Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 5825 

local residence in order to demonstrate 

a proximity assertion of interest in the 

proceeding. With respect to copyrighted 

works, except for limited excerpts that 

serve the purpose of the adjudicatory 

filings and would constitute a Fair Use 

application, participants are requested 

not to include copyrighted materials in 

their submission. 

Detailed information about the license 

renewal process can be found under the 

Nuclear Reactors icon at http://

www.nrc.gov/reactors/operating/

licensing/renewal.html on the NRC’s 

Web site. Copies of the application to 

renew the operating licenses for LSCS, 

Units 1 and 2 are available for public 

inspection at the NRC’s PDR, and at 

http://www.nrc.gov/reactors/operating/

licensing/renewal/applications.html, the 

NRC’s Web site while the application is 

under review. The application may be 

accessed in ADAMS through the NRC 

Library on the Internet at http://

www.nrc.gov/reading-rm/adams.html 

under ADAMS accession no. 

ML14343A849. As stated above, persons 

who do not have access to ADAMS or 

who encounter problems in accessing 

the documents located in ADAMS may 

contact the NRC’s PDR reference staff by 

telephone at 1–800–397–4209 or 301– 

415–4737, or by email to pdr.resources@

nrc.gov. 

The NRC staff has verified that a copy 

of the license renewal application is 

also available to local residents near 

LSCS, Units 1 and 2 at the Reddick 

Public Library District, 1010 Canal St., 

Ottawa, IL 61350; Marseilles Public 

Library, 155 East Bluff St., Marseilles, IL 

61341; and Seneca Public Library 

District, 210 N. Main St., Seneca, IL 

61360. 

Dated at Rockville, Maryland, this 26th day 

of January 2015. 

For the Nuclear Regulatory Commission. 

Christopher G. Miller, 

Director, Division of License Renewal, Office 

of Nuclear Reactor Regulation. 

[FR Doc. 2015–01807 Filed 2–2–15; 8:45 am] 

BILLING CODE 7590–01–P 

NUCLEAR REGULATORY 

COMMISSION 

[NRC–2015–0001] 

Sunshine Act Meeting Notice 

DATE: February 2, 9, 16, 23, March 2, 9, 

2015. 

PLACE: Commissioners’ Conference 

Room, 11555 Rockville Pike, Rockville, 

Maryland. 

STATUS: Public and Closed. 

Week of February 2, 2015 

Monday, February 2, 2015 

1:00 p.m. Discussion of International 

Activities (Closed—Ex. 9) 

Wednesday, February 4, 2015 

8:30 a.m. Hearing on Combined 

License for Fermi, Unit 3 (Public 

Meeting) (Contact: Adrian Muniz, 

301–415–4093) 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov/. 

Week of February 9, 2015—Tentative 

There are no meetings scheduled for 

the week of February 9, 2015. 

Week of February 16, 2015—Tentative 

Wednesday, February 18, 2015 

9:30 a.m. Briefing on NRC 

International Activities (Closed—Ex. 

9) 

Week of February 23, 2015—Tentative 

There are no meetings scheduled for 

the week of February 23, 2015. 

Week of March 2, 2015—Tentative 

Thursday, March 5, 2015 

10:00 a.m. Meeting with Advisory 

Committee on Reactor Safeguards 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov/. 

Week of March 9, 2015—Tentative 

There are no meetings scheduled for 

the week of March 9, 2015. 

* * * * * 

The schedule for Commission 

meetings is subject to change on short 

notice. For more information or to verify 

the status of meetings, contact Glenn 

Ellmers at (301) 415–0442 or via email 

at Glenn.Ellmers@nrc.gov. 

* * * * * 

The NRC Commission Meeting 

Schedule can be found on the Internet 

at: http://www.nrc.gov/public-involve/

public-meetings/schedule.html. 

* * * * * 

The NRC provides reasonable 

accommodation to individuals with 

disabilities where appropriate. If you 

need a reasonable accommodation to 

participate in these public meetings, or 

need this meeting notice or the 

transcript or other information from the 

public meetings in another format (e.g. 

braille, large print), please notify 

Kimberly Meyer, NRC Disability 

Program Manager, at 301–287–0727, by 

videophone at 240–428–3217, or by 

email at Kimberly.Meyer-Chambers@

nrc.gov. Determinations on requests for 

reasonable accommodation will be 

made on a case-by-case basis. 

* * * * * 

Members of the public may request to 

receive this information electronically. 

If you would like to be added to the 

distribution, please contact the Office of 

the Secretary, Washington, DC 20555 

(301–415–1969), or send an email to 

Patricia.Jimenez@nrc.gov or 

Brenda.Akstulewicz@nrc.gov. 

Dated: January 30, 2015. 

Glenn Ellmers, 

Policy Coordinator, Office of the Secretary. 

[FR Doc. 2015–02132 Filed 1–30–15; 11:15 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31433; 812–14398] 

Diamond Hill Capital Management, Inc., 

et al.; 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 

‘‘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, under 

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

exemption from sections 17(a)(1) and 

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

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

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

the Act. 

SUMMARY: Summary of Application: 

Applicants request an order that would 

permit (a) series of certain open-end 

management investment companies to 

issue shares (‘‘Shares’’) redeemable in 

large aggregations only (‘‘Creation 

Units’’); (b) secondary market 

transactions in Shares to occur at 

negotiated market prices rather than at 

net asset value (‘‘NAV’’); (c) certain 

series to pay redemption proceeds, 

under certain circumstances, more than 

seven days after the tender of Shares 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. 

APPLICANTS: Diamond Hill Capital 

Management, Inc. (‘‘Diamond Hill’’), 

ETF Series Solutions (‘‘Trust’’) and 

Quasar Distributors, LLC (‘‘Quasar’’). 


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5826 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

1All existing entities that intend to rely on the 

requested order have been named as applicants. 

Any other existing or future entity that 

subsequently relies on the order will comply with 

the terms and conditions of the order. A Fund of 

Funds (as defined below) may rely on the order 

only to invest in Funds and not in any other 

registered investment company. 

2A ‘‘to-be-announced transaction’’ or ‘‘TBA 

Transaction’’ is a method of trading mortgagebacked securities. In a TBA Transaction, the buyer 

and seller agree upon general trade parameters such 

as agency, settlement date, par amount and price. 

The actual pools delivered generally are determined 

two days prior to settlement date. 

