Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 27035 

3See Securities Exchange Act Release No. 83122 

(April 27, 2018), 83 FR 19578. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

1As used herein, a ‘‘Future Fund’’ is any 

investment company (or investment portfolio or 

series thereof), other than an Existing Fund, 

designed to be sold to VA Accounts and/or VLI 

Accounts and to which BlackRock or its affiliates 

may in the future serve as investment adviser, subadviser, manager, administrator, principal 

underwriter or sponsor. 

Register on May 3, 2018.3 The 

Commission has received no comment 

letters on the proposed rule change. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is June 17, 2018. 

The Commission is extending this 45- 

day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,5

designates August 1, 2018 as the date by 

which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–NYSEArca–2018–25). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12433 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

33119; 812–14901] 

BlackRock Variable Series Funds, Inc., 

et al. 

June 6, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application pursuant to 

Section 6(c) of the Investment Company 

Act of 1940, as amended (the ‘‘1940 

Act’’), seeking exemptions from 

Sections 9(a), 13(a), 15(a) and 15(b) of 

the 1940 Act and Rules 6e–2(b)(15) and 

6e–3(T)(b)(15) thereunder. 

APPLICANTS: BlackRock Variable Series 

Funds, Inc., BlackRock Series Fund, 

Inc., BlackRock Variable Series Funds II, 

Inc., BlackRock Series Fund II, Inc. 

(each a ‘‘Company’’ and together, the 

‘‘Companies’’), and BlackRock Advisors, 

LLC (‘‘BlackRock’’, and collectively 

with the Companies, the ‘‘Applicants’’). 

SUMMARY OF APPLICATION: Applicants 

request an order granting exemptions 

from Sections 9(a), 13(a), 15(a), and 

15(b) of the 1940 Act and Rules 6e– 

2(b)(15) and 6e–3(T)(b)(15) thereunder, 

in cases where a life insurance separate 

account supporting variable life 

insurance contracts, whether or not 

registered as an investment company 

with the Commission (‘‘VLI Accounts’’), 

holds shares of an existing portfolio of 

a Company that is designed to be sold 

to VLI Accounts or VA Accounts (as 

defined below) for which BlackRock or 

any of its affiliates may serve as 

investment adviser, sub-adviser, 

manager, administrator, principal 

underwriter or sponsor (‘‘Existing 

Fund’’) or ‘‘Future Fund’’ 1 (any Existing 

Fund or Future Fund is referred to 

herein as a ‘‘Fund’’ and collectively, the 

‘‘Funds’’), and one or more of the 

following other types of investors also 

hold shares of the Funds: (i) Any life 

insurance company separate account 

supporting variable annuity contracts, 

whether or not registered as an 

investment company with the 

Commission (‘‘VA Accounts’’), and any 

VLI Account; (ii) trustees of qualified 

group pension or group retirement plans 

outside the separate account context 

(‘‘Qualified Plans’’); (iii) the investment 

adviser or any subadviser to a Fund or 

affiliated persons of the adviser or 

subadviser (representing seed money 

investments in a Fund) (‘‘Advisers’’); 

and (iv) any general account of an 

insurance company depositor of VA 

Accounts and/or VLI Accounts 

(‘‘General Accounts’’). 

FILING DATE: The application was filed 

on April 27, 2018. 

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 

Secretary of the Commission 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 July 2, 

2018, 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 may 

request notification of a hearing by 

writing to the Secretary of the 

Commission. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

Applicants: 55 East 52nd Street, New 

York, NY 10055. 

FOR FURTHER INFORMATION CONTACT: 

Jessica Shin, Attorney-Adviser, or 

Andrea Ottomanelli Magovern, Branch 

Chief, at (202) 551–6762 (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 for an applicant using the 

Company name box, at http://

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

(202) 551–8090. 

Applicants’ Representations 

1. BlackRock Variable Series Funds, 

Inc. was organized as a Maryland 

corporation on October 16, 1981 and is 

registered under the 1940 Act as an 

open-end management investment 

company (Reg. File No. 811–3290). The 

Company is a series investment 

company as defined by Rule 18f–2 

under the 1940 Act and is currently 

comprised of twenty portfolios, all of 

which are managed by BlackRock. The 

Company issues a separate series of 

shares of common stock for each of its 

portfolios and has filed a registration 

statement under the Securities Act of 

1933, as amended (the ‘‘Securities Act’’) 

on Form N–1A (Reg. File No. 002– 

74452) to register such shares. The 

Company may establish additional 

portfolios in the future and additional 

classes of shares for such portfolios. 

Shares of the portfolios of the Company 

are not and will not be offered to the 

general public. 

2. BlackRock Series Fund, Inc. was 

organized as a Maryland corporation on 

September 4, 1980 and is registered 

under the 1940 Act as an open-end 

management investment company (Reg. 

File No. 811–3091). The Company is a 

series investment company as defined 

by Rule 18f–2 under the 1940 Act and 

is currently comprised of thirteen 


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1Each Existing Fund of BlackRock Variable Series 

Funds, Inc. and BlackRock Series Fund, Inc. and its 

respective Participating Insurance Companies will 

begin to rely on the requested order only when all 

of such Participating Insurance Companies have 

entered into participation agreements meeting the 

requirements of the order. Until then, each such 

Existing Fund and its respective Participating 

Insurance Companies may continue to rely upon 

one of the following two existing orders: (i) Merrill 

Lynch Series Fund, Inc., Rel. No. IC–19279 (Feb. 22, 

1993) (notice), and Rel. No. IC–19346 (Mar. 23, 

1993) (order), with respect to BlackRock Series 

Fund, Inc. (f/k/a Merrill Lynch Series Fund, Inc.); 

and (ii) Merrill Lynch Life Insurance Company, Rel. 

No. IC–21312 (Aug. 17, 1995) (notice), and Rel. No. 

IC–21389 (Oct. 3, 1995) (order), with respect to 

BlackRock Variable Series Funds, Inc. (f/k/a Merrill 

Lynch Variable Series Funds, Inc.). 

portfolios, all of which are managed by 

BlackRock. The Company issues a 

separate series of shares of common 

stock for each of its portfolios and has 

filed a registration statement under the 

Securities Act on Form N–1A (Reg. File 

No. 002–69062) to register such shares. 

The Company may establish additional 

portfolios in the future and additional 

classes of shares for such portfolios. 

