5834 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

1For purposes of the requested order, the term 

‘‘Distributor’’ shall include any other entity that 

acts as the distributor and principal underwriter of 

the Creation Units of Shares of the Funds in the 

future and complies with the terms and conditions 

of the application. 

2For the purposes of the requested order, 

‘‘successor’’ is limited to an entity that results from 

a reorganization into another jurisdiction or a 

change in the type of business organization. 

3All entities that currently intend to rely on the 

order are named as applicants. Any entity that 

Funds will maintain and preserve a 

copy of the order, the FOF Participation 

Agreement, and the list with any 

updated information for the duration of 

the investment and for a period of not 

less than six years thereafter, the first 

two years in an easily accessible place. 

10. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors or trustees of each 

Investing Management Company 

including a majority of the disinterested 

directors or trustees, will find that the 

advisory fees charged under such 

contract are based on services provided 

that will be in addition to, rather than 

duplicative of, the services provided 

under the advisory contract(s) of any 

Fund in which the Investing 

Management Company may invest. 

These findings and their basis will be 

fully recorded in the minute books of 

the appropriate Investing Management 

Company. 

11. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

12. No Fund will acquire securities of 

an investment company or company 

relying on section 3(c)(1) or 3(c)(7) of 

the Act in excess of the limits contained 

in section 12(d)(1)(A) of the Act, except 

to the extent the Fund acquires 

securities of another investment 

company pursuant to exemptive relief 

from the Commission permitting the 

Fund to acquire securities of one or 

more investment companies for shortterm cash management purposes. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02064 Filed 2–2–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31430; 812–14402] 

AlphaMark Advisors, LLC, et al.; Notice 

of Application 

January 28, 2015. 

AGENCY: Securities and Exchange 

Commission (the ‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) for an exemption from sections 

2(a)(32), 5(a)(1), 22(d) and 22(e) of the 

Act and rule 22c–1 under the Act, and 

under sections 6(c) and 17(b) of the Act 

for an exemption from sections 17(a)(1) 

and (2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and (B) of the Act. 

APPLICANTS: ETF Series Solutions (the 

‘‘Trust’’), AlphaMark Advisors, LLC 

(‘‘AlphaMark’’), and Quasar 

Distributors, LLC (‘‘Quasar’’). 

SUMMARY: Applicants request an order 

that permits: (a) Actively-managed 

series of the Trust to issue shares 

(‘‘Shares’’) redeemable in large 

aggregations only (‘‘Creation Units’’); (b) 

secondary market transactions in Shares 

to occur at negotiated market prices; (c) 

certain series to pay redemption 

proceeds, under certain circumstances, 

more than seven days after the tender of 

Creation Units for redemption; (d) 

certain affiliated persons of the series to 

deposit securities into, and receive 

securities from, the series in connection 

with the purchase and redemption of 

Creation Units; and (e) certain registered 

management investment companies and 

unit investment trusts outside of the 

same group of investment companies as 

the series to acquire Shares. 

DATES: Filing Dates: The application 

was filed on December 18, 2014. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on Februry 23, 2015, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549. Applicants: 

AlphaMark Advisors, LLC, 250 

Grandview Drive, Suite 175, Ft. 

Mitchell, Kentucky 41017; ETF Series 

Solutions and Quasar Distributors, LLC, 

615 East Michigan Street, 4th Floor, 

Milwaukee, WI 53202. 

FOR FURTHER INFORMATION CONTACT: 

Courtney S. Thornton, Senior Counsel, 

at (202) 551–6812 or David P. Bartels, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

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

calling (202) 551–8090. 

Applicants’ Representations 

1. The Trust is registered as an openend management investment company 

under the Act and is organized as a 

Delaware statutory trust. The Trust will 

offer Funds (as defined below), each of 

which will have distinct investment 

strategies and will attempt to achieve its 

investment objective by utilizing an 

active management strategy. 

2. AlphaMark, an Ohio limited 

liability company, is, and any other 

Adviser (as defined below) will be, 

registered as an investment adviser 

under the Investment Advisers Act of 

1940 (the ‘‘Advisers Act’’). An Adviser 

will be the investment adviser to each 

Fund and may enter into subadvisory 

agreements with one or more affiliated 

or unaffiliated investment sub-advisers 

to a Fund (each, a ‘‘Sub-Adviser’’). Any 

Sub-Adviser will be registered or not 

subject to registration under the 

Advisers Act. Quasar, a Delaware 

limited liability company, is, and any 

other Distributor will be, registered as a 

broker-dealer (‘‘Broker’’) under the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’).1 A Distributor will 

serve as the principal underwriter and 

distributor for each of the Funds. 

3. Applicants request that the order 

apply to AlphaMark Small Cap Growth 

ETF (the ‘‘Initial Fund’’) and to future 

series of the Trust or of any other openend investment company that may be 

created in the future that, in each case, 

(a) is an actively managed exchangetraded fund (‘‘ETF’’), (b) is advised by 

AlphaMark or an entity controlling, 

controlled by, or under common control 

with AlphaMark (each such entity or 

any successor entity thereto, an 

‘‘Adviser’’) 2 and (c) complies with the 

terms and conditions of the application 

(individually a ‘‘Fund,’’ and 

collectively, the ‘‘Funds’’).3


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relies on the order in the future will comply with 

the terms and conditions of the application. 

4 Depositary Receipts are typically issued by a 

financial institution (a ‘‘Depository’’) and evidence 

ownership in a security or pool of securities that 

have been deposited with the Depository. A Fund 

will not invest in any Depositary Receipts that the 

Adviser or any Sub-Adviser deems to be illiquid or 

for which pricing information is not readily 

available. No affiliated persons of applicants or any 

Sub-Adviser will serve as the Depository for any 

Depositary Receipts held by a Fund. 

5 If a Fund invests in derivatives, then (a) the 

Fund’s board of trustees or directors (for any entity, 

the ‘‘Board’’) will periodically review and approve 

the Fund’s use of derivatives and how the Fund’s 

investment adviser assesses and manages risk with 

respect to the Fund’s use of derivatives and (b) the 

Fund’s disclosure of its use of derivatives in its 

offering documents and periodic reports will be 

consistent with relevant Commission and staff 

guidance. 

