Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices 46807 

1Every existing entity that currently intends to 

rely on the requested order is named as an 

applicant. Any existing or future entity that relies 

on the order in the future will do so only in 

accordance with the terms and conditions in the 

application. 

extent necessary to permit any existing 

or future series of the Trusts and any 

other registered open-end investment 

company advised by the Adviser or any 

person controlling, controlled by or 

under common control with the Adviser 

that operates as a ‘‘fund of funds’’ (the 

‘‘Applicant Funds’’) and invests in other 

Columbia funds in reliance on section 

12(d)(1)(G) of the Act, and is also 

eligible to invest in securities (as 

defined in section 2(a)(36) of the Act) in 

reliance on rule 12d1–2 under the Act, 

to also invest, to the extent consistent 

with its investment objectives, policies, 

strategies and limitations, in financial 

instruments that may not be securities 

within the meaning of section 2(a)(36) of 

the Act (‘‘Other Investments’’).1

3. Consistent with its fiduciary 

obligations under the Act, each 

Applicant Fund’s board of trustees 

(‘‘Board’’) will review the advisory fees 

charged by the Adviser to ensure that 

they are based on services provided that 

are in addition to, rather than 

duplicative of, services provided 

pursuant to the advisory agreement of 

any investment company in which the 

Applicant Fund may invest. 

Applicants’ Legal Analysis 

1. Section 12(d)(1)(A) of the Act 

provides that no registered investment 

company (‘‘acquiring company’’) may 

acquire securities of another investment 

company (‘‘acquired company’’) if such 

securities represent more than 3% of the 

acquired company’s outstanding voting 

stock or more than 5% of the acquiring 

company’s total assets, or if such 

securities, together with the securities of 

other investment companies, represent 

more than 10% of the acquiring 

company’s total assets. Section 

12(d)(1)(B) of the Act provides that no 

registered open-end investment 

company may sell its securities to 

another investment company if the sale 

will cause the acquiring company to 

own more than 3% of the acquired 

company’s voting stock, or cause more 

than 10% of the acquired company’s 

voting stock to be owned by investment 

companies. 

2. Section 12(d)(1)(G) of the Act 

provides that section 12(d)(1) will not 

apply to securities of an acquired 

company purchased by an acquiring 

company if: (i) The acquiring company 

and acquired company are part of the 

same group of investment companies; 

(ii) the acquiring company holds only 

securities of acquired companies that 

are part of the same group of investment 

companies, government securities, and 

short-term paper; (iii) the aggregate sales 

loads and distribution-related fees of the 

acquiring company and the acquired 

company are not excessive under rules 

adopted pursuant to section 22(b) or 

section 22(c) of the Act by a securities 

association registered under section 15A 

of the Securities Exchange Act of 1934 

or by the Commission; and (iv) the 

acquired company has a policy that 

prohibits it from acquiring securities of 

registered open-end management 

investment companies or registered unit 

investment trusts in reliance on section 

12(d)(1)(F) or (G) of the Act. 

3. Rule 12d1–2 under the Act permits 

a registered open-end investment 

company or a registered unit investment 

trust that relies on section 12(d)(1)(G) of 

the Act to acquire, in addition to 

securities issued by another registered 

investment company in the same group 

of investment companies, government 

securities, and short-term paper: (1) 

Securities issued by an investment 

company that is not in the same group 

of investment companies, when the 

acquisition is in reliance on section 

12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) 

securities (other than securities issued 

by an investment company); and (3) 

securities issued by a money market 

fund, when the investment is in reliance 

on rule 12d1–1 under the Act. For the 

purposes of rule 12d1–2, ‘‘securities’’ 

means any security as defined in section 

2(a)(36) of the Act. 

4. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction from any 

provision of the Act, or from any rule 

under the Act, 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 policies and 

provisions of the Act. 

5. Applicants state that the proposed 

arrangement would comply with the 

provisions of rule 12d1–2 under the Act, 

but for the fact that the Applicant Funds 

may invest a portion of their assets in 

Other Investments. Applicants request 

an order under section 6(c) of the Act 

for an exemption from rule 12d1–2(a) to 

allow the Applicant Funds to invest in 

Other Investments. Applicants assert 

that permitting the Applicant Funds to 

invest in Other Investments as described 

in the application would not raise any 

of the concerns that the requirements of 

section 12(d)(1) were designed to 

address. 