3 Depositary receipts representing foreign 

securities (‘‘Depositary Receipts’’) include 

American Depositary Receipts and Global 

Depositary Receipts. The Funds may invest in 

Depositary Receipts representing foreign securities 

in which they seek to invest. Depositary Receipts 

are typically issued by a financial institution (a 

‘‘depositary bank’’) and evidence ownership 

interests in a security or a pool of securities that 

have been deposited with the depositary bank. 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 person of a Fund, the 

Adviser or any Sub-Adviser will serve as the 

depositary bank for any Depositary Receipts held by 

a Fund. 

4Underlying Indexes that include both long and 

short positions in securities are referred to as 

‘‘Long/Short Indexes.’’ 

FILING DATES: The application was filed 

on December 10, 2014, and amended on 

January 16, 2015. 

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 February 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, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090; 

Applicants: Diamond Hill, 325 John H. 

McConnell Blvd., Suite 200, Columbus, 

Ohio 43215; The Trust and Quasar, 615 

East Michigan Street, 4th Floor, 

Milwaukee, Wisconsin 53202. 

FOR FURTHER INFORMATION CONTACT: 

Steven I. Amchan, Senior Counsel, at 

(202) 551–6826, 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 a Delaware statutory 

trust and is registered under the Act as 

an open-end management investment 

company with multiple series. Each 

series will operate as an exchange 

traded fund (‘‘ETF’’). 

2. Diamond Hill will be the 

investment adviser to the new series of 

the Trust (‘‘Initial Fund’’). Each Adviser 

(as defined below) will be registered as 

an investment adviser under the 

Investment Advisers Act of 1940 

(‘‘Advisers Act’’). The Adviser may 

enter into sub-advisory agreements with 

one or more investment advisers to act 

as sub-advisers to particular Funds 

(each, a ‘‘Sub-Adviser’’). Any SubAdviser will either be registered under 

the Advisers Act or will not be required 

to register thereunder. 

3. The Trust will enter into a 

distribution agreement with one or more 

distributors. Each distributor for a Fund 

will be a broker-dealer (‘‘Broker’’) 

registered under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’) 

and will act as distributor and principal 

underwriter (‘‘Distributor’’) for one or 

more of the Funds. No Distributor will 

be affiliated with any national securities 

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

of the Act (‘‘Exchange’’). The Distributor 

for each Fund will comply with the 

terms and conditions of the requested 

order. Quasar, a Delaware limited 

liability company and broker-dealer 

registered under the Exchange Act, will 

act as the initial Distributor of the 

Funds. 

4. Applicants request that the order 

apply to the Initial Fund and any 

additional series of the Trust, and any 

other open-end management investment 

company or series thereof, that may be 

created in the future (‘‘Future Funds’’ 

and together with the Initial Fund, 

‘‘Funds’’), each of which will operate as 

an ETF and will track a specified index 

comprised of domestic or foreign equity 

and/or fixed income securities (each, an 

‘‘Underlying Index’’). Any Future Fund 

will (a) be advised by Diamond Hill or 

an entity controlling, controlled by, or 

under common control with Diamond 

Hill (each, an ‘‘Adviser’’) and (b) 

comply with the terms and conditions 

of the application.1

5. Each Fund will hold certain 

securities, currencies, other assets, and 

other investment positions (‘‘Portfolio 

Holdings’’) selected to correspond 

generally to the performance of its 

Underlying Index. The Underlying 

Indexes will be comprised solely of 

equity and/or fixed income securities 

issued by one or more of the following 

categories of issuers: (i) Domestic 

issuers and (ii) non-domestic issuers 

meeting the requirements for trading in 

U.S. markets. Other Funds will be based 

on Underlying Indexes that will be 

comprised solely of foreign and 

domestic, or solely foreign, equity and/ 

or fixed income securities (‘‘Foreign 

Funds’’). 

6. Applicants represent that each 

Fund will invest at least 80% of its 

assets (excluding securities lending 

collateral) in the component securities 

of its respective Underlying Index 

(‘‘Component Securities’’) and TBA 

Transactions,2 and in the case of 

Foreign Funds, Component Securities 

and Depositary Receipts 3 representing 

Component Securities. Each Fund may 

also invest up to 20% of its assets in 

certain index futures, options, options 

on index futures, swap contracts or 

other derivatives, as related to its 

respective Underlying Index and its 

Component Securities, cash and cash 

equivalents, other investment 

companies, as well as in securities and 

other instruments not included in its 

Underlying Index but which the Adviser 

believes will help the Fund track its 

Underlying Index. A Fund may also 

engage in short sales in accordance with 

its investment objective. 

7. Each Trust may issue Funds that 

seek to track Underlying Indexes 

constructed using 130/30 investment 

strategies (‘‘130/30 Funds’’) or other 

long/short investment strategies (‘‘Long/ 

Short Funds’’). Each Long/Short Fund 

will establish (i) exposures equal to 

approximately 100% of the long 

positions specified by the Long/Short 

Index 4 and (ii) exposures equal to 

approximately 100% of the short 

positions specified by the Long/Short 

Index. Each 130/30 Fund will include 

strategies that: (i) Establish long 

positions in securities so that total long 

exposure represents approximately 

130% of a Fund’s net assets; and (ii) 

simultaneously establish short positions 

in other securities so that total short 

exposure represents approximately 30% 

of such Fund’s net assets. Each Business 

Day, for each Long/Short Fund and 130/ 

30 Fund, the Adviser will provide full 

portfolio transparency on the Fund’s 

publicly available Web site (‘‘Web site’’) 

by making available the Fund’s Portfolio 


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Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 5827 

5Under accounting procedures followed by each 

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. 

6The licenses for the Self-Indexing Funds will 

specifically state that the Affiliated Index Provider 

(as defined below), or in case of a sub-licensing 

agreement, the Adviser, must provide the use of the 

Affiliated Indexes (as defined below) and related 

intellectual property at no cost to the Trust and the 

Self-Indexing Funds. 