Shares of the portfolios of the Company 

are not and will not be offered to the 

general public. 

3. BlackRock Variable Series Funds II, 

Inc. was organized as a Maryland 

corporation on April 19, 2018 and is 

registered under the 1940 Act as an 

open-end management investment 

company (Reg. File No. 811–23346). The 

Company is a series investment 

company as defined by Rule 18f–2 

under the 1940 Act and is currently 

comprised of three newly-created 

portfolios, all of which are expected to 

be managed by BlackRock. The 

Company issues a separate series of 

shares of common stock for each of its 

portfolios and has filed a registration 

statement under the Securities Act on 

Form N–1A (Reg. File No. 333–224376) 

to register such shares. The Company 

may establish additional portfolios in 

the future and additional classes of 

shares for such portfolios. Shares of the 

portfolios of the Company are not and 

will not be offered to the general public. 

4. BlackRock Series Fund II, Inc. was 

organized as a Maryland corporation on 

April 19, 2018 and is registered under 

the 1940 Act as an open-end 

management investment company (Reg. 

File No. 811–23345). The Company is a 

series investment company as defined 

by Rule 18f–2 under the 1940 Act and 

is currently comprised of two newlycreated portfolios, all of which are 

expected to be managed by BlackRock. 

The Company issues a separate series of 

shares of common stock for each of its 

portfolios and has filed a registration 

statement under the Securities Act on 

Form N–1A (Reg. File No. 333–224375) 

to register such shares. The Company 

may establish additional portfolios in 

the future and additional classes of 

shares for such portfolios. Shares of the 

portfolios of the Company are not and 

will not be offered to the general public. 

5. BlackRock currently serves or is 

expected to serve as the investment 

adviser to all of the existing portfolios 

of the Companies. It is anticipated that 

BlackRock will serve as the Adviser to 

all of the Future Funds, subject to the 

authority of the Future Fund’s board of 

directors/trustees. BlackRock is a 

limited liability company formed under 

the laws of the state of Delaware and is 

registered as an investment adviser 

under the Investment Advisers Act of 

1940, as amended (the ‘‘Advisers Act’’). 

6. The Funds propose to, and other 

Funds may in the future propose to, 

offer and sell their shares to VLI and VA 

Accounts of affiliated and unaffiliated 

life insurance companies (‘‘Participating 

Insurance Companies’’) to serve as 

investment media to support variable 

life insurance contracts (‘‘VLI 

Contracts’’) and variable annuity 

contracts (‘‘VA Contacts’’) (VLI 

Contracts and VA Contracts together, 

‘‘Variable Contracts’’) issued through 

such accounts respectively, VLI 

Accounts and VA Accounts (VLI 

Accounts and VA Accounts together, 

‘‘Separate Accounts’’). Each Separate 

Account is or will be established as a 

segregated asset account by a 

Participating Insurance Company 

pursuant to the insurance law of the 

insurance company’s state of domicile. 

As of the date of this Application, the 

Participating Insurance Companies with 

respect to BlackRock Series Fund, Inc. 

are Transamerica Life Insurance 

Company, Transamerica Financial Life 

Insurance Company and Monarch Life 

Insurance Company, and there are over 

fifty Participating Insurance Companies 

with respect to BlackRock Variable 

Series Funds, Inc. As of the date of this 

Application, there are no Participating 

Insurance Companies with respect to 

the other two Companies, which are 

newly formed. 

7. In the future, the Funds will sell 

their shares to Separate Accounts only 

if each Participating Insurance Company 

sponsoring such a Separate Account 

enters into a participation agreement 

with the Funds.1 The participation 

agreements define or will define the 

relationship between each Fund and 

each Participating Insurance Company 

and memorialize or will memorialize, 

among other matters, the fact that, 

except where the agreement specifically 

provides otherwise, the Participating 

Insurance Company will remain 

responsible for establishing and 

maintaining any Separate Account 

covered by the agreement and for 

complying with all applicable 

requirements of state and federal law 

pertaining to such accounts and to the 

sale and distribution of Variable 

Contracts issued through such Separate 

Accounts. The role of the Funds under 

this arrangement, with regard to the 

federal securities laws, will consist of 

offering and selling shares of the Funds 

to the Separate Accounts and fulfilling 

any conditions that the Commission 

may impose in granting the requested 

order. 

8. The use of a common management 

investment company (or investment 

portfolio thereof) as an investment 

medium for both VLI Accounts and VA 

Accounts of the same Participating 

Insurance Company, or of two or more 

insurance companies that are affiliated 

persons of each other, is referred to 

herein as ‘‘mixed funding.’’ The use of 

a common management investment 

company (or investment portfolio 

thereof) as an investment medium for 

VLI Accounts and/or VA Accounts of 

two or more Participating Insurance 

Companies that are not affiliated 

persons of each other is referred to 

herein as ‘‘shared funding.’’ 

9. Applicants propose that the Funds 

may sell their shares directly to 

Qualified Plans, Advisers, and a General 

Accounts of a Participating Insurance 

Company. 

10. The use of a common management 

investment company (or investment 

portfolio thereof) as an investment 

medium for Separate Accounts, 

Qualified Plans, Advisers and General 

Accounts is referred to herein as 

‘‘extended mixed funding.’’ 

Applicants’ Legal Analysis 

1. Section 9(a)(3) of the 1940 Act 

makes it unlawful for any company to 

serve as an investment adviser or 

principal underwriter of any investment 

company, including a unit investment 

trust, if an affiliated person of that 

company is subject to disqualification 

enumerated in Section 9(a)(1) or (2) of 

the 1940 Act. Sections 13(a), 15(a), and 

15(b) of the 1940 Act have been deemed 

by the Commission to require ‘‘passthrough’’ voting with respect to an 

underlying investment company’s 

shares. 

2. Rules 6e–2(b)(15) and 6e– 

3(T)(b)(15) under the 1940 Act provide 

partial exemptions from Sections 9(a), 

13(a), 15(a), and 15(b) of the 1940 Act 

to VLI Accounts supporting certain VLI 

Contracts and to their life insurance 

company depositors under limited 

circumstances, as described in the 

application. VLI Accounts, their 


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depositors and their principal 

underwriters may not rely on the 

exemptions provided by Rule 6e– 

2(b)(15) if shares of the Fund are held 

by a VLI Account through which 

flexible premium VLI Contracts are 

issued, a VLI Account of an unaffiliated 

Participating Insurance Company, an 

unaffiliated Adviser, any VA Account, a 

Qualified Plan or a General Account. 