6An Acquiring Fund may rely on the order only 

to invest in a Fund and not in any other registered 

investment company. 

7The Funds must comply with the federal 

securities laws in accepting Deposit Instruments 

and satisfying redemptions with Redemption 

Instruments, including that the Deposit Instruments 

and Redemption Instruments are sold in 

transactions that would be exempt from registration 

under the Securities Act of 1933 (‘‘Securities Act’’). 

In accepting Deposit Instruments and satisfying 

redemptions with Redemption Instruments that are 

restricted securities eligible for resale pursuant to 

Rule 144A under the Securities Act, the Funds will 

comply with the conditions of Rule 144A. 

8Each Fund will sell and redeem Creation Units 

on any day that the Trust is open for business, 

including as required by section 22(e) of the Act 

(each, a ‘‘Business Day’’). 

9The portfolio used for this purpose will be the 

same portfolio used to calculate the Fund’s net asset 

value (‘‘NAV’’) for that Business Day. 

10A tradeable round lot for a security will be the 

standard unit of trading in that particular type of 

security in its primary market. 

11A TBA Transaction is a method of trading 

mortgage-backed securities. In a TBA Transaction, 

the buyer and seller agree on general trade 

parameters such as agency, settlement date, par 

amount and price. 

12This includes instruments that can be 

transferred in kind only with the consent of the 

original counterparty to the extent the Fund does 

not intend to seek such consents. 

13Because these instruments will be excluded 

from the Creation Basket, their value will be 

reflected in the determination of the Balancing 

Amount (defined below). 

4. The Funds may invest in equity 

securities or fixed income securities 

traded in the U.S. or non-U.S. markets. 

Funds that invest in equity securities or 

fixed income securities traded in the 

U.S. or non-U.S. markets are ‘‘Global 

Funds.’’ Funds that invest solely in 

foreign equity securities or foreign fixed 

income securities are ‘‘Foreign Funds.’’ 

The Funds may also invest in 

‘‘Depositary Receipts’’ 4 and may engage 

in TBA Transactions (as defined below). 

Applicants further state that, in order to 

implement each Fund’s investment 

strategy, the Adviser and/or SubAdvisers of a Fund may review and 

change the securities, or instruments, or 

other assets or positions held by the 

Fund (‘‘Portfolio Positions’’) daily.5

5. Applicants also request that any 

exemption under section 12(d)(1)(J) of 

the Act from sections 12(d)(1)(A) and 

(B) apply to: (i) Any Fund; (ii) any 

Acquiring Fund (as defined below); and 

(iii) any Brokers selling Shares of a 

Fund to an Acquiring Fund or any 

principal underwriter of a Fund. A 

management investment company or 

unit investment trust registered under 

the Act that is not part of the same 

‘‘group of investment companies’’ as the 

Fund within the meaning of section 

12(d)(1)(G)(ii) of the Act and that 

acquires Shares of a Fund in excess of 

the limits of Section 12(d)(1)(A) of the 

Act is referred to as an ‘‘Acquiring 

Management Company’’ or an 

‘‘Acquiring Trust,’’ respectively, and the 

Acquiring Management Companies and 

Acquiring Trusts are referred to 

collectively as ‘‘Acquiring Funds.’’ 6

6. A Creation Unit will consist of at 

least 25,000 Shares and applicants 

expect that the trading price of a Share 

will range from $20 to $100. All orders 

to purchase Creation Units must be 

placed with the Distributor by or 

through an ‘‘Authorized Participant,’’ 

which is a participant in the Depository 

Trust Company (‘‘DTC,’’ such 

participant a ‘‘DTC Participant’’) that 

has executed a ‘‘Participant Agreement’’ 

with the Distributor. Purchase orders for 

Funds will be processed either through 

the enhanced clearing process of the 

Continuous Net Settlement System of 

the National Securities Clearing 

Corporation (‘‘NSCC’’, and such process 

the ‘‘NSCC Process’’) or through the 

manual clearing process of the DTC 

(‘‘DTC Process’’). 

7. In order to keep costs low and 

permit each Fund to be as fully invested 

as possible, Shares will be purchased 

and redeemed in Creation Units and 

generally on an in-kind basis. Except 

where the purchase or redemption will 

include cash under the limited 

circumstances specified below, 

purchasers will be required to purchase 

Creation Units by making an in-kind 

deposit of specified instruments 

(‘‘Deposit Instruments’’), and 

shareholders redeeming their Shares 

will receive an in-kind transfer of 

specified instruments (‘‘Redemption 

Instruments’’).7 On any given Business 

Day 8 the names and quantities of the 

instruments that constitute the Deposit 

Instruments and the names and 

quantities of the instruments that 

constitute the Redemption Instruments 

will be identical, and these instruments 

may be referred to, in the case of either 

a purchase or a redemption, as the 

‘‘Creation Basket.’’ In addition, the 

Creation Basket will correspond pro rata 

to the positions in a Fund’s portfolio 

(including cash positions),9 except: (a) 

In the case of bonds, for minor 

differences when it is impossible to 

break up bonds beyond certain 

minimum sizes needed for transfer and 

settlement; (b) for minor differences 

when rounding is necessary to eliminate 

fractional shares or lots that are not 

tradeable round lots; 10 or (c) TBA 

Transactions,11 short positions and 

other positions that cannot be 

transferred in kind 12 will be excluded 

from the Creation Basket.13 If there is a 

difference between the NAV attributable 

to a Creation Unit and the aggregate 

market value of the Creation Basket 

exchanged for the Creation Unit, the 

party conveying instruments with the 

lower value will also pay to the other an 

amount in cash equal to that difference 

(the ‘‘Balancing Amount’’). 

