 

common share basis, together with the 

amounts of such cumulative amount, on 

a per common share basis and as a 

percentage of such cumulative amount 

of distributions, from estimated: (A) Net 

investment income; (B) net realized 

short-term capital gains; (C) net realized 

long-term capital gains; and (D) return 

of capital or other capital source; 

(3) The average annual total return in 

relation to the change in NAV for the 5- 

year period (or, if the Fund’s history of 

operations is less than five years, the 

time period commencing immediately 

following the Fund’s first public 

offering) ending on the last day of the 

month ended immediately prior to the 

most recent distribution record date 

compared to the current fiscal period’s 

annualized distribution rate expressed 

as a percentage of NAV as of the last day 

of the month prior to the most recent 

distribution record date; and 

(4) The cumulative total return in 

relation to the change in NAV from the 

last completed fiscal year to the last day 

of the month prior to the most recent 

distribution record date compared to the 

fiscal year-to-date-cumulative 

distribution rate expressed as a 

percentage of NAV as of the last day of 

the month prior to the most recent 

distribution record date; 

Such disclosure shall be made in a 

type size at least as large and as 

prominent as the estimate of the sources 

of the current distribution; and 

(b) Will include the following 

disclosure: 

(1) ‘‘You should not draw any 

conclusions about the Fund’s 

investment performance from the 

amount of this distribution or from the 

terms of the Fund’s Plan’’; 

(2) ‘‘The Fund estimates that it has 

distributed more than its income and 

capital gains; therefore, a portion of 

your distribution may be a return of 

capital. A return of capital may occur, 

for example, when some or all of the 

money that you invested in the Fund is 

paid back to you. A return of capital 

distribution does not necessarily reflect 

the Fund’s investment performance and 

should not be confused with ‘yield’ or 

‘income’ ’’; 6 and 

(3) ‘‘The amounts and sources of 

distributions reported in this 19(a) 

Notice are only estimates and are not 

being provided for tax reporting 

purposes. The actual amounts and 

sources of the amounts for tax reporting 

purposes will depend upon the Fund’s 

investment experience during the 

remainder of its fiscal year and may be 

subject to changes based on tax 

regulations. The Fund will send you a 

Form 1099–DIV for the calendar year 

that will tell you how to report these 

distributions for Federal income tax 

purposes.’’ 

Such disclosure shall be made in a 

type size at least as large as and as 

prominent as any other information in 

the 19(a) Notice and placed on the same 

page in close proximity to the amount 

and the sources of the distribution; 

2. On the inside front cover of each 

report to stockholders under Rule 30e– 

1 under the Act, the Fund will: 

(a) Describe the terms of the Plan 

(including the fixed amount or fixed 

percentage of the distributions and the 

frequency of the distributions); 

(b) Include the disclosure required by 

condition B.1.(b)(1) above; 

(c) State, if applicable, that the Plan 

provides that the Board may amend or 

terminate the Plan at any time without 

prior notice to Fund stockholders; and 

(d) Describe any reasonably 

foreseeable circumstances that might 

cause the Fund to terminate the Plan 

and any reasonably foreseeable 

consequences of such termination; and 

3. Each report provided to 

stockholders under Rule 30e–1 under 

the Act and each prospectus filed with 

the Commission on Form N–2 under the 

Act, will provide the Fund’s total return 

in relation to changes in NAV in the 

financial highlights table and in any 

discussion about the Fund’s total return. 

C. Disclosure to Stockholders, 

Prospective Stockholders and Third 

Parties 

1. Each Fund will include the 

information contained in the relevant 

19(a) Notice, including the disclosure 

required by condition B.1.(b) above, in 

any written communication (other than 

a communication on Form 1099) about 

the Plan or distributions under the Plan 

by the Fund, or agents that the Fund has 

authorized to make such 

communication on the Fund’s behalf, to 

any Fund common stockholder, 

prospective common stockholder or 

third-party information provider; 

2. The Fund will issue, 

contemporaneously with the issuance of 

any 19(a) Notice, a press release 

containing the information in the 19(a) 

Notice and file with the Commission the 

information contained in such 19(a) 

Notice, including the disclosure 

required by condition B.1.(b) above, as 

an exhibit to its next filed Form N–CSR; 

and 


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7 If a Fund has been in operation fewer than six 

months, the measured period will begin 

immediately following the Fund’s first public 

offering. 

8 If a Fund has been in operation fewer than five 

years, the measured period will begin immediately 

following the Fund’s first public offering. 

3. The Fund will post prominently a 

statement on its (or its Adviser’s) Web 

site containing the information in each 

19(a) Notice, including the disclosure 

required by condition B.1.(b) above, and 

maintain such information on such Web 

site for at least 24 months. 