VLI Accounts, their depositors and their 

principal underwriters may not rely on 

the exemptions provided by Rule 6e– 

3(T)(b)(15) if Shares of a Fund are held 

by a VLI Account of an unaffiliated 

Participating Insurance Company, a VA 

Account of an unaffiliated Participating 

Insurance Company, a Qualified Plan, 

an unaffiliated investment adviser or the 

General Account of an unaffiliated 

Participating Insurance Company. 

Accordingly, Applicants request an 

order of the Commission granting 

exemptions from Sections 9(a), 13(a), 

15(a), and 15(b) of the 1940 Act and 

Rules 6e–2(b)(15) and 6e–3(T)(b)(15) 

thereunder in cases where a scheduled 

or flexible premium VLI Account holds 

shares of a Fund and one or more of the 

following types of investors also hold 

Shares of the Funds: (i) VA Accounts 

and VLI Accounts (supporting 

scheduled premium or flexible premium 

VLI Contracts) of affiliated and 

unaffiliated Participating Insurance 

Companies; (ii) Qualified Plans; (iii) 

Advisers; and/or (iv) General Accounts. 

3. Applicants maintain that there is 

no policy reason for the sale of Fund 

Shares to Qualified Plans, Advisers or 

General Accounts to prohibit or 

otherwise limit a Participating 

Insurance Company from relying on the 

relief provided by Rules 6e–2(b)(15) and 

6e–3(T)(b)(15). Nonetheless, Rule 6e–2 

and Rule 6e–3(T) each specifically 

provides that the relief granted 

thereunder is available only where 

shares of the underlying fund are 

offered exclusively to insurance 

company separate accounts. In this 

regard, Applicants request exemptive 

relief to the extent necessary to permit 

shares of the Funds to be sold to 

Qualified Plans, Advisers and General 

Accounts while allowing Participating 

Insurance Companies and their Separate 

Accounts to enjoy the benefits of the 

relief granted under Rule 6e–2(b)(15) 

and Rule 6e- 3(T)(b)(15). Applicants 

note that if the Funds were to sell their 

shares only to Qualified Plans, 

exemptive relief under Rule 6e–2 and 

Rule 6e–3(T) would not be necessary. 

The relief provided for under Rule 6e– 

2(b)(15) and Rule 6e–3(T)(b)(15) does 

not relate to Qualified Plans, Advisers 

or General Accounts or to a registered 

investment company’s ability to sell its 

shares to such purchasers. 

4. Applicants are not aware of any 

reason for excluding separate accounts 

and investment companies engaged in 

shared funding from the exemptive 

relief provided under Rules 6e–2(b)(15) 

and 6e–3(T)(b)(15), or for excluding 

separate accounts and investment 

companies engaged in mixed funding 

from the exemptive relief provided 

under Rule 6e–2(b)(15). Similarly, 

Applicants are not aware of any reason 

for excluding Participating Insurance 

Companies from the exemptive relief 

requested because the Funds may also 

sell their shares to Qualified Plans, 

Advisers and General Accounts. Rather, 

Applicants submit that the proposed 

sale of shares of the Funds to these 

purchasers may allow for the 

development of larger pools of assets 

resulting in the potential for greater 

investment and diversification 

opportunities, and for decreased 

expenses at higher asset levels resulting 

in greater cost efficiencies. 

5. For the reasons explained below, 

Applicants have concluded that 

investment by Qualified Plans, Advisers 

and General Accounts in the Funds 

should not increase the risk of material 

irreconcilable conflicts between owners 

of VLI Contracts and other types of 

investors or between owners of VLI 

Contracts issued by unaffiliated 

Participating Insurance Companies. 

6. Consistent with the Commission’s 

authority under Section 6(c) of the 1940 

Act to grant exemptive orders to a class 

or classes of persons and transactions, 

Applicants request exemptions for a 

class consisting of Participating 

Insurance Companies and their separate 

accounts investing in Existing and 

Future Funds of the Company, as well 

as their principal underwriters. 

7. Section 6(c) of the 1940 Act 

provides, in part, that the Commission, 

by order upon application, may 

conditionally or unconditionally 

exempt any person, security or 

transaction, or any class or classes of 

persons, securities or transactions, from 

any provision or provisions of the 1940 

Act, or any rule or regulation 

thereunder, if and 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 1940 Act. Applicants submit that the 

exemptions requested are appropriate in 

the public interest and consistent with 

the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the 1940 Act. 

8. Section 9(a)(3) of the 1940 Act 

provides, among other things, that it is 

unlawful for any company to serve as 

investment adviser or principal 

underwriter of any registered open- end 

investment company if an affiliated 

person of that company is subject to a 

disqualification enumerated in Sections 

9(a)(1) or (2). Rules 6e–2(b)(15)(i) and 

(ii) and Rules 6e–3(T)(b)(15)(i) and (ii) 

under the 1940 Act provide exemptions 

from Section 9(a) under certain 

circumstances, subject to the limitations 

discussed above on mixed funding, 

extended mixed funding and shared 

funding. These exemptions limit the 

application of the eligibility restrictions 

to affiliated individuals or companies 

that directly participate in management 

or administration of the underlying 

investment company. 

9. Rules 6e–2(b)(15)(iii) and 6e– 

3(T)(b)(15)(iii) under the 1940 Act 

provide exemptions from pass-through 

voting requirements with respect to 

several significant matters, assuming the 

limitations on mixed funding, extended 

mixed funding and shared funding are 

observed. Rules 6e–2(b)(15)(iii)(A) and 

6e–3(T)(b)(15)(iii)(A) provide that the 

insurance company may disregard the 

voting instructions of its variable life 

insurance contract owners with respect 

to the investments of an underlying 

investment company, or any contract 

between such an investment company 

and its investment adviser, when 

required to do so by an insurance 

regulatory authority (subject to the 

provisions of paragraphs (b)(5)(i) and 

(b)(7)(ii)(A) of Rules 6e–2 and 6e-3(T)). 