7The Affiliated Indexes may be made available to 

registered investment companies, as well as 

separately managed accounts of institutional 

investors and privately offered funds that are not 

deemed to be ‘‘investment companies’’ in reliance 

on section 3(c)(1) or 3(c)(7) of the Act for which the 

Adviser acts as adviser or subadviser (‘‘Affiliated 

Accounts’’) as well as other such registered 

investment companies, separately managed 

accounts and privately offered funds for which it 

does not act either as adviser or subadviser 

(‘‘Unaffiliated Accounts’’). The Affiliated Accounts 

and the Unaffiliated Accounts, like the Funds, 

would seek to track the performance of one or more 

Underlying Index(es) by investing in the 

constituents of such Underlying Indexes or a 

representative sample of such constituents of the 

Underlying Index. Consistent with the relief 

requested from section 17(a), the Affiliated 

Accounts will not engage in Creation Unit 

transactions with a Fund. 

8See, e.g., Rule 17j–1 under the Act and Section 

204A under the Advisers Act and Rules 204A–1 

and 206(4)–7 under the Advisers Act. 

9The Adviser has also adopted or will adopt a 

code of ethics pursuant to Rule 17j–1 under the Act 

and Rule 204A–1 under the Advisers Act, which 

contains provisions reasonably necessary to prevent 

Access Persons (as defined in Rule 17j–1) from 

engaging in any conduct prohibited in Rule 17j–1 

(‘‘Code of Ethics’’). 

10The instruments and cash that the purchaser is 

required to deliver in exchange for the Creation 

Units it is purchasing are referred to as the 

‘‘Portfolio Deposit.’’ 

11 In the event that an Adviser or Sub-Adviser 

serves as the Affiliated Index Provider for a SelfIndexing Fund, the terms ‘‘Affiliated Index 

Provider’’ or ‘‘Index Provider,’’ with respect to that 

Self-Indexing Fund, will be limited to the 

employees of the applicable Adviser or Sub-Adviser 

Continued 

Holdings (defined below) before the 

commencement of trading of Shares on 

the Listing Exchange (defined below).5

The information provided on the Web 

site will be formatted to be readerfriendly. 

8. A Fund will utilize either a 

replication or representative sampling 

strategy to track its Underlying Index. A 

Fund using a replication strategy will 

invest in the Component Securities of 

its Underlying Index in the same 

approximate proportions as in such 

Underlying Index. A Fund using a 

representative sampling strategy will 

hold some, but not necessarily all of the 

Component Securities of its Underlying 

Index. Applicants state that a Fund 

using a representative sampling strategy 

will not be expected to track the 

performance of its Underlying Index 

with the same degree of accuracy as 

would an investment vehicle that 

invested in every Component Security 

of the Underlying Index with the same 

weighting as the Underlying Index. 

Applicants expect that each Fund will 

have an annual tracking error relative to 

the performance of its Underlying Index 

of less than 5%. 

9. Each Fund will be entitled to use 

its Underlying Index pursuant to either 

a licensing agreement with the entity 

that compiles, creates, sponsors or 

maintains the Underlying Index (each, 

an ‘‘Index Provider’’) or a sub-licensing 

arrangement with the Adviser, which 

will have a licensing agreement with 

such Index Provider.6 A ‘‘Self-Indexing 

Fund’’ is a Fund for which an affiliated 

person, as defined in section 2(a)(3) of 

the Act (‘‘Affiliated Person’’), or an 

affiliated person of an Affiliated Person 

(‘‘Second-Tier Affiliate’’), of the Trust or 

a Fund, of the Adviser, of any SubAdviser to or promoter of a Fund, or of 

the Distributor (each, an ‘‘Affiliated 

Index Provider’’) will serve as the Index 

Provider. In the case of Self-Indexing 

Funds, an Affiliated Index Provider will 

create a proprietary, rules-based 

methodology to create Underlying 

Indexes (each an ‘‘Affiliated 

Index’’).7 Except with respect to the 

Self-Indexing Funds, no Index Provider 

is or will be an Affiliated Person, or a 

Second-Tier Affiliate, of a Trust or a 

Fund, of the Adviser, of any SubAdviser to or promoter of a Fund, or of 

the Distributor. 

10. Applicants recognize that SelfIndexing Funds could raise concerns 

regarding the ability of the Affiliated 

Index Provider to manipulate the 

Underlying Index to the benefit or 

detriment of the Self-Indexing Fund. 

Applicants further recognize the 

potential for conflicts that may arise 

with respect to the personal trading 

activity of personnel of the Affiliated 

Index Provider who have knowledge of 

changes to an Underlying Index prior to 

the time that information is publicly 

disseminated. 

11. Applicants propose that each SelfIndexing Fund will post on its Web site, 

on each day the Fund is open, including 

any day when it satisfies redemption 

requests as required by Section 22(e) of 

the Act (a ‘‘Business Day’’), before 

commencement of trading of Shares on 

the Listing Exchange, the identities and 

quantities of the Portfolio Holdings that 

will form the basis for the Fund’s 

calculation of its NAV at the end of the 

Business Day. Applicants believe that 

requiring Self-Indexing Funds to 

maintain full portfolio transparency will 

also provide an additional mechanism 

for addressing any such potential 

conflicts of interest. 

12. In addition, Applicants do not 

believe the potential for conflicts of 

interest raised by the Adviser’s use of 

the Underlying Indexes in connection 

with the management of the Self 

Indexing Funds and the Affiliated 

Accounts will be substantially different 

from the potential conflicts presented by 

an adviser managing two or more 

registered funds. Both the Act and the 

Advisers Act contain various 

protections to address conflicts of 

interest where an adviser is managing 

two or more registered funds and these 

protections will also help address these 

conflicts with respect to the SelfIndexing Funds.8

13. Each Adviser and any SubAdviser has adopted or will adopt, 

pursuant to Rule 206(4)–7 under the 

Advisers Act, written policies and 

procedures designed to prevent 

violations of the Advisers Act and the 

rules thereunder. These include policies 

and procedures designed to minimize 

potential conflicts of interest among the 

Self-Indexing Funds and the Affiliated 

Accounts, such as cross trading policies, 

as well as those designed to ensure the 

equitable allocation of portfolio 

transactions and brokerage 

commissions. In addition, Diamond Hill 

will adopt policies and procedures as 

required under section 204A of the 

Advisers Act, which are reasonably 

designed in light of the nature of its 

business to prevent the misuse, in 

violation of the Advisers Act or the 

Exchange Act or the rules thereunder, of 

material non-public information by the 

ETS Securities or an associated person 

(‘‘Inside Information Policy’’). Any other 

Adviser or Sub-Adviser will be required 

to adopt and maintain a similar Inside 

Information Policy. In accordance with 

the Code of Ethics 9 and Inside 

Information Policy of the Adviser and 

any Sub-Adviser, personnel of those 

entities with knowledge about the 

composition of the Portfolio Deposit 10

will be prohibited from disclosing such 

information to any other person, except 

as authorized in the course of their 

employment, until such information is 

made public. In addition, an Index 

Provider will not provide any 

information relating to changes to an 

Underlying Index’s methodology for the 

inclusion of component securities, the 

inclusion or exclusion of specific 

component securities, or methodology 

for the calculation or the return of 

component securities, in advance of a 

public announcement of such changes 

by the Index Provider.11 The Adviser 


rljohnson on DSK3VPTVN1PROD with NOTICES
5828 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

that are responsible for creating, compiling and 

maintaining the relevant Underlying Index. 