8. Purchases and redemptions of 

Creation Units may be made in whole or 

in part on a cash basis, rather than in 

kind, solely under the following 

circumstances: (a) To the extent there is 

a Balancing Amount, as described 

above; (b) if, on a given Business Day, 

a Fund announces before the open of 

trading that all purchases, all 

redemptions or all purchases and 

redemptions on that day will be made 

entirely in cash; (c) if, upon receiving a 

purchase or redemption order from an 

Authorized Participant, a Fund 

determines to require the purchase or 

redemption, as applicable, to be made 

entirely in cash; (d) if, on a given 

Business Day, a Fund requires all 

Authorized Participants purchasing or 

redeeming Shares on that day to deposit 

or receive (as applicable) cash in lieu of 

some or all of the Deposit Instruments 

or Redemption Instruments, 

respectively, solely because: (i) Such 

instruments are not eligible for transfer 

through either the NSCC Process or DTC 

Process; or (ii) in the case of Global 

Funds and Foreign Funds, such 

instruments are not eligible for trading 

due to local trading restrictions, local 

restrictions on securities transfers or 

other similar circumstances; or (e) if a 

Fund permits an Authorized Participant 

to deposit or receive (as applicable) cash 

in lieu of some or all of the Deposit 

Instruments or Redemption Instruments, 

respectively, solely because: (i) Such 

instruments are, in the case of the 

purchase of a Creation Unit, not 

available in sufficient quantity; (ii) such 

instruments are not eligible for trading 

by an Authorized Participant or the 

investor on whose behalf the 

Authorized Participant is acting; or (iii) 

a holder of Shares of a Global Fund or 


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14A ‘‘custom order’’ is any purchase or 

redemption of Shares made in whole or in part on 

a cash basis in reliance on clause (e)(i) or (e)(ii). 

15 If Shares are listed on The NASDAQ Stock 

Market LLC (‘‘Nasdaq’’) or a similar electronic 

Listing Market (including NYSE Arca, Inc.), one or 

more member firms of that Listing Market will act 

as market maker (a ‘‘Market Maker’’) and maintain 

a market for Shares trading on that Listing Market. 

On Nasdaq, no particular Market Maker would be 

contractually obligated to make a market in Shares. 

However, the listing requirements on Nasdaq 

stipulate that at least two Market Makers must be 

registered in Shares to maintain a listing. Registered 

Market Makers are required to make a continuous 

two-sided market or subject themselves to 

regulatory sanctions. No Market Maker will be an 

affiliated person, or an affiliated person of an 

affiliated person, of the Funds, except within the 

meaning of section 2(a)(3)(A) or (C) of the Act due 

solely to ownership of Shares. 

16Shares will be registered in book-entry form 

only. DTC or its nominee will be the registered 

owner of all outstanding Shares. Beneficial 

ownership of Shares will be shown on the records 

of DTC or DTC Participants. 

17Under accounting procedures followed by the 

Fund, trades made on the prior Business Day (‘‘T’’) 

will be booked and reflected in NAV on the current 

Business Day (T+1). Accordingly, the Funds will be 

able to disclose at the beginning of the Business Day 

the portfolio that will form the basis for the NAV 

calculation at the end of the Business Day. 

Foreign Fund would be subject to 

unfavorable income tax treatment if the 

holder receives redemption proceeds in 

kind.14

9. Each Business Day, before the open 

of trading on a national securities 

exchange, as defined in section 2(a)(26) 

of the Act (a ‘‘Listing Market’’), on 

which Shares are listed and traded, each 

Fund will cause to be published through 

the NSCC the names and quantities of 

the instruments comprising the Creation 

Basket, as well as the estimated 

Balancing Amount (if any), for that day. 

The published Creation Basket will 

apply until a new Creation Basket is 

announced on the following Business 

Day, and there will be no intra-day 

changes to the Creation Basket except to 

correct errors in the published Creation 

Basket. The Listing Market will 

disseminate, every 15 seconds 

throughout the regular trading hours, 

through the facilities of the 

Consolidated Tape Associate, an 

estimated NAV, which is an amount per 

Share representing the current value of 

the Portfolio Positions that were 

publicly disclosed prior to the 

commencement of trading in Shares on 

the Listing Market. 

10. Each Fund will recoup the 

settlement costs charged by NSCC and 

DTC by imposing a fee (the 

‘‘Transaction Fee’’) on investors 

purchasing or redeeming Creation Units. 

Where a Fund permits an in-kind 

purchaser or redeemer to deposit or 

receive cash in lieu of one or more 

Deposit or Redemption Instruments, the 

purchaser or redeemer may be assessed 

a higher Transaction Fee to offset the 

cost of buying or selling those particular 

Deposit or Redemption Instruments. In 

all cases, such Transaction Fees will be 

limited in accordance with 

requirements of the Commission 

applicable to management investment 

companies offering redeemable 

securities. All orders to purchase 

Creation Units must be placed with the 

Distributor by or through an Authorized 

Participant and the Distributor will 

transmit such orders to the Funds. The 

Distributor will maintain a record of 

Creation Unit purchases and will send 

out confirmations of such purchases. 

11. Purchasers of Shares in Creation 

Units may hold such Shares or may sell 

such Shares into the secondary market. 

Shares will be listed and traded at 

negotiated prices on a Listing Market 

and it is expected that the relevant 

Listing Market will designate one or 

more member firms to maintain a 

market for the Shares.15 The price of 

Shares trading on a Listing Market will 

be based on a current bid-offer in the 

secondary market. Purchases and sales 

of Shares in the secondary market will 

not involve a Fund and will be subject 

to customary brokerage commissions 

and charges. 

12. Applicants expect that purchasers 

of Creation Units will include 

institutional investors and arbitrageurs. 

Applicants expect that secondary 

market purchasers of Shares will 

include both institutional and retail 

investors.16 Applicants believe that the 

structure and operation of the Funds 

will be designed to enable efficient 

arbitrage and, thereby, minimize the 

probability that Shares will trade at a 

material premium or discount to a 

Fund’s NAV. 