Rules 6e–2(b)(15)(iii)(B) and 6e– 

3(T)(b)(15)(iii)(A)(2) provide that an 

insurance company may disregard the 

voting instructions of owners of its 

variable life insurance contracts if such 

owners initiate any change in an 

underlying investment company’s 

investment policies, principal 

underwriter or any investment adviser 

(provided that disregarding such voting 

instructions is reasonable and subject to 

the other provisions of paragraphs 

(b)(5)(ii), (b)(7)(ii)(B) and (b)(7)(ii)(C) of 

Rules 6e–2 and 6e–3(T)). 

10. Applicants represent that the sale 

of Fund shares to Qualified Plans, 

Advisers or General Accounts will not 

have any impact on the exemptions 

requested herein regarding the disregard 

of pass-through voting rights. Shares 

sold to Qualified Plans will be held by 

such Qualified Plans. The exercise of 

voting rights by Qualified Plans, 

whether by trustees, participants, 

beneficiaries, or investment managers 

engaged by the Qualified Plans, does not 

raise the type of issues respecting 

disregard of voting rights that are raised 


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by VLI Accounts. With respect to 

Qualified Plans, which are not 

registered as investment companies 

under the 1940 Act, there is no 

requirement to pass through voting 

rights to Qualified Plan participants. 

Indeed, to the contrary, applicable law 

expressly reserves voting rights 

associated with Qualified Plan assets to 

certain specified persons. 

11. Similarly, Advisers and General 

Accounts are not subject to any passthrough voting rights. Accordingly, 

unlike the circumstances surrounding 

Separate Account investments in shares 

of the Funds, the issue of the resolution 

of any material irreconcilable conflicts 

with respect to voting is not present 

with respect to Advisers or General 

Accounts of Participating Insurance 

Companies. 

12. Applicants recognize that the 

prohibitions on mixed and shared 

funding might reflect concern regarding 

possible different investment 

motivations among investors. When 

Rule 6e–2 was first adopted, variable 

annuity separate accounts could invest 

in mutual funds whose shares were also 

offered to the general public. However, 

now, under the Internal Revenue Code 

of 1986 (the ‘‘Code’’), any underlying 

fund, including the Funds, that sells 

shares to a VLI Account or a VA 

Account, would, in effect, be precluded 

from also selling its shares to the public. 

Consequently, the Funds may not sell 

their shares to the public. 

13. Applicants assert that the rights of 

an insurance company on its own 

initiative or on instructions from a state 

insurance regulator to disregard the 

voting instructions of owners of 

Variable Contracts is not inconsistent 

with either mixed funding or shared 

funding. Applicants state that The 

National Association of Insurance 

Commissioners Variable Life Insurance 

Model Regulation suggests that it is 

unlikely that insurance regulators 

would find an underlying fund’s 

investment policy, investment adviser 

or principal underwriter objectionable 

for one type of Variable Contract but not 

another type. 

14. Applicants assert that shared 

funding by unaffiliated insurance 

companies does not present any issues 

that do not already exist where a single 

insurance company is licensed to do 

business in several or all states. A 

particular state insurance regulator 

could require action that 

is inconsistent with the requirements 

of other states in which the insurance 

company offers its contracts. However, 

the fact that different insurers may be 

domiciled in different states does not 

create a significantly different or 

enlarged problem. Shared funding by 

unaffiliated insurers, in this respect, is 

no different than the use of the same 

investment company as the funding 

vehicle for affiliated insurers, which 

Rules 6e–2(b)(15) and 6e–3(T)(b)(15) 

permit. Affiliated insurers may be 

domiciled in different states and be 

subject to differing state law 

requirements. 

Affiliation does not reduce the 

potential, if any exists, for differences in 

state regulatory requirements. 

Applicants state that in any event, the 

conditions set forth below are designed 

to safeguard against, and provide 

procedures for resolving, any adverse 

effects that differences among state 

regulatory requirements may produce. If 

a particular state insurance regulator’s 

decision conflicts with the majority of 

other state regulators, then the affected 

Participating Insurance Company will 

be required to withdraw its separate 

account investments in the relevant 

Fund. This requirement will be 

provided for in the participation 

agreement that will be entered into by 

Participating Insurance Companies with 

the relevant Fund. 

15. Rules 6e–2(b)(15) and 6e– 

3(T)(b)(15) give Participating Insurance 

Companies the right to disregard the 

voting instructions of VLI Contract 

owners in certain circumstances. This 

right derives from the authority of state 

insurance regulators over Separate 

Accounts. Under Rules 6e–2(b)(15) and 

6e–3(T)(b)(15), a Participating Insurance 

Company may disregard VLI Contract 

owner voting instructions only with 

respect to certain specified items. 

Affiliation does not eliminate the 

potential, if any exists, for divergent 

judgments as to the advisability or 

legality of a change in investment 

policies, principal underwriter or 

investment adviser initiated by such 

Contract owners. The potential for 

disagreement is limited by the 

requirements in Rules 6e–2 and 6e–3(T) 

that the Participating Insurance 

Company’s disregard of voting 

instructions be reasonable and based on 

specific good faith determinations. 

16. A particular Participating 

Insurance Company’s disregard of 

voting instructions, nevertheless, could 

conflict with the voting instructions of 

a majority of VLI Contract owners. The 

Participating Insurance Company’s 

action possibly could be different than 

the determination of all or some of the 

other Participating Insurance 

Companies (including affiliated 

insurers) that the voting instructions of 

VLI Contract owners should prevail, and 

either could preclude a majority vote 

approving the change or could represent 

a minority view. If the Participating 

Insurance Company’s judgment 

represents a minority position or would 

preclude a majority vote, then the 

Participating Insurance Company may 

be required, at the relevant Fund’s 

election, to withdraw its Separate 

Accounts’ investments in the relevant 

Fund. No charge or penalty will be 

imposed as a result of such withdrawal. 

This requirement will be provided for in 

the participation agreement entered into 

by the Participating Insurance 

Companies with the relevant Fund. 

17. Applicants assert there is no 

reason why the investment policies of a 

Fund would or should be materially 

different from what these policies 

would or should be if the Fund 

supported only VA Accounts or VLI 

Accounts supporting flexible premium 

or scheduled premium VLI Contracts. 

Each type of insurance contract is 

designed as a long-term investment 

program. 