12See, e.g., Emerging Global Advisors, LLC, et al., 

Investment Company Act Release Nos. 30910 

(February 10, 2014) (notice) and 30975 (March 7, 

2014) (order); VTL Associates, LLC, et al., 

Investment Company Act Release Nos. 30815 

(December 2, 2013) (notice) and 30849 (December 

30, 2013) (order); Horizons ETFs Management 

(USA) LLC and Horizons ETF Trust, Investment 

Company Act Release Nos. 30803 (November 21, 

2013) (notice) and 30833 (December 17, 2013) 

(order). 

13The 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. 

14The portfolio used for this purpose will be the 

same portfolio used to calculate the Fund’s NAV for 

the Business Day. 

15A tradeable round lot for a security will be the 

standard unit of trading in that particular type of 

security in its primary market. 

16This 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. 

17Because these instruments will be excluded 

from the Deposit Instruments and the Redemption 

Instruments, their value will be reflected in the 

determination of the Cash Amount (as defined 

below). 

18A Fund may only use sampling for this purpose 

if the sample: (i) Is designed to generate 

performance that is highly correlated to the 

performance of the Fund’s portfolio; (ii) consists 

entirely of instruments that are already included in 

the Fund’s portfolio; and (iii) is the same for all 

Authorized Participants on a given Business Day. 

19 In determining whether a particular Fund will 

sell or redeem Creation Units entirely on a cash or 

in-kind basis (whether for a given day or a given 

order), the key consideration will be the benefit that 

would accrue to the Fund and its investors. For 

instance, in bond transactions, the Adviser may be 

able to obtain better execution than Share 

purchasers because of the Adviser’s size, experience 

and potentially stronger relationships in the fixed 

income markets. Purchases of Creation Units either 

on an all cash basis or in-kind are expected to be 

neutral to the Funds from a tax perspective. In 

contrast, cash redemptions typically require selling 

portfolio holdings, which may result in adverse tax 

consequences for the remaining Fund shareholders 

that would not occur with an in-kind redemption. 

As a result, tax consideration may warrant in-kind 

redemptions. 

20A ‘‘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). 

will also include under Item 10.C of Part 

2 of its Form ADV a discussion of its 

relationship to any Affiliated Index 

Provider and any material conflicts of 

interest resulting therefrom, regardless 

of whether the Affiliated Index Provider 

is a type of affiliate specified in Item 10. 

14. To the extent the Self-Indexing 

Funds transact with an Affiliated Person 

of the Adviser or Sub-Adviser, such 

transactions will comply with the Act, 

the rules thereunder and the terms and 

conditions of the requested order. In 

this regard, each Self-Indexing Fund’s 

board of directors or trustees (‘‘Board’’) 

will periodically review the SelfIndexing Fund’s use of an Affiliated 

Index Provider. Subject to the approval 

of the Self-Indexing Fund’s Board, the 

Adviser, Affiliated Persons of the 

Adviser (‘‘Adviser Affiliates’’) and 

Affiliated Persons of any Sub-Adviser 

(‘‘Sub-Adviser Affiliates’’) may be 

authorized to provide custody, fund 

accounting and administration and 

transfer agency services to the SelfIndexing Funds. Any services provided 

by the Adviser, Adviser Affiliates, SubAdviser and Sub-Adviser Affiliates will 

be performed in accordance with the 

provisions of the Act, the rules under 

the Act and any relevant guidelines 

from the staff of the Commission. 

Applications for prior orders granted to 

Self-Indexing Funds have received relief 

to operate such funds on the basis 

discussed above.12

15. The Shares of each Fund 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’’).13 On any given Business 

Day, 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, unless the Fund is 

Rebalancing (as defined below). In 

addition, the Deposit Instruments and 

the Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) 14 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; 15 (c) TBA 

Transactions, short positions, 

derivatives and other positions that 

cannot be transferred in kind 16 will be 

excluded from the Deposit Instruments 

and the Redemption Instruments; 17(d) 

to the extent the Fund determines, on a 

given Business Day, to use a 

representative sampling of the Fund’s 

portfolio; 18 or (e) for temporary periods, 

to effect changes in the Fund’s portfolio 

as a result of the rebalancing of its 

Underlying Index (any such change, a 

‘‘Rebalancing’’). If there is a difference 

between the NAV attributable to a 

Creation Unit and the aggregate market 

value of the Deposit Instruments or 

Redemption Instruments 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 ‘‘Cash 

Amount’’). 

16. 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 Cash Amount; (b) if, on a given 

Business Day, the 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, the Fund determines to 

require the purchase or redemption, as 

applicable, to be made entirely in 

cash; 19 (d) if, on a given Business Day, 

the 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 or DTC (defined below); or (ii) 

in the case of Foreign Funds holding 

non-U.S. investments, such instruments 

are not eligible for trading due to local 

trading restrictions, local restrictions on 

securities transfers or other similar 

circumstances; or (e) if the 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 Foreign Fund 

holding non-U.S. investments would be 

subject to unfavorable income tax 

treatment if the holder receives 

redemption proceeds in kind.20

17. Creation Units will consist of 

specified large aggregations of Shares 

(e.g., 25,000 Shares) as determined by 

the Adviser, and it is expected that the 

initial price of a Creation Unit will 

range from $1 million to $10 million. 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 5829 

21Where a Fund permits an in-kind purchaser to 

substitute cash-in-lieu of depositing one or more of 

the requisite Deposit Instruments, the purchaser 

may be assessed a higher Transaction Fee to cover 

the cost of purchasing such Deposit Instruments. 22Shares will be registered in book-entry form 

only. DTC or its nominee will be the record or 

registered owner of all outstanding Shares. 

Beneficial ownership of Shares will be shown on 

the records of DTC or the DTC Participants. 