13. Shares will not be individually 

redeemable and owners of Shares may 

acquire those Shares from a Fund, or 

tender such shares for redemption to the 

Fund, in Creation Units only. To 

redeem, an investor must accumulate 

enough Shares to constitute a Creation 

Unit. Redemption requests must be 

placed by or through an Authorized 

Participant. As discussed above, 

redemptions of Creation Units will 

generally be made on an in-kind basis, 

subject to certain specified exceptions 

under which redemptions may be made 

in whole or in part on a cash basis, and 

will be subject to a Transaction Fee. 

14. Neither a Trust nor any Fund will 

be advertised or marketed or otherwise 

held out as a traditional open-end 

investment company or mutual fund. 

Instead, each Fund will be marketed as 

an ‘‘actively-managed exchange-traded 

fund.’’ All marketing materials that 

describe the features or method of 

obtaining, buying, or selling Creation 

Units, or Shares traded on a Listing 

Market, or refer to redeemability, will 

prominently disclose that Shares are not 

individually redeemable and that the 

owners of Shares may acquire those 

Shares from a Fund or tender those 

Shares for redemption to the Fund in 

Creation Units only. 

15. Each Fund’s Web site (‘‘Web 

site’’), which will be publicly available 

prior to the offering of Shares, will 

include the Fund’s prospectus 

(‘‘Prospectus’’), statement of additional 

information (‘‘SAI’’), and summary 

prospectus, if used. The Web site will 

contain, on a per Share basis for each 

Fund, the prior Business Day’s NAV and 

the market closing price or mid-point of 

the bid/ask spread at the time of 

calculation of such NAV (‘‘Bid/Ask 

Price’’), and a calculation of the 

premium or discount of the market 

closing price or the Bid/Ask Price 

against such NAV. On each Business 

Day, prior to the commencement of 

trading in Shares on a Listing Market, 

each Fund shall post on the Web site the 

identities and quantities of the Portfolio 

Positions held by the Fund that will 

form the basis for the calculation of the 

NAV at the end of that Business Day.17

Applicants’ Legal Analysis 

1. Applicants request an order under 

section 6(c) of the Act granting an 

exemption from sections 2(a)(32), 

5(a)(1), 22(d) and 22(e) of the Act and 

rule 22c–1 under the Act; and under 

sections 6(c) and 17(b) of the Act 

granting an exemption from sections 

17(a)(1) and (2) of the Act, and under 

section 12(d)(1)(J) for an exemption 

from sections 12(d)(1)(A) and (B) of the 

Act. 

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

the Commission may exempt any 

person, security or transaction, or any 

class of persons, securities or 

transactions, from any provision of the 

Act, 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 Act. Section 17(b) 

of the Act authorizes the Commission to 

exempt a proposed transaction from 

section 17(a) of the Act if evidence 

establishes that the terms of the 

transaction, including the consideration 

to be paid or received, are reasonable 

and fair and do not involve 

overreaching on the part of any person 

concerned, and the proposed 

transaction is consistent with the 


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18Applicants acknowledge that no relief obtained 

from the requirements of Section 22(e) of the Act 

will affect any obligations that it may otherwise 

have under Rule 15c6–1 under the Exchange Act. 

Rule 15c6–1 requires that most securities 

transactions be settled within three business days 

of the trade date. 

19Certain countries in which a Fund may invest 

have historically had settlement periods of up to 15 

calendar days. 

policies of the registered investment 

company and the general provisions of 

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

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Sections 5(a)(1) and 2(a)(32) of the Act 

3. Section 5(a)(1) of the Act defines an 

‘‘open-end company’’ as a management 

investment company that is offering for 

sale or has outstanding any redeemable 

security of which it is the issuer. 

Section 2(a)(32) of the Act defines a 

redeemable security as any security, 

other than short-term paper, under the 

terms of which the holder, upon its 

presentation to the issuer, is entitled to 

receive approximately a proportionate 

share of the issuer’s current net assets, 

or the cash equivalent. Because Shares 

will not be individually redeemable, 

applicants request an order that would 

permit the Trust to register as an openend management investment company 

and issue Shares that are redeemable in 

Creation Units only. Applicants state 

that investors may purchase Shares in 

Creation Units from each Fund and that 

Creation Units will always be 

redeemable in accordance with the 

provisions of the Act. Applicants further 

state that because the market price of 

Shares will be disciplined by arbitrage 

opportunities, investors should be able 

to sell Shares in the secondary market 

at prices that do not vary materially 

from their NAV. 

Section 22(d) of the Act and Rule 22c– 

1 Under the Act 

4. Section 22(d) of the Act, among 

other things, prohibits a dealer from 

selling a redeemable security that is 

currently being offered to the public by 

or through a principal underwriter, 

except at a current public offering price 

described in the prospectus. Rule 22c– 

1 under the Act generally requires that 

a dealer selling, redeeming, or 

repurchasing a redeemable security do 

so only at a price based on its NAV. 

Applicants state that secondary market 

trading in Shares will take place at 

negotiated prices, not at a current 

offering price described in the 

Prospectus, and not at a price based on 

NAV. Thus, purchases and sales of 

Shares in the secondary market will not 

comply with section 22(d) of the Act 

and rule 22c–1 under the Act. 

Applicants request an exemption under 

section 6(c) from these provisions. 

5. Applicants state that, while there is 

little legislative history regarding 

section 22(d), its provisions, as well as 

those of rule 22c–1, appear to have been 

designed (a) to prevent dilution caused 

by certain riskless-trading schemes by 

principal underwriters and contract 

dealers, (b) to prevent unjust 

discrimination or preferential treatment 

among buyers and (c) to ensure an 

orderly distribution system of shares by 

contract dealers by eliminating price 

competition from non-contract dealers 

who could offer investors shares at less 

than the published sales price and who 

could pay investors a little more than 

the published redemption price. 