18. Each Fund will be managed to 

attempt to achieve its specified 

investment objective, and not favor or 

disfavor any particular Participating 

Insurance Company or type of insurance 

contract. Applicants assert there is no 

reason to believe that different features 

of various types of Variable Contracts 

will lead to different investment 

policies for each or for different 

Separate Accounts. The sale of Variable 

Contracts and ultimate success of all 

Separate Accounts depends, at least in 

part, on satisfactory investment 

performance, which provides an 

incentive for each Participating 

Insurance Company to seek optimal 

investment performance. 

19. Furthermore, no single investment 

strategy can be identified as appropriate 

to a particular Variable Contract. Each 

‘‘pool’’ of VLI Contract and VA Contract 

owners is composed of individuals of 

diverse financial status, age, insurance 

needs and investment goals. A Fund 

supporting even one type of Variable 

Contract must accommodate these 

diverse factors in order to attract and 

retain purchasers. Permitting mixed and 

shared funding will provide economic 

support for the continuation of the 

Funds. Applicants state further that 

mixed and shared funding will broaden 

the base of potential Variable Contract 

owner investors, which may facilitate 

the establishment of additional Funds 

serving diverse goals. 

20. Applicants do not believe that the 

sale of the shares to Qualified Plans, 

Advisers or General Accounts will 

increase the potential for material 

irreconcilable conflicts of interest 

between or among different types of 

investors. In particular, Applicants see 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 27039 

very little potential for such conflicts 

beyond those that would otherwise exist 

between owners of VLI Contracts and 

VA Contracts. Applicants submit that 

either there are no conflicts of interest 

or that there exists the ability by the 

affected parties to resolve such conflicts 

consistent with the best interests of VLI 

Contract owners, VA Contract owners 

and Qualified Plan participants. 

21. Applicants state they considered 

whether there are any issues raised 

under the Code, Treasury Regulations, 

or Revenue Rulings thereunder, if 

Qualified Plans, Separate Accounts, 

Advisers and General Accounts all 

invest in the same Fund. Applicants 

have concluded that neither the Code, 

nor the Treasury Regulations nor 

Revenue Rulings thereunder present any 

inherent conflicts of interest if Qualified 

Plans, Advisers, General Accounts, and 

Separate Accounts all invest in the same 

Fund. 

22. Applicants note that, while there 

are differences in the manner in which 

distributions from separate accounts 

and Qualified Plans are taxed, these 

differences have no impact on the 

Funds. When distributions are to be 

made, and a separate account or 

Qualified Plan is unable to net purchase 

payments to make distributions, the 

separate account or Qualified Plan will 

redeem shares of the relevant Fund at its 

net asset values in conformity with Rule 

22c–1 under the 1940 Act (without the 

imposition of any sales charge) to 

provide proceeds to meet distribution 

needs. A Participating Insurance 

Company will then make distributions 

in accordance with the terms of its 

Variable Contracts, and a Qualified Plan 

will then make distributions in 

accordance with the terms of the 

Qualified Plan. 

23. Applicants state that they 

considered whether it is possible to 

provide an equitable means of giving 

voting rights to Variable Contract 

owners, Qualified Plans, Advisers and 

General Accounts. In connection with 

any meeting of Fund shareholders, the 

Fund or its transfer agent will inform 

each Participating Insurance Company 

(with respect to its Separate Accounts 

and General Account), Adviser, and 

Qualified Plan of its share holdings and 

provide other information necessary for 

such shareholders to participate in the 

meeting (e.g., proxy materials). Each 

Participating Insurance Company then 

will solicit voting instructions from 

owners of VLI Contracts and VA 

Contracts in accordance with Rules 6e– 

2 or 6e–3(T), or Section 

12(d)(1)(E)(iii)(aa) of the 1940 Act, as 

applicable, and its participation 

agreement with the relevant Fund. 

Shares of a Fund that are held by an 

Adviser or a General Account will 

generally be in the same proportion as 

all votes cast on behalf of all Variable 

Contract owners having voting rights. 

However, an Adviser or General 

Account will vote its shares in such 

other manner as may be required by the 

Commission or its staff. Shares held by 

Qualified Plans will be voted in 

accordance with applicable law. The 

voting rights provided to Qualified 

Plans with respect to the shares would 

be no different from the voting rights 

that are provided to Qualified Plans 

with respect to shares of mutual funds 

sold to the general public. Furthermore, 

if a material irreconcilable conflict 

arises because of a Qualified Plan’s 

decision to disregard Qualified Plan 

participant voting instructions, if 

applicable, and that decision represents 

a minority position or would preclude 

a majority vote, the Qualified Plan may 

be required, at the election of the 

relevant Fund, to withdraw its 

investment in the Fund, and no charge 

or penalty will be imposed as a result 

of such withdrawal. 

24. Applicants do not believe that the 

ability of a Fund to sell its shares to a 

Qualified Plan, Adviser or General 

Account gives rise to a ‘‘senior security’’ 

as defined by Section 18(g) of the 1940 

Act. Regardless of the rights and 

benefits of participants under Qualified 

Plans or owners of Variable Contracts; 

Separate Accounts, Qualified Plans, 

Advisers and General Accounts only 

have, or will only have, rights with 

respect to their respective shares of a 

Fund. These parties can only redeem 

such shares at net asset value. No 

shareholder of a Fund has any 

preference over any other shareholder 

with respect to distribution of assets or 

payment of dividends. 

25. Applicants do not believe that the 

veto power of state insurance 

commissioners over certain potential 

changes to Fund investment objectives 

approved by Variable Contract owners 

creates conflicts between the interests of 

such owners and the interests of 

Qualified Plan participants, Advisers or 

General Accounts. Applicants note that 

a basic premise of corporate democracy 

and shareholder voting is that not all 

shareholders may agree with a 

particular proposal. Their interests and 

opinions may differ, but this does not 

mean that inherent conflicts of interest 

exist between or among such 

shareholders or that occasional conflicts 

of interest that do occur between or 

among them are likely to be 

irreconcilable. 

26. Although Participating Insurance 

Companies may have to overcome 

regulatory impediments in redeeming 

shares of a Fund held by their Separate 

Accounts, Applicants state that the 

Qualified Plans and participants in 

participant-directed Qualified Plans can 

make decisions quickly and redeem 

their shares in a Fund and reinvest in 

another investment company or other 

funding vehicle without impediments, 

or as is the case with most Qualified 

Plans, hold cash pending suitable 

investment. As a result, conflicts 

between the interests of Variable 

Contract owners and the interests of 

Qualified Plans and Qualified Plan 

participants can usually be resolved 

quickly since the Qualified Plans can, 

on their own, redeem their Fund shares. 