All orders to purchase Creation Units 

must be placed with the Distributor by 

or through an ‘‘Authorized Participant’’ 

which is either (1) a ‘‘Participating 

Party,’’ i.e., a Broker or other participant 

in the Continuous Net Settlement 

System of the NSCC, a clearing agency 

registered with the Commission, or (2) 

a participant in The Depository Trust 

Company (‘‘DTC’’) (‘‘DTC Participant’’), 

which, in either case, has signed a 

participant agreement with the 

Distributor. The Distributor will be 

responsible for transmitting the orders 

to the Funds and will furnish to those 

placing such orders confirmation that 

the orders have been accepted, but 

applicants state that the Distributor may 

reject any order which is not submitted 

in proper form. 

18. Each Business Day, before the 

open of trading on the Exchange on 

which Shares are primarily listed 

(‘‘Listing Exchange’’), each Fund will 

cause to be published through the NSCC 

the names and quantities of the 

instruments comprising the Deposit 

Instruments and the Redemption 

Instruments, as well as the estimated 

Cash Amount (if any), for that day. The 

list of Deposit Instruments and 

Redemption Instruments will apply 

until a new list is announced on the 

following Business Day, and there will 

be no intra-day changes to the list 

except to correct errors in the published 

list. Each Listing Exchange will 

disseminate, every 15 seconds during 

regular Exchange trading hours, through 

the facilities of the Consolidated Tape 

Association, an amount for each Fund 

stated on a per individual Share basis 

representing the sum of (i) the estimated 

Cash Amount and (ii) the current value 

of the Deposit Instruments. 

19. Transaction expenses, including 

operational processing and brokerage 

costs, will be incurred by a Fund when 

investors purchase or redeem Creation 

Units in-kind and such costs have the 

potential to dilute the interests of the 

Fund’s existing shareholders. Each 

Fund will impose purchase or 

redemption transaction fees 

(‘‘Transaction Fees’’) in connection with 

effecting such purchases or redemptions 

of Creation Units. In all cases, such 

Transaction Fees will be limited in 

accordance with requirements of the 

Commission applicable to management 

investment companies offering 

redeemable securities. Since the 

Transaction Fees are intended to defray 

the transaction expenses as well as to 

prevent possible shareholder dilution 

resulting from the purchase or 

redemption of Creation Units, the 

Transaction Fees will be borne only by 

such purchasers or redeemers.21 The 

Distributor will be responsible for 

delivering the Fund’s prospectus to 

those persons acquiring Shares in 

Creation Units and for maintaining 

records of both the orders placed with 

it and the confirmations of acceptance 

furnished by it. In addition, the 

Distributor will maintain a record of the 

instructions given to the applicable 

Fund to implement the delivery of its 

Shares. 

20. Shares of each Fund will be listed 

and traded individually on an 

Exchange. It is expected that one or 

more member firms of an Exchange will 

be designated to act as a market maker 

(each, a ‘‘Market Maker’’) and maintain 

a market for Shares trading on the 

Exchange. Prices of Shares trading on an 

Exchange will be based on the current 

bid/offer market. Transactions involving 

the sale of Shares on an Exchange will 

be subject to customary brokerage 

commissions and charges. 

21. Applicants expect that purchasers 

of Creation Units will include 

institutional investors and arbitrageurs. 

Market Makers, acting in their roles to 

provide a fair and orderly secondary 

market for the Shares, may from time to 

time find it appropriate to purchase or 

redeem Creation Units. Applicants 

expect that secondary market 

purchasers of Shares will include both 

institutional and retail investors.22 The 

price at which Shares trade will be 

disciplined by arbitrage opportunities 

created by the option continually to 

purchase or redeem Shares in Creation 

Units, which should help prevent 

Shares from trading at a material 

discount or premium in relation to their 

NAV. 

22. Shares will not be individually 

redeemable, and owners of Shares may 

acquire those Shares from the 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 through an Authorized 

Participant. A redeeming investor may 

pay a Transaction Fee, calculated in the 

same manner as a Transaction Fee 

payable in connection with purchases of 

Creation Units. 

23. Neither the Trust nor any Fund 

will be advertised or marketed or 

otherwise held out as a traditional openend investment company or a ‘‘mutual 

fund.’’ Instead, each such Fund will be 

marketed as an ‘‘ETF.’’ All marketing 

materials that describe the features or 

method of obtaining, buying or selling 

Creation Units, or Shares traded on an 

Exchange, or refer to redeemability, will 

prominently disclose that Shares are not 

individually redeemable and will 

disclose that the owners of Shares may 

acquire those Shares from the Fund or 

tender such Shares for redemption to 

the Fund in Creation Units only. The 

Funds will provide copies of their 

annual and semi-annual shareholder 

reports to DTC Participants for 

distribution to beneficial owners of 

Shares. 

Applicants’ Legal Analysis 

1. Applicants request an order under 

section 6(c) of 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, under section 12(d)(1)(J) of the 

Act for an exemption from sections 

12(d)(1)(A) and (B) of the Act, and 

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

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

and 17(a)(2) 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 

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 provisions 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. 


rljohnson on DSK3VPTVN1PROD with NOTICES
5830 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

23Applicants acknowledge that no relief obtained 

from the requirements of section 22(e) will affect 

any obligations Applicants may otherwise have 

under rule 15c6–1 under the Exchange Act 

requiring that most securities transactions be settled 

within three business days of the trade date. 

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 owner, 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 Funds to register as open-end 

management investment companies and 

issue Shares that are redeemable in 

Creation Units only. Applicants state 

that investors may purchase Shares in 

Creation Units and redeem Creation 

Units from each Fund. Applicants 

further state that because Creation Units 

may always be purchased and redeemed 

at NAV, the price of Shares on the 

secondary market should not vary 

materially from 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 an 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 

a Fund’s 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 assert that the concerns 

sought to be addressed by section 22(d) 

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

with respect to pricing are equally 

satisfied by the proposed method of 

pricing Shares. Applicants maintain 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 to (a) prevent 

dilution caused by certain risklesstrading schemes by principal 

underwriters and contract dealers, (b) 

prevent unjust discrimination or 

preferential treatment among buyers, 

and (c) ensure an orderly distribution of 

investment company shares by 

eliminating price competition from 

dealers offering shares at less than the 

published sales price and repurchasing 

shares at more than the published 

redemption price. 