6. Applicants assert that the 

protections intended to be afforded by 

Section 22(d) and rule 22c–1 are 

adequately addressed by the proposed 

methods for creating, redeeming and 

pricing Creation Units and pricing and 

trading Shares. Applicants state that (a) 

secondary market trading in Shares does 

not involve the Funds as parties and 

cannot result in dilution of an 

investment in Shares and (b) to the 

extent different prices exist during a 

given trading day, or from day to day, 

such variances occur as a result of thirdparty market forces but do not occur as 

a result of unjust or discriminatory 

manipulation. Finally, applicants assert 

that competitive forces in the 

marketplace should ensure that the 

margin between NAV and the price for 

the Shares in the secondary market 

remains narrow. 

Section 22(e) of the Act 

7. Section 22(e) of the Act generally 

prohibits a registered investment 

company from suspending the right of 

redemption or postponing the date of 

payment of redemption proceeds for 

more than seven days after the tender of 

a security for redemption. Applicants 

observe that the settlement of 

redemptions of Creation Units of the 

Foreign and Global Funds is contingent 

not only on the settlement cycle of the 

U.S. securities markets but also on the 

delivery cycles present in foreign 

markets for underlying foreign Portfolio 

Positions in which those Funds invest. 

Applicants have been advised that, 

under certain circumstances, the 

delivery cycles for transferring Portfolio 

Positions to redeeming investors, 

coupled with local market holiday 

schedules, will require a delivery 

process of up to fifteen (15) calendar 

days. Applicants therefore request relief 

from section 22(e) in order to provide 

payment or satisfaction of redemptions 

within a longer number of calendar days 

as required for such payment or 

satisfaction in the principal local 

markets where transactions in the 

Portfolio Positions of each Foreign and 

Global Fund customarily clear and 

settle, but in all cases no later than 

fifteen (15) days following the tender of 

a Creation Unit.18

8. Applicants state that section 22(e) 

was designed to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

Applicants assert that the protections 

intended to be afforded by Section 22(e) 

are adequately addressed by the 

proposed method and securities 

delivery cycles for redeeming Creation 

Units. Applicants state that allowing 

redemption payments for Creation Units 

of a Fund to be made within a 

maximum of fifteen (15) calendar 

days 19 would not be inconsistent with 

the spirit and intent of section 22(e). 

Applicants represent that each Fund’s 

Prospectus and/or SAI will identify 

those instances in a given year where, 

due to local holidays, more than seven 

calendar days, up to a maximum of 

fifteen (15) calendar days, will be 

needed to deliver redemption proceeds 

and will list such holidays. Applicants 

are not seeking relief from section 22(e) 

with respect to Foreign and Global 

Funds that do not effect redemptions inkind. 

Section 12(d)(1) of the Act 

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

prohibits a registered investment 

company from acquiring shares of an 

investment company if the securities 

represent more than 3% of the total 

outstanding voting stock of the acquired 

company, more than 5% of the total 

assets of the acquiring company, or, 

together with the securities of any other 

investment companies, more than 10% 

of the total assets of the acquiring 

company. Section 12(d)(1)(B) of the Act 

prohibits a registered open-end 

investment company, its principal 

underwriter, or any other broker or 

dealer from selling its shares 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 if the sale 

will cause more than 10% of the 

acquired company’s voting stock to be 

owned by investment companies 

generally. 

10. Applicants request relief to permit 

Acquiring Funds to acquire Shares in 

excess of the limits in section 


rljohnson on DSK3VPTVN1PROD with NOTICES
5838 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

20An ‘‘Acquiring Fund Affiliate’’ is any 

Acquiring Fund Advisor, Acquiring Fund SubAdvisor, Sponsor, promoter and principal 

underwriter of an Acquiring Fund, and any person 

controlling, controlled by or under common control 

with any of these entities. ‘‘Fund Affiliate’’ is an 

investment adviser, promoter, or principal 

underwriter of a Fund or any person controlling, 

controlled by or under common control with any 

of these entities. 

21Any reference to NASD Conduct Rule 2830 

includes any successor or replacement rule that 

may be adopted by the Financial Industry 

Regulatory Authority. 

22Applicants anticipate that most Acquiring 

Funds will purchase Shares in the secondary 

market and will not purchase or redeem Creation 

Units directly from a Fund. To the extent that 

12(d)(1)(A) of the Act and to permit the 

Funds, their principal underwriters and 

any Broker to sell Shares to Acquiring 

Funds in excess of the limits in section 

12(d)(l)(B) of the Act. Applicants submit 

that the proposed conditions to the 

requested relief address the concerns 

underlying the limits in section 12(d)(1), 

which include concerns about undue 

influence, excessive layering of fees and 

overly complex structures. 

11. Applicants submit that their 

proposed conditions address concerns 

regarding the potential for undue 

influence. To limit the control that an 

Acquiring Fund may have over a Fund, 

applicants propose a condition 

prohibiting the adviser of an Acquiring 

Management Company (‘‘Acquiring 

Fund Advisor’’), sponsor of an 

Acquiring Trust (‘‘Sponsor’’), any 

person controlling, controlled by, or 

under common control with the 

Acquiring Fund Advisor or Sponsor, 

and any investment company or issuer 

that would be an investment company 

but for sections 3(c)(1) or 3(c)(7) of the 

Act that is advised or sponsored by the 

Acquiring Fund Advisor, the Sponsor, 

or any person controlling, controlled by, 

or under common control with the 

Acquiring Fund Advisor or Sponsor 

(‘‘Acquiring Fund’s Advisory Group’’) 

from controlling (individually or in the 

aggregate) a Fund within the meaning of 

section 2(a)(9) of the Act. The same 

prohibition would apply to any subadviser to an Acquiring Fund 

(‘‘Acquiring Fund Sub-Advisor’’), any 

person controlling, controlled by or 

under common control with the 

Acquiring Fund Sub-Advisor, and any 

investment company or issuer that 

would be an investment company but 

for sections 3(c)(1) or 3(c)(7) of the Act 

(or portion of such investment company 

or issuer) advised or sponsored by the 

Acquiring Fund Sub-Advisor or any 

person controlling, controlled by or 

under common control with the 

Acquiring Fund Sub-Advisor 

(‘‘Acquiring Fund’s Sub-Advisory 

Group’’). 