Advisers and General accounts can 

similarly redeem their shares of a Fund 

and make alternative investments at any 

time. 

27. Finally, Applicants considered 

whether there is a potential for future 

conflicts of interest between 

Participating Insurance Companies and 

Qualified Plans created by future 

changes in the tax laws. Applicants do 

not see any greater potential for material 

irreconcilable conflicts arising between 

the interests of Variable Contract owners 

and Qualified Plan participants from 

future changes in the federal tax laws 

than that which already exists between 

VLI Contract owners and VA Contract 

owners. 

28. Applicants recognize that the 

foregoing is not an all-inclusive list, but 

rather is representative of issues that 

they believe are relevant to the 

Application. Applicants believe that the 

sale of Fund shares to Qualified Plans 

would not increase the risk of material 

irreconcilable conflicts between the 

interests of Qualified Plan participants 

and Variable Contract owners or other 

investors. Further, Applicants submit 

that the use of the Funds with respect 

to Qualified Plans is not substantially 

dissimilar from each Fund’s current and 

anticipated use, in that Qualified Plans, 

like separate accounts, are generally 

long-term investors. 

29. Applicants assert that permitting a 

Fund to sell its shares to an Adviser or 

to the General Account of a 

Participating Insurance Company will 

enhance management of each Fund 

without raising significant concerns 

regarding material irreconcilable 

conflicts among different types of 

investors. 

30. Applicants assert that various 

factors have limited the number of 

insurance companies that offer Variable 

Contracts. These factors include the 

costs of organizing and operating a 

funding vehicle, certain insurers’ lack of 

experience with respect to investment 


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27040 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

management, and the lack of name 

recognition by the public of certain 

insurance companies as investment 

experts. In particular, some smaller life 

insurance companies may not find it 

economically feasible, or within their 

investment or administrative expertise, 

to enter the Variable Contract business 

on their own. Applicants state that use 

of a Fund as a common investment 

vehicle for Variable Contracts would 

reduce or eliminate these concerns. 

Mixed and shared funding should also 

provide several benefits to owners of 

Variable Contracts by eliminating a 

significant portion of the costs of 

establishing and administering separate 

underlying funds. 

31. Applicants state that the 

Participating Insurance Companies will 

benefit not only from the investment 

and administrative expertise of the 

Funds’ Adviser, but also from the 

potential cost efficiencies and 

investment flexibility afforded by larger 

pools of funds. Therefore, making the 

Funds available for mixed and shared 

funding will encourage more insurance 

companies to offer Variable Contracts. 

This should result in increased 

competition with respect to both 

Variable Contract design and pricing, 

which can in turn be expected to result 

in more product variety. Applicants also 

assert that sale of shares in a Fund to 

Qualified Plans, in addition to Separate 

Accounts, will result in an increased 

amount of assets available for 

investment in Fund. 

32. Applicants also submit that, 

regardless of the type of shareholder in 

a Fund, an Adviser is or would be 

contractually and otherwise obligated to 

manage the Fund solely and exclusively 

in accordance with the Fund’s 

investment objectives, policies and 

restrictions, as well as any guidelines 

established by the Fund’s Board of 

Trustees (the ‘‘Board’’). 

33. Applicants assert that sales of 

Fund shares, as described above, will 

not have any adverse federal income tax 

consequences to other investors in such 

Fund. 

34. Applicants assert that granting the 

exemptions requested herein is in the 

public interest and, as discussed above, 

will not compromise the regulatory 

purposes of Sections 9(a), 13(a), 15(a), or 

15(b) of the 1940 Act or Rules 6e–2 or 

6e–3(T) thereunder. In addition, 

Applicants submit that the exemptions 

requested are consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the 1940 Act. 

Applicants’ Conditions 

Applicants agree that the Commission 

order requested herein shall be subject 

to the following conditions: 

1. A majority of the Board of each 

Fund will consist of persons who are 

not ‘‘interested persons’’ of the Fund, as 

defined by Section 2(a)(19) of the 1940 

Act, and the rules thereunder, and as 

modified by any applicable orders of the 

Commission, except that if this 

condition is not met by reason of death, 

disqualification or bona fide resignation 

of any director/trustee or directors/ 

trustees, then the operation of this 

condition will be suspended: (a) For a 

period of 90 days if the vacancy or 

vacancies may be filled by the Board; (b) 

for a period of 150 days if a vote of 

shareholders is required to fill the 

vacancy or vacancies; or (c) for such 

longer period as the Commission may 

prescribe by order upon application, or 

by future rule. 

2. The Board will monitor a Fund for 

the existence of any material 

irreconcilable conflict between and 

among the interests of the owners of all 

VLI Contracts and VA Contracts and 

participants of all Qualified Plans 

investing in the Fund, and determine 

what action, if any, should be taken in 

response to such conflicts. A material 

irreconcilable conflict may arise for a 

variety of reasons, including: (a) An 

action by any state insurance regulatory 

authority; (b) a change in applicable 

federal or state insurance, tax, or 

securities laws or regulations, or a 

public ruling, private letter ruling, noaction or interpretive letter, or any 

similar action by insurance, tax or 

securities regulatory authorities; (c) an 

administrative or judicial decision in 

any relevant proceeding; (d) the manner 

in which the investments of the Fund 

are being managed; (e) a difference in 

voting instructions given by VA 

Contract owners, VLI Contract owners, 

and Qualified Plans or Qualified Plan 

participants; (f) a decision by a 

Participating Insurance Company to 

disregard the voting instructions of 

contract owners; or (g) if applicable, a 

decision by a Qualified Plan to 

disregard the voting instructions of 

Qualified Plan participants. 

3. Participating Insurance Companies 

(on their own behalf, as well as by 

virtue of any investment of General 

Account assets in a Fund), any 

Advisers, and any Qualified Plan that 

executes a participation agreement upon 

its becoming an owner of 10% or more 

of the net assets of a Fund (collectively, 

‘‘Participants’’) will report any potential 

or existing conflicts to the Board. Each 

Participant will be responsible for 

assisting the Board in carrying out the 

Board’s responsibilities under these 

conditions by providing the Board with 

all information reasonably necessary for 

the Board to consider any issues raised. 