6. Applicants believe that none of 

these purposes will be thwarted by 

permitting Shares to trade in the 

secondary market at negotiated prices. 

Applicants state that (a) secondary 

market trading in Shares does not 

involve a Fund as a party and will not 

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 third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in Shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

contend that the price at which Shares 

trade will be disciplined by arbitrage 

opportunities created by the option 

continually to purchase or redeem 

Shares in Creation Units, which should 

help prevent Shares from trading at a 

material discount or premium in 

relation to their NAV. 

Section 22(e) 

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 

state that settlement of redemptions for 

Foreign Funds will be contingent not 

only on the settlement cycle of the 

United States market, but also on 

current delivery cycles in local markets 

for underlying foreign securities held by 

a Foreign Fund. Applicants state that 

the delivery cycles currently practicable 

for transferring Redemption Instruments 

to redeeming investors, coupled with 

local market holiday schedules, may 

require a delivery process of up to 

fourteen (14) calendar days. 

Accordingly, with respect to Foreign 

Funds only, applicants hereby request 

relief under section 6(c) from the 

requirement imposed by section 22(e) to 

allow Foreign Funds to pay redemption 

proceeds within fourteen calendar days 

following the tender of Creation Units 

for redemption.23

8. Applicants believe that Congress 

adopted section 22(e) to prevent 

unreasonable, undisclosed or 

unforeseen delays in the actual payment 

of redemption proceeds. Applicants 

propose that allowing redemption 

payments for Creation Units of a Foreign 

Fund to be made within fourteen 

calendar days would not be inconsistent 

with the spirit and intent of section 

22(e). Applicants suggest that a 

redemption payment occurring within 

fourteen calendar days following a 

redemption request would adequately 

afford investor protection. 

9. Applicants are not seeking relief 

from section 22(e) with respect to 

Foreign Funds that do not effect 

creations and redemptions of Creation 

Units in-kind. 

Section 12(d)(1) 

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

prohibits a registered investment 

company from acquiring securities of an 

investment company if such 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 and any other broker-dealer 

from knowingly selling the investment 

company’s 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. 

11. Applicants request an exemption 

to permit registered management 

investment companies and unit 

investment trusts (‘‘UITs’’) that are not 

advised or sponsored by the Adviser, 

and not part of the same ‘‘group of 

investment companies,’’ as defined in 

section 12(d)(1)(G)(ii) of the Act as the 

Funds (such management investment 

companies are referred to as ‘‘Investing 

Management Companies,’’ such UITs 

are referred to as ‘‘Investing Trusts,’’ 

and Investing Management Companies 

and Investing Trusts are collectively 

referred to as ‘‘Funds of Funds’’), to 

acquire Shares beyond the limits of 

section 12(d)(1)(A) of the Act; and the 

Funds, and any principal underwriter 

for the Funds, and/or any Broker 

registered under the Exchange Act, to 

sell Shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. 

12. Each Investing Management 

Company will be advised by an 

investment adviser within the meaning 

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

‘‘Fund of Funds Adviser’’) and may be 

sub-advised by investment advisers 

within the meaning of section 

2(a)(20)(B) of the Act (each, a ‘‘Fund of 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 5831 

24A ‘‘Fund of Funds Affiliate’’ is a Fund of Funds 

Adviser, Fund of Funds Sub-Adviser, Sponsor, 

promoter, and principal underwriter of a Fund of 

Funds, and any person controlling, controlled by, 

or under common control with any of those entities. 

A ‘‘Fund Affiliate’’ is an investment adviser, 

promoter, or principal underwriter of a Fund and 

any person controlling, controlled by or under 

common control with any of these entities. 

25Any references to NASD Conduct Rule 2830 

include any successor or replacement FINRA rule 

to NASD Conduct Rule 2830. 

Funds Sub-Adviser’’). Any investment 

adviser to an Investing Management 

Company will be registered under the 

Advisers Act. Each Investing Trust will 

be sponsored by a sponsor (‘‘Sponsor’’). 

13. Applicants submit that the 

proposed conditions to the requested 

relief adequately address the concerns 

underlying the limits in sections 

12(d)(1)(A) and (B), which include 

concerns about undue influence by a 

fund of funds over underlying funds, 

excessive layering of fees and overly 

complex fund structures. Applicants 

believe that the requested exemption is 

consistent with the public interest and 

the protection of investors. 

14. Applicants believe that neither a 

Fund of Funds nor a Fund of Funds 

Affiliate would be able to exert undue 

influence over a Fund.24 To limit the 

control that a Fund of Funds may have 

over a Fund, applicants propose a 

condition prohibiting a Fund of Funds 

Adviser or Sponsor, any person 

controlling, controlled by, or under 

common control with a Fund of Funds 

Adviser or Sponsor, and any investment 

company and any 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 a Fund of 

Funds Adviser or Sponsor, or any 

person controlling, controlled by, or 

under common control with a Fund of 

Funds Adviser or Sponsor (‘‘Fund of 

Funds 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 Fund of 

Funds Sub-Adviser, any person 

controlling, controlled by or under 

common control with the Fund of 

Funds Sub-Adviser, 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 Fund of 

Funds Sub-Adviser or any person 

controlling, controlled by or under 

common control with the Fund of 

Funds Sub-Adviser (‘‘Fund of Funds 

Sub-Advisory Group’’). 

15. Applicants propose other 

conditions to limit the potential for 

undue influence over the Funds, 

including that no Fund of Funds or 

Fund of Funds Affiliate (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, 

Fund of Funds Adviser, Fund of Funds 

Sub-Adviser, employee or Sponsor of 

the Fund of Funds, or a person of which 

any such officer, director, member of an 

advisory board, Fund of Funds Adviser 

or Fund of Funds Sub-Adviser, 

employee or Sponsor is an affiliated 

person (except that any person whose 

relationship to the Fund is covered by 

section 10(f) of the Act is not an 

Underwriting Affiliate). 