12. Applicants propose a condition to 

ensure that no Acquiring Fund or 

Acquiring Fund Affiliate 20 (except to 

the extent it is acting in its capacity as 

an investment adviser to a Fund) will 

cause a Fund to purchase a security in 

an offering of securities during the 

existence of an underwriting or selling 

syndicate of which a principal 

underwriter is an Underwriting Affiliate 

(‘‘Affiliated Underwriting’’). An 

‘‘Underwriting Affiliate’’ is a principal 

underwriter in any underwriting or 

selling syndicate that is an officer, 

director, member of an advisory board, 

Acquiring Fund Advisor, Acquiring 

Fund Sub-Advisor, employee or 

Sponsor of the Acquiring Fund, or a 

person of which any such officer, 

director, member of an advisory board, 

Acquiring Fund Advisor, Acquiring 

Fund Sub-Advisor, employee or 

Sponsor is an affiliated person (except 

any person whose relationship to the 

Fund is covered by section 10(f) of the 

Act is not an Underwriting Affiliate). 

13. Applicants propose several 

conditions to address the potential for 

layering of fees. Applicants note that the 

Board of any Acquiring Management 

Company, including a majority of the 

directors or trustees who are not 

‘‘interested persons’’ within the 

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

(for any Board, the ‘‘Independent 

Trustees’’), will be required to find that 

the advisory fees charged under the 

contract are based on services provided 

that will be in addition to, rather than 

duplicative of, services provided under 

the advisory contract of any Fund in 

which the Acquiring Management 

Company may invest. Applicants also 

state that any sales charges and/or 

service fees charged with respect to 

shares of an Acquiring Fund will not 

exceed the limits applicable to a fund of 

funds as set forth in NASD Conduct 

Rule 2830.21

14. Applicants submit that the 

proposed arrangement will not create an 

overly complex fund structure. 

Applicants note that a Fund will be 

prohibited from acquiring securities of 

any investment company or company 

relying on section 3(c)(1) or 3(c)(7) of 

the Act in excess of the limits contained 

in section 12(d)(1)(A) of the Act, except 

to the extent permitted by exemptive 

relief from the Commission permitting 

the Fund to purchase shares of other 

investment companies for short-term 

cash management purposes. 

15. To ensure that an Acquiring Fund 

is aware of the terms and conditions of 

the requested order, the Acquiring 

Funds must enter into an agreement 

with the respective Funds (‘‘Acquiring 

Fund Agreement’’). The Acquiring Fund 

Agreement will include an 

acknowledgement from the Acquiring 

Fund that it may rely on the order only 

to invest in a Fund and not in any other 

investment company. 

Section 17(a) of the Act 

16. Section 17(a) of the Act generally 

prohibits an affiliated person of a 

registered investment company, or an 

affiliated person of such person 

(‘‘Second Tier Affiliates’’), from selling 

any security to or purchasing any 

security from the company. Section 

2(a)(3) of the Act defines ‘‘affiliated 

person’’ to include any person directly 

or indirectly owning, controlling, or 

holding with power to vote 5% or more 

of the outstanding voting securities of 

the other person and any person directly 

or indirectly controlling, controlled by, 

or under common control with, the 

other person. Section 2(a)(9) of the Act 

defines ‘‘control’’ as ‘‘the power to 

exercise a controlling influence over the 

management or policies’’ of the fund 

and provides that a control relationship 

will be presumed where one person 

owns more than 25% of another 

person’s voting securities. The Funds 

may be deemed to be controlled by the 

Adviser or an entity controlling, 

controlled by or under common control 

with the Adviser and hence affiliated 

persons of each other. In addition, the 

Funds may be deemed to be under 

common control with any other 

registered investment company (or 

series thereof) advised by the Adviser or 

an entity controlling, controlled by or 

under common control with the Adviser 

(an ‘‘Affiliated Fund’’). 

17. Applicants request an exemption 

under sections 6(c) and 17(b) of the Act 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit in-kind purchases and 

redemptions of Creation Units from the 

Funds by persons that are affiliated 

persons or Second Tier Affiliates of the 

Funds solely by virtue of one or more 

of the following: (a) Holding 5% or 

more, or more than 25%, of the Shares 

of a Trust of one or more Funds; (b) 

having an affiliation with a person with 

an ownership interest described in (a); 

or (c) holding 5% or more, or more than 

25%, of the shares of one or more 

Affiliated Funds. Applicants also 

request an exemption in order to permit 

each Fund to sell Shares to and redeem 

Shares from, and engage in the in-kind 

transactions that would accompany 

such sales and redemptions with, any 

Acquiring Fund of which the Fund is an 

affiliated person or Second-Tier 

Affiliate.22


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 5839 

purchases and sales of Shares occur in the 

secondary market and not through principal 

transactions directly between an Acquiring Fund 

and a Fund, relief from section 17(a) would not be 

necessary. However, the requested relief would 

apply to direct sales of Shares in Creation Units by 

a Fund to an Acquiring Fund and redemptions of 

those Shares in Creation Units. The requested relief 

is intended to cover transactions that would 

accompany such sales and redemptions. Applicants 

are not seeking relief from section 17(a) for, and the 

requested relief will not apply to, transactions 

where a Fund could be deemed an affiliated person, 

or an affiliated person of an affiliated person of an 

Acquiring Fund because an investment adviser to 

the Funds is also an investment adviser to that 

Acquiring Fund. 

23Applicants acknowledge that the receipt of 

compensation by (a) an affiliated person of an 

Acquiring Fund, or an affiliated person of such 

person, for the purchase by the Acquiring Fund of 

Shares of a Fund or (b) an affiliated person of a 

Fund, or an affiliated person of such person, for the 

sale by the Fund of its Shares to an Acquiring Fund, 

may be prohibited by section 17(e)(1) of the Act. 

The Acquiring Fund Agreement also will include 

this acknowledgment. 