Applicants’ Condition 

Applicants agree that the order 

granting the requested relief will be 

subject to the following condition: 

Applicants will comply with all 

provisions of rule 12d1–2 under the Act, 

except for paragraph (a)(2) to the extent 

that it restricts any Applicant Fund from 

investing in Other Investments as 

described in the application. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21888 Filed 9–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28897; File No. 812–13630] 

Alpine Global Dynamic Dividend Fund, 

et al.; Notice of Application 

September 4, 2009. 

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. 

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 shares as frequently as twelve 

times each year, and as frequently as 

distributions are specified by or in 

accordance with the terms of any 

outstanding preferred shares that such 

investment companies may issue. 

APPLICANTS: Alpine Global Dynamic 

Dividend Fund (‘‘AGD’’), Alpine Total 

Dynamic Dividend Fund (‘‘AOD’’), 

Alpine Global Premier Properties Fund 

(‘‘AWP’’) and Alpine Woods Capital 

Investors, LLC (the ‘‘Investment 

Adviser’’). 

DATES: Filing Dates: The application was 

filed on February 4, 2009 and amended 

on July 31, 2009 and September 1, 2009. 

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 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
46808 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices 

1AGD, AOD and AWP are the only closed-end 

investment companies that currently intend to rely 

on the order. Applicants request that the order also 

apply to each registered closed-end investment 

company that in the future: (a) Is advised by the 

Investment Adviser (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 the Investment 

Adviser; and (b) complies with the terms and 

conditions of the application (collectively with 

AGD, AOD and AWP, ‘‘Funds’’). 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. 

by 5:30 p.m. on September 29, 2009, 

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, U.S. Securities 

and Exchange Commission, 100 F 

Street, NE., Washington, DC 20549– 

1090; Applicants, 2500 Westchester 

Avenue, Suite 215, Purchase, New York 

10577. 

FOR FURTHER INFORMATION CONTACT: Jill 

Ehrlich, Attorney Adviser, at (202) 551– 

6819, or Mary Kay Frech, 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. AGD, AOD and AWP, each a 

Delaware statutory trust, are closed-end 

management investment companies, 

registered under the Act.1 The common 

shares of AGD, AOD and AWP are listed 

on the New York Stock Exchange. 

Applicants believe that the shareholders 

of each Fund are generally conservative, 

dividend-sensitive investors who desire 

current income periodically and may 

favor a fixed distribution policy. 

Although AGD, AOD and AWP have no 

current intention to do so, each is 

authorized to issue preferred shares. 

2. The Investment Adviser is a 

Delaware limited liability company 

registered under the Investment 

Advisers Act of 1940 (‘‘Advisers Act’’). 

The Investment Adviser serves as 

investment adviser to AGD, AOD and 

AWP and is responsible for their overall 

management. Each Fund will be advised 

by an investment adviser that is 

registered under the Advisers Act. 

3. Applicants state that, prior to the 

organizational meeting of each of AGD, 

AOD and AWP, held on June 23, 2006, 

December 18, 2006 and March 12, 2007, 

respectively, the board of trustees (the 

‘‘Board’’) of each of AGD, AOD and 

AWP, including a majority of the 

members who are not ‘‘interested 

persons’’ of each Fund as defined in 

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

‘‘Independent Trustees’’), reviewed 

information regarding the purpose and 

terms of the proposed distribution 

policy, the likely effects of such policy 

on each Fund’s long-term total return 

(in relation to market price and net asset 

value (‘‘NAV’’) per share), the 

relationship between each Fund’s 

distribution rate on its common shares 

under the policy and such Fund’s total 

return (in relation to NAV per share). 

Applicants state that the Independent 

Trustees also considered what conflicts 

of interest the Investment Adviser, the 

affiliated persons of the Investment 

Adviser and each Fund might have with 

respect to the adoption or 

implementation of the proposed 

periodic distribution policy. Applicants 

further state that, after considering such 

information, the Board, including the 

Independent Trustees, of each of AGD, 

AOD and AWP approved the proposed 

periodic distribution policy with respect 

to such Fund’s common shares (the 

‘‘Plan’’) and determined that the Plan is 

consistent with such Fund’s investment 

objectives and in the best interests of 

such Fund’s common shareholders. 