This responsibility includes, but is not 

limited to, an obligation by each 

Participating Insurance Company to 

inform the Board whenever Variable 

Contract owner voting instructions are 

disregarded, and, if pass-through voting 

is applicable, an obligation by each 

trustee for a Qualified Plan to inform the 

Board whenever it has determined to 

disregard Qualified Plan participant 

voting instructions. The responsibility 

to report such information and conflicts, 

and to assist the Board, will be a 

contractual obligation of all 

Participating Insurance Companies 

under their participation agreement 

with a Fund, and these responsibilities 

will be carried out with a view only to 

the interests of the Variable Contract 

owners. The responsibility to report 

such information and conflicts, and to 

assist the Board, also will be contractual 

obligations of all Qualified Plans under 

their participation agreement with a 

Fund, and such agreements will provide 

that these responsibilities will be 

carried out with a view only to the 

interests of Qualified Plan participants. 

4. If it is determined by a majority of 

the Board, or a majority of the 

disinterested directors/trustees of the 

Board, that a material irreconcilable 

conflict exists, then the relevant 

Participant will, at its expense and to 

the extent reasonably practicable (as 

determined by a majority of the 

disinterested directors/trustees), take 

whatever steps are necessary to remedy 

or eliminate the material irreconcilable 

conflict, up to and including: (a) 

Withdrawing the assets allocable to 

some or all of their VLI Accounts or VA 

Accounts from the relevant Fund and 

reinvesting such assets in a different 

investment vehicle, including another 

Fund; (b) in the case of a Participating 

Insurance Company, submitting the 

question as to whether such segregation 

should be implemented to a vote of all 

affected Variable Contract owners and, 

as appropriate, segregating the assets of 

any appropriate group (i.e., VA Contract 

owners or VLI Contact owners of one or 

more Participating Insurance 

Companies) that votes in favor of such 

segregation, or offering to the affected 

Variable Contract owners the option of 

making such a change; (c) withdrawing 

the assets allocable to some or all of the 

Qualified Plans from the affected Fund 

and reinvesting them in a different 

investment medium; and (d) 

establishing a new registered 


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Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 27041 

management investment company or 

managed separate account. If a material 

irreconcilable conflict arises because of 

a decision by a Participating Insurance 

Company to disregard Variable Contract 

owner voting instructions, and that 

decision represents a minority position 

or would preclude a majority vote, then 

the Participating Insurance Company 

may be required, at the election of the 

Fund, to withdraw such Participating 

Insurance Company’s Separate Account 

investments in a Fund, and no charge or 

penalty will be imposed as a result of 

such withdrawal. If a material 

irreconcilable conflict arises because of 

a Qualified Plan’s decision to disregard 

Qualified Plan participant voting 

instructions, if applicable, and that 

decision represents a minority position 

or would preclude a majority vote, the 

Qualified Plan may be required, at the 

election of the Fund, to withdraw its 

investment in a Fund, and no charge or 

penalty will be imposed as a result of 

such withdrawal. The responsibility to 

take remedial action in the event of a 

Board determination of a material 

irreconcilable conflict and to bear the 

cost of such remedial action will be a 

contractual obligation of all Participants 

under their participation agreement 

with a Fund, and these responsibilities 

will be carried out with a view only to 

the interests of Variable Contract owners 

or, as applicable, Qualified Plan 

participants. 

For purposes of this Condition 4, a 

majority of the disinterested directors/ 

trustees of the Board of a Fund will 

determine whether or not any proposed 

action adequately remedies any material 

irreconcilable conflict, but, in no event, 

will the Fund or its investment adviser 

be required to establish a new funding 

vehicle for any Variable Contract or 

Qualified Plan. No Participating 

Insurance Company will be required by 

this Condition 4 to establish a new 

funding vehicle for any Variable 

Contract if any offer to do so has been 

declined by vote of a majority of the 

Variable Contract owners materially and 

adversely affected by the material 

irreconcilable conflict. Further, no 

Qualified Plan will be required by this 

Condition 4 to establish a new funding 

vehicle for the Qualified Plan if: (a) A 

majority of the Qualified Plan 

participants materially and adversely 

affected by the irreconcilable material 

conflict vote to decline such offer, or (b) 

pursuant to documents governing the 

Qualified Plan, the Qualified Plan 

trustee makes such decision without a 

Qualified Plan participant vote. 

5. The determination by the Board of 

the existence of a material irreconcilable 

conflict and its implications will be 

made known in writing promptly to all 

Participants. 

6. Participating Insurance Companies 

will provide pass-through voting 

privileges to all Variable Contract 

owners whose Variable Contracts are 

issued through registered Separate 

Accounts for as long as the Commission 

continues to interpret the 1940 Act as 

requiring such pass-through voting 

privileges. However, as to Variable 

Contracts issued through Separate 

Accounts not registered as investment 

companies under the 1940 Act, passthrough voting privileges will be 

extended to owners of such Variable 

Contracts to the extent granted by the 

Participating Insurance Company. 

Accordingly, such Participating 

Insurance Companies, where applicable, 

will vote the shares of each Fund held 

in their Separate Accounts in a manner 

consistent with voting instructions 

timely received from Variable Contract 

owners. Participating Insurance 

Companies will be responsible for 

assuring that each of their Separate 

Accounts investing in a Fund calculates 

voting privileges in a manner consistent 

with all other Participating Insurance 

Companies investing in that Fund. 

The obligation to calculate voting 

privileges as provided in the 

Application shall be a contractual 

obligation of all Participating Insurance 

Companies under their participation 

agreement with the Fund. Each 

Participating Insurance Company will 

vote shares of each Fund held in its 

Separate Accounts for which no timely 

voting instructions are received, as well 

as shares held in its General Account or 

otherwise attributed to it, in the same 

proportion as those shares for which 

voting instructions are received. Each 

Qualified Plan will vote as required by 

applicable law, governing Qualified 

Plan documents and as provided in the 

Application. 

7. As long as the Commission 

continues to interpret the 1940 Act as 

requiring that pass-through voting 

privileges be provided to Variable 

Contract owners, a Fund Adviser or any 

General Account will vote its respective 

shares of a Fund in the same proportion 

as all votes cast on behalf of all Variable 

Contract owners having voting rights; 

provided, however, that such an 

Adviser or General Account shall vote 

its shares in such other manner as may 

be required by the Commission or its 

staff. 