18. Applicants assert that no useful 

purpose would be served by prohibiting 

such affiliated persons or Second Tier 

Affiliates from making in-kind 

purchases or in-kind redemptions of 

Shares of a Fund in Creation Units. Both 

the deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions will be the same for all 

purchases and redemptions. Deposit 

Instruments and Redemption 

Instruments will be valued in the same 

manner as those Portfolio Positions 

currently held by the relevant Funds 

and the valuation of the Deposit 

Instruments and Redemption 

Instruments will be made in an identical 

manner regardless of the identity of the 

purchaser or redeemer. Applicants do 

not believe that in-kind purchases and 

redemptions will result in abusive selfdealing or overreaching of the Fund. 

20. Applicants also submit that the 

sale of Shares to and redemption of 

Shares from an Acquiring Fund satisfies 

the standards for relief under sections 

17(b) and 6(c) of the Act. Applicants 

note that any consideration paid for the 

purchase or redemption of Shares 

directly from a Fund will be based on 

the NAV of the Fund.23 The Acquiring 

Fund Agreement will require any 

Acquiring Fund that purchases Creation 

Units directly from a Fund to represent 

that the purchase will be in compliance 

with its investment restrictions and 

consistent with the investment policies 

set forth in its registration statement. 

21. Applicants believe that: (a) With 

respect to the relief requested pursuant 

to section 17(b), the proposed 

transactions are fair and reasonable, and 

do not involve overreaching on the part 

of any person concerned, the proposed 

transactions are consistent with the 

policy of each Fund and, where 

applicable, Acquiring Fund, and the 

proposed transactions are consistent 

with the general purposes of the Act; 

and (b) with respect to the relief 

requested pursuant to section 6(c), the 

requested exemption for the proposed 

transactions is appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. 

Applicants’ Conditions 

Applicants agree that any order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

A. Actively-Managed Exchange-Traded 

Fund Relief 

1. Neither the Trust nor any Fund will 

be advertised or marketed as an openend investment company or mutual 

fund. Any advertising material that 

describes the purchase or sale of 

Creation Units or refers to redeemability 

will prominently disclose that the 

Shares are not individually redeemable 

and that owners of the Shares may 

acquire those Shares from the Fund and 

tender those Shares for redemption to 

the Fund in Creation Units only. 

2. The Web site, which is and will be 

publicly accessible at no charge, will 

contain, on a per Share basis for each 

Fund, the prior Business Day’s NAV and 

the market closing price or the Bid/Ask 

Price, and a calculation of the premium 

or discount of the market closing price 

or Bid/Ask Price against such NAV. 

3. As long as a Fund operates in 

reliance on the requested order, its 

Shares will be listed on a Listing 

Market. 

4. On each Business Day, before 

commencement of trading in Shares on 

a Fund’s Listing Market, the Fund will 

disclose on the Web site the identities 

and quantities of the Portfolio Positions 

held by the Fund that will form the 

basis for the Fund’s calculation of NAV 

per Share at the end of the Business 

Day. 

5. The Adviser or any Sub-Advisers, 

directly or indirectly, will not cause any 

Authorized Participant (or any investor 

on whose behalf an Authorized 

Participant may transact with the Fund) 

to acquire any Deposit Instrument for a 

Fund through a transaction in which the 

Fund could not engage directly. 

6. The requested relief to permit ETF 

operations will expire on the effective 

date of any Commission rule under the 

Act that provides relief permitting the 

operation of actively-managed 

exchange-traded funds. 

B. Section 12(d)(1) Relief 

7. The members of an Acquiring 

Fund’s Advisory Group will not control 

(individually or in the aggregate) a Fund 

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

the Act. The members of an Acquiring 

Fund’s Sub-Advisory Group will not 

control (individually or in the aggregate) 

a Fund within the meaning of section 

2(a)(9) of the Act. If, as a result of a 

decrease in the outstanding voting 

securities of a Fund, the Acquiring 

Fund’s Advisory Group or the Acquiring 

Fund’s Sub-Advisory Group, each in the 

aggregate, becomes a holder of more 

than 25 percent of the outstanding 

voting securities of a Fund, it will vote 

its Shares of the Fund in the same 

proportion as the vote of all other 

holders of that Fund’s Shares. This 

condition does not apply to the 

Acquiring Fund’s Sub-Advisory Group 

with respect to a Fund for which the 

Acquiring Fund Sub-Advisor or a 

person controlling, controlled by, or 

under common control with the 

Acquiring Fund Sub-Advisor acts as the 

investment adviser within the meaning 

of section 2(a)(20)(A) of the Act. 

8. No Acquiring Fund or Acquiring 

Fund Affiliate will cause any existing or 

potential investment by the Acquiring 

Fund in a Fund to influence the terms 

of any services or transactions between 

the Acquiring Fund or an Acquiring 

Fund Affiliate and the Fund or a Fund 

Affiliate. 

9. The Board of an Acquiring 

Management Company, including a 

majority of the Independent Trustees, 

will adopt procedures reasonably 

designed to ensure that the Acquiring 

Fund Advisor and any Acquiring Fund 

Sub-Advisor are conducting the 

investment program of the Acquiring 

Management Company without taking 

into account any consideration received 

by the Acquiring Management Company 

or an Acquiring Fund Affiliate from a 

Fund or a Fund Affiliate in connection 

with any services or transactions. 

10. Once an investment by an 

Acquiring Fund in the Shares of a Fund 

exceeds the limits in section 

12(d)(1)(A)(i) of the Act, the Board of 

the Fund, including a majority of the 

Independent Trustees, will determine 

that any consideration paid by the Fund 

to an Acquiring Fund or an Acquiring 

Fund Affiliate in connection with any 

services or transactions: (i) Is fair and 

reasonable in relation to the nature and 

quality of the services and benefits 

received by the Fund; (ii) is within the 

range of consideration that the Fund 

would be required to pay to another 

unaffiliated entity in connection with 

the same services or transactions; and 


rljohnson on DSK3VPTVN1PROD with NOTICES
5840 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

(iii) does not involve overreaching on 

the part of any person concerned. This 

condition does not apply with respect to 

any services or transactions between a 

Fund and its investment adviser(s), or 

any person controlling, controlled by or 

under common control with such 

investment adviser(s). 