Prior to implementing the Plan, the 

Board of each of AGD, AOD and AWP, 

including the Independent Trustees, 

will review the factors considered in 

connection with its approval of the 

Plan, as well as any changes in such 

factors since the date of its approval, 

and will confirm that the Plan is 

consistent with the Fund’s investment 

objectives and policies and in the best 

interests of such Fund’s common 

shareholders. 

4. Applicants state that the purpose of 

the Plan of each of AGD, AOD and AWP 

is to permit such Fund to distribute over 

the course of each year, through 

monthly distributions as nearly equal as 

practicable and any required special 

distributions, an amount closely 

approximating the total taxable income 

of such Fund during such year and, if 

so determined by its Board, all or a 

portion of the returns of capital paid by 

portfolio securities to such Fund during 

such year. Applicants represent that, in 

accordance with the Plan of each Fund, 

the Fund would distribute to its 

common shareholders a fixed monthly 

amount, but reserves the right to 

distribute an amount equal to a fixed 

percentage of the market price or of the 

NAV per share of the Fund’s common 

shares at a particular point in time, any 

of which may be adjusted from time to 

time. Applicants state that, under each 

Plan, the minimum annual distribution 

rate with respect to such Fund’s 

common shares would be independent 

of the Fund’s performance during any 

particular period, but would be 

expected to correlate with the Fund’s 

performance 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 at the meeting 

held on September 22, 2008, each Board 

adopted policies and procedures under 

rule 38a–1 that are reasonably designed 

to ensure that all notices required to be 

sent to the Fund’s shareholders 

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

19a–1 thereunder and condition 4 below 

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

disclosure required by rule 19a–1 and 

by condition 2(a) below, and that all 

other written communications by AGD, 

AOD or AWP or its agents regarding 

distributions under the Plan include the 

disclosure required by condition 3(a) 

below. Applicants state that each Board 

also adopted policies and procedures 

that require each Fund to keep records 

that demonstrate its compliance with all 

of the conditions of the order and that 

are necessary for such Fund to form the 

basis for, or demonstrate the calculation 

of, the amounts disclosed in its 19(a) 

Notices. 

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 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices 46809 

2Returns of capital as used in the application 

means return of capital for financial accounting 

purposes and not for tax accounting purposes. 

avoid the excise tax under section 4982 

of the Code. 

2. Section 6(c) provides that the 

Commission may, by order upon 

application, conditionally or 

unconditionally exempt any person, 

security, or transaction, or any class or 

classes of persons, securities or 

transactions, from any provision of the 

Act, if and to the extent that the 

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 shareholders and on its 

IRS Form 1099–DIV, which is sent to 

each common and preferred 

shareholder, if preferred shares are 

issued by one or more Funds, who 

received distributions during a 

particular year (including shareholders 

who have sold shares during the year). 

4. Applicants further state that each of 

AGD, AOD and AWP will make the 

additional disclosures required by the 

conditions set forth below, and each of 

them has 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–1, 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 3 

set forth 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 shareholders 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 monthly distributions, any 

buildup of large end-of-the-year 

distributions. 

6. Applicants also note that common 

shares of closed-end funds that invest 

primarily in equity securities often trade 

in the marketplace at a discount to their 

NAVs. Applicants believe that this 

discount may be reduced if the Funds 

are permitted to pay relatively frequent 

dividends on their common shares at a 

consistent rate, whether or not those 

dividends contain an element of capital 

gain. 

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 monthly 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 2 (to the extent net 

investment income and realized short 

term 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 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
46810 Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices 

3 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. 

4The disclosure in this condition 2(a)(ii)(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. 

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 shares, which 

entitle a holder to no more than a 

periodic dividend at a fixed rate or the 

rate determined by the market, and, like 

debt securities, are priced based upon 

their liquidation value, dividend rate, 

credit quality, and frequency of 

payment. Applicants state that investors 

buy preferred shares for the purpose of 

receiving payments at the frequency 

bargained for and do not expect the 

liquidation value of their shares to 

change. 

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 

shares and as often as specified by or 

determined in accordance with the 

terms thereof in respect of the Fund’s 

preferred shares.3

Applicants’ Conditions 

Applicants agree that any order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

1. Compliance Review and Reporting 

Each Fund’s chief compliance officer 

will (a) report to the Fund’s Board, no 

less frequently than once every three 

months or at the next regularly 

scheduled quarterly Board meeting, 

whether (i) the Fund and its Investment 

Adviser have complied with the 

conditions of the order and (ii) a 

material compliance matter (as defined 

in rule 38a–l(e)(2) under the Act) has 

occurred with respect to such 

conditions; and (b) review the adequacy 

of the policies and procedures adopted 

by the Board no less frequently than 

annually. 