16. Applicants do not believe that the 

proposed arrangement will involve 

excessive layering of fees. The board of 

directors or trustees of any Investing 

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 

(‘‘disinterested directors or trustees’’), 

will 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 Investing 

Management Company may invest. In 

addition, under condition B.5., a Fund 

of Funds Adviser, or a Fund of Funds’ 

trustee or Sponsor, as applicable, will 

waive fees otherwise payable to it by the 

Fund of Funds in an amount at least 

equal to any compensation (including 

fees received pursuant to any plan 

adopted by a Fund under rule 12b–1 

under the Act) received from a Fund by 

the Fund of Funds Adviser, trustee or 

Sponsor or an affiliated person of the 

Fund of Funds Adviser, trustee or 

Sponsor, other than any advisory fees 

paid to the Fund of Funds Adviser, 

trustee or Sponsor or its affiliated 

person by a Fund, in connection with 

the investment by the Fund of Funds in 

the Fund. Applicants state that 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 2830.25

17. Applicants submit that the 

proposed arrangement will not create an 

overly complex fund structure. 

Applicants note that no Fund will 

acquire 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. To ensure a 

Fund of Funds is aware of the terms and 

conditions of the requested order, the 

Fund of Funds will enter into an 

agreement with the Fund (‘‘FOF 

Participation Agreement’’). The FOF 

Participation Agreement will include an 

acknowledgement from the Fund of 

Funds that it may rely on the order only 

to invest in the Funds and not in any 

other investment company. 

18. Applicants also note that a Fund 

may choose to reject a direct purchase 

of Shares in Creation Units by a Fund 

of Funds. To the extent that a Fund of 

Funds purchases Shares in the 

secondary market, a Fund would still 

retain its ability to reject any initial 

investment by a Fund of Funds in 

excess of the limits of section 

12(d)(1)(A) by declining to enter into a 

FOF Participation Agreement with the 

Fund of Funds. 

Sections 17(a)(1) and (2) of the Act 

19. Sections 17(a)(1) and (2) of the Act 

generally prohibit an affiliated person of 

a registered investment company, or an 

affiliated person of such a person, from 

selling any security to or purchasing any 

security from the company. Section 

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

person’’ of another person to include (a) 

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, (b) any person 5% or more 

of whose outstanding voting securities 

are directly or indirectly owned, 

controlled or held with the power to 

vote by the other person, and (c) 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 a 

company, and provides that a control 

relationship will be presumed where 

one person owns more than 25% of a 

company’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 


rljohnson on DSK3VPTVN1PROD with NOTICES
5832 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 

26Although applicants believe that most Funds of 

Funds will purchase Shares in the secondary 

market and will not purchase Creation Units 

directly from a Fund, a Fund of Funds might seek 

to transact in Creation Units directly with a Fund 

that is an affiliated person of a Fund of Funds. To 

the extent that purchases and sales of Shares occur 

in the secondary market and not through principal 

transactions directly between a Fund of Funds 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 a Fund of Funds and redemptions of 

those Shares. 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 a Fund of Funds because 

an Adviser or an entity controlling, controlled by 

or under common control with an Adviser provides 

investment advisory services to that Fund of Funds. 

27Applicants acknowledge that the receipt of 

compensation by (a) an affiliated person of a Fund 

of Funds, or an affiliated person of such person, for 

the purchase by the Fund of Funds 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 a Fund of Funds, may be 

prohibited by Section 17(e)(1) of the Act. The FOF 

Participation Agreement also will include this 

acknowledgment. 

registered investment company (or 

series thereof) advised by an Adviser or 

an entity controlling, controlled by or 

under common control with an Adviser 

(an ‘‘Affiliated Fund’’). Any investor, 

including Market Makers, owning 5% or 

holding in excess of 25% of the Trust or 

such Funds, may be deemed affiliated 

persons of the Trust or such Funds. In 

addition, an investor could own 5% or 

more, or in excess of 25% of the 

outstanding shares of one or more 

Affiliated Funds making that investor a 

Second-Tier Affiliate of the Funds. 

20. Applicants request an exemption 

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

Act pursuant to sections 6(c) and 17(b) 

of the Act to permit persons that are 

Affiliated Persons of the Funds, or 

Second-Tier Affiliates of the Funds, 

solely by virtue of one or more of the 

following: (a) Holding 5% or more, or in 

excess of 25%, of the outstanding 

Shares of one or more Funds; (b) 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, to effectuate purchases 

and redemptions ‘‘in-kind.’’ 

21. Applicants assert that no useful 

purpose would be served by prohibiting 

such affiliated persons from making ‘‘inkind’’ 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 of 

Creation Units will be effected in 

exactly the same manner for all 

purchases and redemptions, regardless 

of size or number. There will be no 

discrimination between purchasers or 

redeemers. Deposit Instruments and 

Redemption Instruments for each Fund 

will be valued in the identical manner 

as those Portfolio Holdings currently 

held by such Fund 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 self-dealing or overreaching, 

but rather assert that such procedures 

will be implemented consistently with 

each Fund’s objectives and with the 

general purposes of the Act. Applicants 

believe that ‘‘in-kind’’ purchases and 

redemptions will be made on terms 

reasonable to Applicants and any 

affiliated persons because they will be 

valued pursuant to verifiable objective 

standards. The method of valuing 

Portfolio Holdings held by a Fund is 

identical to that used for calculating 

‘‘in-kind’’ purchase or redemption 

values and therefore creates no 

opportunity for affiliated persons or 

Second-Tier Affiliates of applicants to 

effect a transaction detrimental to the 

other holders of Shares of that Fund. 

Similarly, applicants submit that, by 

using the same standards for valuing 

Portfolio Holdings held by a Fund as are 

used for calculating ‘‘in-kind’’ 

redemptions or purchases, the Fund 

will ensure that its NAV will not be 

adversely affected by such securities 

transactions. Applicants also note that 

the ability to take deposits and make 

redemptions ‘‘in-kind’’ will help each 

Fund to track closely its Underlying 

Index and therefore aid in achieving the 

Fund’s objectives. 

22. Applicants also seek relief under 

sections 6(c) and 17(b) from section 

17(a) to permit a Fund that is an 

affiliated person, or an affiliated person 

of an affiliated person, of a Fund of 

Funds to sell its Shares to and redeem 

its Shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.26

Applicants state that the terms of the 

transactions are fair and reasonable and 

do not involve overreaching. Applicants 

note that any consideration paid by a 

Fund of Funds for the purchase or 

redemption of Shares directly from a 

Fund will be based on the NAV of the 

Fund.27 Applicants believe that any 

proposed transactions directly between 

the Funds and Funds of Funds will be 

consistent with the policies of each 

Fund of Funds. The purchase of 

Creation Units by a Fund of Funds 

directly from a Fund will be 

accomplished in accordance with the 

investment restrictions of any such 

Fund of Funds and will be consistent 

with the investment policies set forth in 

the Fund of Funds’ registration 

statement. Applicants also state that the 

proposed transactions are consistent 

with the general purposes of the Act and 

are appropriate in the public interest. 