D. Delivery of 19(a) Notices to Beneficial 

Owners 

If a broker, dealer, bank or other 

person (‘‘Financial Intermediary’’) holds 

common stock issued by a Fund in 

nominee name, or otherwise, on behalf 

of a beneficial owner, the Fund: 

1. Will request that the Financial 

Intermediary, or its agent, forward the 

19(a) Notice to all beneficial owners of 

the Fund’s shares held through such 

Financial Intermediary; 

2. Will provide, in a timely manner, 

to the Financial Intermediary, or its 

agent, enough copies of the 19(a) Notice 

assembled in the form and at the place 

that the Financial Intermediary, or its 

agent, reasonably requests to facilitate 

the Financial Intermediary’s sending of 

the 19(a) Notice to each beneficial 

owner of the Fund’s shares; and 

3. Upon the request of any Financial 

Intermediary, or its agent, that receives 

copies of the 19(a) Notice, will pay the 

Financial Intermediary, or its agent, the 

reasonable expenses of sending the 19(a) 

Notice to such beneficial owners. 

E. Additional Board Determinations for 

Funds Whose Common Stock Trades at 

a Premium 

If: 

1. A Fund’s common stock has traded 

on the stock exchange on which it 

primarily trades at the time in question 

at an average premium to NAV equal to 

or greater than 10%, as determined on 

the basis of the average of the discount 

or premium to NAV of the Fund’s 

common stock as of the close of each 

trading day over a 12-week rolling 

period (each such 12-week rolling 

period ending on the last trading day of 

each week); and 

2. The Fund’s annualized distribution 

rate for such 12-week rolling period, 

expressed as a percentage of NAV as of 

the ending date of such 12-week rolling 

period, is greater than the Fund’s 

average annual total return in relation to 

the change in NAV over the 2-year 

period ending on the last day of such 

12-week rolling period; then: 

(a) At the earlier of the next regularly 

scheduled meeting or within four 

months of the last day of such 12-week 

rolling period, the Board including a 

majority of the Independent Directors: 

(1) Will request and evaluate, and the 

Fund’s Adviser will furnish, such 

information as may be reasonably 

necessary to make an informed 

determination of whether the Plan 

should be continued or continued after 

amendment; 

(2) Will determine whether 

continuation, or continuation after 

amendment, of the Plan is consistent 

with the Fund’s investment objective(s) 

and policies and is in the best interests 

of the Fund and its stockholders, after 

considering the information in 

condition E.2.(a)(1) above; including, 

without limitation: (A) Whether the 

Plan is accomplishing its purpose(s); (B) 

the reasonably foreseeable material 

effects of the Plan on the Fund’s longterm total return in relation to the 

market price and NAV of the Fund’s 

common stock; and (C) the Fund’s 

current distribution rate, as described in 

condition E.2 above, compared with the 

Fund’s average annual taxable income 

or total return over the 2-year period, as 

described in condition E.2, or such 

longer period as the Board deems 

appropriate; and 

(3) Based upon that determination, 

will approve or disapprove the 

continuation, or continuation after 

amendment, of the Plan; and 

(b) The Board will record the 

information it considers, including its 

consideration of the factors listed in 

condition E.2.(a)(2) above, and the basis 

for its approval or disapproval of the 

continuation, or continuation after 

amendment, of the Plan in its meeting 

minutes, which must be made and 

preserved for a period of not less than 

six years from the date of such meeting, 

the first two years in an easily accessible 

place. 

F. Public Offerings 

A Fund will not make a public 

offering of the Fund’s common stock 

other than: 

1. A rights offering below NAV to 

holders of the Fund’s common stock; 

2. An offering in connection with a 

dividend reinvestment plan, merger, 

consolidation, acquisition, spin-off or 

reorganization of the Fund; or 

3. An offering other than an offering 

described in conditions F.1 and F.2 

above, provided that, with respect to 

such other offering: 

(a) The Fund’s annualized 

distribution rate for the six months 

ending on the last day of the month 

ended immediately prior to the most 

recent distribution record date,7

expressed as a percentage of NAV as of 

such date, is no more than 1 percentage 

point greater than the Fund’s average 

annual total return for the 5-year period 

ending on such date; 8 and 

(b) The transmittal letter 

accompanying any registration 

statement filed with the Commission in 

connection with such offering discloses 

that the Fund has received an order 

under Section 19(b) to permit it to make 

periodic distributions of long-term 

capital gains with respect to its common 

stock as frequently as twelve times each 

year, and as frequently as distributions 

are specified by or determined in 

accordance with the terms of any 

outstanding preferred stock as such 

Fund may issue. 

G. Amendments to Rule 19b–1 

The requested order will expire on the 

effective date of any amendments to 

Rule 19b–1 that provide relief 

permitting certain closed-end 

investment companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common stock as frequently as twelve 

times each year. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4908 Filed 3–8–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, March 11, 2010 at 2 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Casey, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in a closed session. 


sroberts on DSKD5P82C1PROD with NOTICES