2. Disclosures to Fund Shareholders 

(a) Each 19(a) Notice disseminated to 

the holders of each Fund’s common 

shares, in addition to the information 

required by section 19(a) and rule 

19a–l: 

(i) Will provide, in a tabular or 

graphical format: 

(1) The amount of the distribution, on 

a per share basis, together with the 

amounts of such distribution amount, 

on a per 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 share 

basis, together with the amounts of such 

cumulative amount, on a per 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 per share 

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 

(ii) 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 

net realized 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’ ’’ 4 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; 

(b) On the inside front cover of each 

report to shareholders under rule 30e– 

1 under the Act, the Fund will: 

(i) Describe the terms of the Plan 

(including the fixed amount or fixed 

percentage of the distributions and the 

frequency of the distributions); 

(ii) Include the disclosure required by 

condition 2(a)(ii)(1) above; 

(iii) State, if applicable, that the Plan 

provides that the Board may amend or 

terminate the Plan at any time without 

prior notice to Fund shareholders; and 

(iv) Describe any reasonably 

foreseeable circumstances that might 

cause the Fund to terminate the Plan 

and any reasonably foreseeable 

consequences of such termination. 

(c) Each report provided to 

shareholders 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. 

3. Disclosure to Common Shareholders, 

Prospective Common Shareholders and 

Third Parties 

(a) Each Fund will include the 

information contained in the relevant 

19(a) Notice, including the disclosure 

required by condition 2(a)(ii) 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 shareholder, 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 175 / Friday, September 11, 2009 / Notices 46811 

5 If the Fund has been in operation fewer than six 

months, the measured period will begin 

immediately following the Fund’s first public 

offering. 

6 If the Fund has been in operation fewer than five 

years, the measured period will begin immediately 

following the Fund’s first public offering. 

prospective common shareholder or 

third-party information provider; 

(b) Each 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 2(a)(ii) above, as 

an exhibit to its next filed Form N–CSR; 

and 

(c) Each Fund will post prominently 

a statement on its (or the Investment 

Adviser’s) Web site containing the 

information in each 19(a) Notice, 

including the disclosure required by 

condition 2(a)(ii) above, and will 

maintain such information on such Web 

site for at least 24 months. 

4. Delivery of 19(a) Notices to Beneficial 

Owners 

If a broker, dealer, bank or other 

person (‘‘financial intermediary’’) holds 

common shares issued by a Fund in 

nominee name, or otherwise, on behalf 

of a beneficial owner, the Fund: (a) 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; (b) 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 (c) 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. 

5. Additional Board Determinations for 

Funds Whose Shares Trade at a 

Premium 

If: 

(a) A Fund’s common shares have 

traded on the stock exchange that they 

primarily trade on 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 shares 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 

(b) A 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: 

(i) 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 Trustees: 

(1) Will request and evaluate, and the 

Investment 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 shareholders, after 

considering the information in 

condition 5(b)(i)(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 long-term total return in relation 

to the market price and NAV of the 

Fund’s common shares; and 

(C) The Fund’s current distribution 

rate, as described in condition 5(b) 

above, compared with the Fund’s 

average annual taxable income or total 

return over the 2-year period, as 

described in condition 5(b), 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 

(ii) The Board will record the 

information considered by it, including 

its consideration of the factors listed in 

condition 5(b)(i)(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. 

6. Public Offerings 

A Fund will not make a public 

offering of the Fund’s common shares 

other than: 

(a) A rights offering below NAV to 

holders of the Fund’s common shares; 

(b) An offering in connection with a 

dividend reinvestment plan merger, 

consolidation, acquisition, spin off or 

reorganization of the Fund; or 

(c) An offering other than an offering 

described in conditions 6(a) and 6(b) 

above, provided that, with respect to 

such other offering: 

(i) 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,5 expressed as a 

percentage of NAV per share 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; 6 and 

(ii) 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 shares as such 

Fund may issue. 

7. 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 shares 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. E9–21923 Filed 9–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28895; File No. 812–13535] 

American Capital, Ltd.; Notice of 

Application 

September 3, 2009. 

AGENCY: Securities and Exchange 

Commission (the ‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 61(a)(3)(B) of the 


cprice-sewell on DSKGBLS3C1PROD with NOTICES