Applicants’ Conditions 

Applicants agree that any order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

A. ETF Relief 

1. 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 index-based ETFs. 

2. As long as a Fund operates in 

reliance on the requested order, the 

Shares of such Fund will be listed on an 

Exchange. 

3. Neither the Trust nor any Fund will 

be advertised or marketed as an openend investment company or a mutual 

fund. Any advertising material that 

describes the purchase or sale of 

Creation Units or refers to redeemability 

will prominently disclose that Shares 

are not individually redeemable and 

that owners of Shares may acquire those 

Shares from the Fund and tender those 

Shares for redemption to a Fund in 

Creation Units only. 

4. 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 midpoint 

of the bid/ask spread at the time of the 

calculation of such NAV (‘‘Bid/Ask 

Price’’), and a calculation of the 

premium or discount of the market 

closing price or Bid/Ask Price against 

such NAV. 

5. Each Self-Indexing Fund, Long/

Short Fund and 130/30 Fund will post 

on the Web site on each Business Day, 

before commencement of trading of 

Shares on the Exchange, the Fund’s 

Portfolio Holdings. 

6. No Adviser or any Sub-Adviser to 

a Self-Indexing Fund, directly or 

indirectly, will cause any Authorized 

Participant (or any investor on whose 

behalf an Authorized Participant may 

transact with the Self-Indexing Fund) to 

acquire any Deposit Instrument for the 

Self-Indexing Fund through a 

transaction in which the Self-Indexing 

Fund could not engage directly. 

B. Section 12(d)(1) Relief 

1. The members of a Fund of Funds’ 

Advisory Group will not control 

(individually or in the aggregate) a Fund 

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


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Notices 5833 

the Act. The members of a Fund of 

Funds’ 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 Fund of Funds’ 

Advisory Group or the Fund of Funds’ 

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 the Fund’s Shares. This 

condition does not apply to the Fund of 

Funds’ Sub-Advisory Group with 

respect to a Fund for which the Fund of 

Funds’ Sub-Adviser or a person 

controlling, controlled by or under 

common control with the Fund of 

Funds’ Sub-Adviser acts as the 

investment adviser within the meaning 

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

2. No Fund of Funds or Fund of 

Funds Affiliate will cause any existing 

or potential investment by the Fund of 

Funds in a Fund to influence the terms 

of any services or transactions between 

the Fund of Funds or Fund of Funds 

Affiliate and the Fund or a Fund 

Affiliate. 

3. The board of directors or trustees of 

an Investing Management Company, 

including a majority of the disinterested 

directors or trustees, will adopt 

procedures reasonably designed to 

ensure that the Fund of Funds Adviser 

and Fund of Funds Sub-Adviser are 

conducting the investment program of 

the Investing Management Company 

without taking into account any 

consideration received by the Investing 

Management Company or a Fund of 

Funds Affiliate from a Fund or Fund 

Affiliate in connection with any services 

or transactions. 

4. Once an investment by a Fund of 

Funds in the securities 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 

directors or trustees who are not 

‘‘interested persons’’ within the 

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

(‘‘non-interested Board members’’), will 

determine that any consideration paid 

by the Fund to the Fund of Funds or a 

Fund of Funds 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 (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). 

5. The Fund of Funds Adviser, or 

trustee or Sponsor of an Investing Trust, 

as applicable, will waive fees otherwise 

payable to it by the Fund of Funds in 

an amount at least equal to any 

compensation (including fees received 

pursuant to any plan adopted by a Fund 

under rule 12b–1 under the Act) 

received from a Fund by the Fund of 

Funds Adviser, or trustee or Sponsor of 

the Investing Trust, or an affiliated 

person of the Fund of Funds Adviser, or 

trustee or Sponsor of the Investing 

Trust, other than any advisory fees paid 

to the Fund of Funds Adviser, or trustee 

or Sponsor of an Investing Trust, or its 

affiliated person by the Fund, in 

connection with the investment by the 

Fund of Funds in the Fund. Any Fund 

of Funds Sub-Adviser will waive fees 

otherwise payable to the Fund of Funds 

Sub-Adviser, directly or indirectly, by 

the Investing Management Company in 

an amount at least equal to any 

compensation received from a Fund by 

the Fund of Funds Sub-Adviser, or an 

affiliated person of the Fund of Funds 

Sub-Adviser, other than any advisory 

fees paid to the Fund of Funds SubAdviser or its affiliated person by the 

Fund, in connection with the 

investment by the Investing 

Management Company in the Fund 

made at the direction of the Fund of 

Funds Sub-Adviser. In the event that the 

Fund of Funds Sub-Adviser waives fees, 

the benefit of the waiver will be passed 

through to the Investing Management 

Company. 

6. No Fund of Funds or Fund of 

Funds Affiliate (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 any Affiliated 

Underwriting. 

7. The Board of a Fund, including a 

majority of the non-interested Board 

members, will adopt procedures 

reasonably designed to monitor any 

purchases of securities by the Fund in 

an Affiliated Underwriting, once an 

investment by a Fund of Funds 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 will review these purchases 

periodically, but no less frequently than 

annually, to determine whether the 

purchases were influenced by the 

investment by the Fund of Funds in the 

Fund. The Board 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 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. 

8. 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 a Fund of Funds 

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 Board’s determinations were made. 

9. Before investing in a Fund in 

excess of the limit in section 

12(d)(1)(A), a Fund of Funds and the 

applicable Trust will execute a FOF 

Participation Agreement stating, 

without limitation, that their respective 

boards of directors or trustees and their 

investment advisers, or trustee and 

Sponsor, as applicable, understand the 

terms and conditions of the order, and 

agree to fulfill their responsibilities 

under the order. At the time of its 

investment in Shares of a Fund in 

excess of the limit in section 

12(d)(1)(A)(i), a Fund of Funds will 

notify the Fund of the investment. At 

such time, the Fund of Funds will also 

transmit to the Fund a list of the names 

of each Fund of Funds Affiliate and 

Underwriting Affiliate. The Fund of 

Funds 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 Fund of 


rljohnson on DSK3VPTVN1PROD with NOTICES
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


rljohnson on DSK3VPTVN1PROD with NOTICES