8. Each Fund will comply with all 

provisions of the 1940 Act requiring 

voting by shareholders (which, for these 

purposes, shall be the persons having a 

voting interest in its shares), and, in 

particular, the Fund will either provide 

for annual meetings (except to the 

extent that the Commission may 

interpret Section 16 of the 1940 Act not 

to require such meetings) or comply 

with Section 16(c) of the 1940 Act 

(although each Fund is not, or will not 

be, one of those trusts of the type 

described in Section 16(c) of the 1940 

Act), as well as with Section 16(a) of the 

1940 Act and, if and when applicable, 

Section 16(b) of the 1940 Act. Further, 

each Fund will act in accordance with 

the Commission’s interpretations of the 

requirements of Section 16(a) with 

respect to periodic elections of 

directors/trustees and with whatever 

rules the Commission may promulgate 

thereunder. 

9. A Fund will make its shares 

available to the VLI Accounts, VA 

Accounts, and Qualified Plans at or 

about the time it accepts any seed 

capital from its Adviser or from the 

General Account of a Participating 

Insurance Company. 

10. Each Fund has notified, or will 

notify, all Participants that disclosure 

regarding potential risks of mixed and 

shared funding may be appropriate in 

VA Account and VLI Account 

Prospectuses or Qualified Plan 

documents. Each Fund will disclose, in 

its prospectus that: (a) Shares of the 

Fund may be offered to both VA 

Accounts and VLI Accounts and, if 

applicable, to Qualified Plans; (b) due to 

differences in tax treatment and other 

considerations, the interests of various 

Variable Contract owners participating 

in the Fund and the interests of 

Qualified Plan participants investing in 

the Fund, if applicable, may conflict; 

and (c) the Fund’s Board will monitor 

events in order to identify the existence 

of any material irreconcilable conflicts 

and to determine what action, if any, 

should be taken in response to any such 

conflicts. 

11. If and to the extent Rule 6e–2 and 

Rule 6e–3(T) under the 1940 Act are 

amended, or proposed Rule 6e–3 under 

the 1940 Act is adopted, to provide 

exemptive relief from any provision of 

the 1940 Act, or the rules thereunder, 

with respect to mixed or shared 

funding, on terms and conditions 

materially different from any 

exemptions granted in the order 

requested in the Application, then each 

Fund and/or Participating Insurance 

Companies, as appropriate, shall take 

such steps as may be necessary to 

comply with Rules 6e–2 or 6e–3(T), as 

amended, or Rule 6e–3, to the extent 

such rules are applicable. 

12. Each Participant, at least annually, 

shall submit to the Board of each Fund 

such reports, materials or data as the 

Board reasonably may request so that 


daltland on DSKBBV9HB2PROD with NOTICES
27042 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

the directors/trustees may fully carry 

out the obligations imposed upon the 

Board by the conditions contained in 

the Application. Such reports, materials 

and data shall be submitted more 

frequently if deemed appropriate by the 

Board. The obligations of the 

Participants to provide these reports, 

materials and data to the Board, when 

it so reasonably requests, shall be a 

contractual obligation of all Participants 

under their participation agreement 

with the Fund. 

13. All reports of potential or existing 

conflicts received by a Board, and all 

Board action with regard to determining 

the existence of a conflict, notifying 

Participants of a conflict and 

determining whether any proposed 

action adequately remedies a conflict, 

will be properly recorded in the minutes 

of the Board or other appropriate 

records, and such minutes or other 

records shall be made available to the 

Commission upon request. 

14. Each Fund will not accept a 

purchase order from a Qualified Plan if 

such purchase would make the 

Qualified Plan an owner of 10 percent 

or more of the assets of a Fund unless 

the Qualified Plan executes an 

agreement with the Fund governing 

participation in the Fund that includes 

the conditions set forth herein to the 

extent applicable. A Qualified Plan will 

execute an application containing an 

acknowledgement of this condition at 

the time of its initial purchase of shares. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12509 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–789, OMB Control No. 

3235–0371] 

Proposed Collection; Comment 

Request; Generic ICR: Generic 

Clearance for the Collection of 

Qualitative Feedback on Agency 

Service Delivery 

Upon Written Request Copies Available 

From: U.S. Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

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. 

The information collection activity 

will garner qualitative customer and 

stakeholder feedback in an efficient, 

timely manner, in accordance with the 

Administration’s commitment to 

improving service delivery. By 

qualitative feedback we mean 

information that provides useful 

insights on perceptions and opinions, 

but are not statistical surveys that yield 

quantitative results that can be 

generalized to the population of study. 

This feedback will provide insights into 

customer or stakeholder perceptions, 

experiences and expectations, provide 

an early warning of issues with service, 

or focus attention on areas where 

communication, training or changes in 

operations might improve delivery of 

products or services. These collections 

will allow for ongoing, collaborative and 

actionable communications between the 

SEC and its customers and stakeholders. 

It will also allow feedback to contribute 

directly to the improvement of program 

management. 

Feedback collected under this generic 

clearance will provide useful 

information, but it will not yield data 

that can be generalized to the overall 

population. This type of generic 

clearance for qualitative information 

will not be used for quantitative 

information collections that are 

designed to yield reliably actionable 

results, such as monitoring trends over 

time or documenting program 

performance. Depending on the degree 

of influence the results are likely to 

have, such collections may still be 

eligible for submission for other generic 

mechanisms that are designed to yield 

quantitative results. 

Below is the projected average 

estimates for the next three years: 

Expected Annual Number of 

Activities: [10]. 

Respondents: [20,000]. 

Annual Responses: [20,000]. 

Frequency of Response: Once per 

request. 

Average Minutes per Response: [10]. 

Burden Hours: [3500]. 

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 

estimates 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. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

Please direct your written comments 

to: Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Candace 

Kenner, 100 F Street NE, Washington, 

DC 20549, or send an email to: PRA_

Mailbox@sec.gov. 

Dated: June 5, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12434 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83381; File No. SR– 

NYSEArca–2018–38] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to the Index 

Methodology Applicable to Indexes 

Underlying iShares California AMTFree Muni Bond ETF and iShares New 

York AMT-Free Muni Bond ETF 

June 5, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on May 21, 

2018, NYSE Arca, Inc. (‘‘Exchange’’ or 

‘‘NYSE Arca’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes changes 

relating to the index methodology 

applicable to the indexes underlying 


daltland on DSKBBV9HB2PROD with NOTICES