11. No Acquiring Fund or Acquiring 

Fund Affiliate (except to the extent it is 

acting in its capacity as an investment 

adviser to a Fund) will cause the Fund 

to purchase a security in any Affiliated 

Underwriting. 

12. The Board of a Fund, including a 

majority of the Independent Trustees, 

will adopt procedures reasonably 

designed to monitor any purchases of 

securities by the Fund in an Affiliated 

Underwriting, once an investment by an 

Acquiring Fund in the securities of the 

Fund exceeds the limit of section 

12(d)(1)(A)(i) of the Act, including any 

purchases made directly from an 

Underwriting Affiliate. The Board of the 

Fund will review these purchases 

periodically, but no less frequently than 

annually, to determine whether the 

purchases were influenced by the 

investment by the Acquiring Fund in 

the Fund. The Board of the Fund will 

consider, among other things: (i) 

Whether the purchases were consistent 

with the investment objectives and 

policies of the Fund; (ii) how the 

performance of securities purchased in 

an Affiliated Underwriting compares to 

the performance of comparable 

securities purchased during a 

comparable period of time in 

underwritings other than Affiliated 

Underwritings or to a benchmark such 

as a comparable market index; and (iii) 

whether the amount of securities 

purchased by the Fund in Affiliated 

Underwritings and the amount 

purchased directly from an 

Underwriting Affiliate have changed 

significantly from prior years. The 

Board of the Fund will take any 

appropriate actions based on its review, 

including, if appropriate, the institution 

of procedures designed to ensure that 

purchases of securities in Affiliated 

Underwritings are in the best interest of 

shareholders of the Fund. 

13. Each Fund will maintain and 

preserve permanently in an easily 

accessible place a written copy of the 

procedures described in the preceding 

condition, and any modifications to 

such procedures, and will maintain and 

preserve for a period of not less than six 

years from the end of the fiscal year in 

which any purchase in an Affiliated 

Underwriting occurred, the first two 

years in an easily accessible place, a 

written record of each purchase of 

securities in Affiliated Underwritings, 

once an investment by an Acquiring 

Fund in the securities of the Fund 

exceeds the limit of section 

12(d)(1)(A)(i) of the Act, setting forth 

from whom the securities were 

acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the determinations of the Board of the 

Fund were made. 

14. Before investing in Shares of a 

Fund in excess of the limits in section 

12(d)(1)(A), each Acquiring Fund and 

the Fund will execute an Acquiring 

Fund Agreement stating, without 

limitation, that their Boards and their 

investment adviser(s), or their Sponsors 

or trustees (‘‘Trustee’’), as applicable, 

understand the terms and conditions of 

the requested order, and agree to fulfill 

their responsibilities under the 

requested order. At the time of its 

investment in Shares of a Fund in 

excess of the limit in section 

12(d)(1)(A)(i), an Acquiring Fund will 

notify the Fund of the investment. At 

such time, the Acquiring Fund will also 

transmit to the Fund a list of the names 

of each Acquiring Fund Affiliate and 

Underwriting Affiliate. The Acquiring 

Fund will notify the Fund of any 

changes to the list of the names as soon 

as reasonably practicable after a change 

occurs. The Fund and the Acquiring 

Fund will maintain and preserve a copy 

of the requested order, the Acquiring 

Fund Agreement, and the list with any 

updated information for the duration of 

the investment and for a period of not 

less than six years thereafter, the first 

two years in an easily accessible place. 

15. The Acquiring Fund Advisor, 

Trustee or Sponsor, as applicable, will 

waive fees otherwise payable to it by the 

Acquiring Fund in an amount at least 

equal to any compensation (including 

fees received pursuant to any plan 

adopted under rule 12b–l under the Act) 

received from the Fund by the 

Acquiring Fund Advisor, Trustee or 

Sponsor, or an affiliated person of the 

Acquiring Fund Advisor, Trustee or 

Sponsor, other than any advisory fees 

paid to the Acquiring Fund Advisor, 

Trustee or Sponsor, or its affiliated 

person by the Fund in connection with 

the investment by the Acquiring Fund 

in the Fund. Any Acquiring Fund SubAdvisor will waive fees otherwise 

payable to the Acquiring Fund SubAdvisor, directly or indirectly, by the 

Acquiring Management Company in an 

amount at least equal to any 

compensation received from a Fund by 

the Acquiring Fund Sub-Advisor, or an 

affiliated person of the Acquiring Fund 

Sub-Advisor, other than any advisory 

fees paid to the Acquiring Fund SubAdvisor or its affiliated person by the 

Fund in connection with any 

investment by the Acquiring 

Management Company in the Fund 

made at the direction of the Acquiring 

Fund Sub-Advisor. In the event that the 

Acquiring Fund Sub-Advisor waives 

fees, the benefit of the waiver will be 

passed through to the Acquiring 

Management Company. 

16. Any sales charges and/or service 

fees charged with respect to shares of an 

Acquiring Fund will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

17. No Fund will acquire securities of 

any other investment company or 

company relying on section 3(c)(1) or 

3(c)(7) of the Act in excess of the limits 

contained in section 12(d)(1)(A) of the 

Act, except to the extent the Fund 

acquires securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting the Fund to acquire 

securities of one or more investment 

companies for short-term cash 

management purposes. 

18. Before approving any advisory 

contract under section 15 of the Act, the 

Board of each Acquiring Management 

Company, including a majority of the 

Independent Trustees, will find that the 

advisory fees charged under such 

advisory contract are based on services 

provided that will be in addition to, 

rather than duplicative of, the services 

provided under the advisory contract(s) 

of any Fund in which the Acquiring 

Management Company may invest. 

These findings and their basis will be 

recorded fully in the minute books of 

the appropriate Acquiring Management 

Company. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02018 Filed 2–2–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31432; File No. 812–14353] 

CSOP ETF Trust and CSOP Asset 

Management Limited; Notice of 

Application 

January 28, 2015 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 


rljohnson on DSK3VPTVN1PROD with NOTICES