6780 Federal Register / Vol. 80, No. 25 / Friday, February 6, 2015 / Notices 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service ® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on January 30, 

2015, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 111 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2015–30, 

CP2015–39. 

Stanley F. Mires, 

Attorney, Federal Requirements. 

[FR Doc. 2015–02363 Filed 2–5–15; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail 

Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Effective date: February 6, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on January 30, 

2015, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 106 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2015–25, 

CP2015–34. 

Stanley F. Mires, 

Attorney, Federal Requirements. 

[FR Doc. 2015–02356 Filed 2–5–15; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail 

Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Effective date: February 6, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on January 30, 

2015, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 110 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2015–29, 

CP2015–38. 

Stanley F. Mires, 

Attorney, Federal Requirements. 

[FR Doc. 2015–02364 Filed 2–5–15; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31441; 812–14338] 

Capital Group ETF Trust, et al.; Notice 

of Application 

February 2, 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 

(‘‘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 (a)(2) of the 

Act. 

APPLICANTS: Capital Group ETF Trust 

(the ‘‘Trust’’); Capital Research and 

Management Company (the ‘‘Initial 

Adviser’’); and American Funds 

Distributors, Inc. (the ‘‘Distributor’’). 

SUMMARY OF APPLICATION: Applicants 

request an order that permits: (a) 

Actively-managed 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; (c) certain 

series to pay redemption proceeds, 

under certain circumstances, more than 

seven days from 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; (e) certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

series to acquire Shares; and (f) certain 

series to perform creations and 

redemptions of Creation Units in-kind 

in a master-feeder structure. 

FILING DATES: The application was filed 

on July 28, 2014, and amended on 

October 17, 2014 and January 26, 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 27, 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: 

333 South Hope Street, Los Angeles, 

California 90071. 

FOR FURTHER INFORMATION CONTACT: 

Mark N. Zaruba, Senior Counsel, at 

(202) 551–6878 or Mary Kay Frech, 

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, which is organized as a 

Delaware statutory trust, will be 

registered under the Act as an open-end 

management investment company. The 

Trust will consist of multiple series. The 

Trust will initially offer one series (the 

‘‘Initial Fund’’) that will rely on the 

order. The Initial Fund’s investment 

objective will be to seek to provide longterm growth of capital, with income as 

a secondary objective. 

2. The Initial Adviser is, and any 

other Adviser (as defined below), will 

be registered as an investment adviser 

under the Investment Advisers Act of 


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1Applicants request that the order apply to any 

future distributor of the Funds, which would be a 

registered broker-dealer under the Exchange Act 

and would comply with the terms and conditions 

of the application (‘‘Future Distributor’’). 

Applicants state that the Distributor or Future 

Distributor of any Fund may be an affiliated person 

or a second-tier affiliate of that Fund’s Adviser and/ 

or Sub-Advisers. 

2All entities that currently intend to rely on the 

order are named as applicants. Any other entity that 

relies on the order in the future will comply with 

the terms and conditions of the application. 

3 If a Fund (or its respective Master Fund) invests 

in derivatives, then (a) the board of trustees 

(‘‘Board’’) of the Fund will periodically review and 

approve the Fund’s (or, in the case of a Feeder 

Fund, its Master Fund’s) use of derivatives and how 

the Adviser assesses and manages risk with respect 

to the Fund’s (or, in the case of a Feeder Fund, its 

Master Fund’s) use of derivatives and (b) the Fund’s 

disclosure of its (or, in the case of a Feeder Fund, 

its Master Fund’s) use of derivatives in its offering 

documents and periodic reports will be consistent 

with relevant Commission and staff guidance. 

4 Depositary Receipts are typically issued by a 

financial institution, a ‘‘depositary,’’ and evidence 

ownership in a security or pool of securities that 

have been deposited with the depositary. A Fund 

(or its respective Master Fund) will not invest in 

any Depositary Receipts that the Adviser or SubAdviser 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 depositary bank for any Depositary Receipts 

held by a Fund. 

5A Fund of Funds may rely on the order only to 

invest in Funds and not in any other registered 

investment company. 

6A Feeder Fund managed in a master-feeder 

structure will not make direct investments in any 

security or other instrument other than the 

securities issued by its respective Master Fund. 

7 In a master-feeder structure, the Master Fund, 

rather than the Feeder Fund, would invest its 

portfolio in compliance with the order. There 

would be no ability by Fund shareholders to 

exchange shares of Feeder Funds for shares of 

another feeder series of the Master Fund. 

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

serve as investment adviser to each of 

the Funds (as defined below). The 

Adviser may enter into sub-advisory 

agreements with one or more affiliated 

or unaffiliated investment advisers, each 

of which will serve as sub-adviser to a 

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

Advisers Act or will not be subject to 

registration. The Distributor is a 

registered broker-dealer (‘‘Broker’’) 

under the Securities Exchange Act of 

1934 (‘‘Exchange Act’’) and will act as 

the distributor and principal 

underwriter of the Funds.1

3. Applicants request that the order 

apply to the Initial Fund as well as to 

future series of the Trust and any future 

open-end management investment 

companies or series thereof that would 

operate as actively-managed exchangetraded funds (‘‘Future Funds’’). Any 

Future Fund will (a) be advised by the 

Initial Adviser or an entity controlling, 

controlled by, or under common control 

with the Initial Adviser (the Initial 

Adviser and each such other entity and 

any successor thereto included in the 

term ‘‘Adviser’’) and (b) comply with 

the terms and conditions of the 

application.2 The Initial Fund and 

Future Funds together are the ‘‘Funds.’’ 

Each Fund will operate as an actively 

managed exchange-traded fund (‘‘ETF’’), 

and a Fund may operate as a feeder fund 

in a master-feeder structure (‘‘Feeder 

Fund’’). 

4. Applicants state that the Funds, or 

their respective Master Funds (as 

defined below), may invest in equity 

securities or fixed income securities 

(‘‘Fixed Income Funds’’) traded in the 

U.S. or non-U.S. markets. Fixed Income 

Funds may also include Funds that 

invest in a combination of equity and 

fixed-income securities. Funds, or their 

respective Master Funds, that invest in 

foreign equity and/or fixed income 

securities, are ‘‘Foreign Funds.’’ Foreign 

Funds may also include Funds that 

invest in a combination of foreign and 

domestic equity and/or fixed income 

securities. Applicants state that the 

Funds may also invest in a broad variety 

of other instruments 3 and that a Foreign 

Fund, either directly or through a 

Master Fund, may invest a significant 

portion of its assets in depositary 

receipts representing foreign securities 

in which they seek to invest 

(‘‘Depositary Receipts’’).4 Applicants 

further state that, in order to implement 

each Fund’s investment strategy, the 

Adviser and/or Sub-Advisers of a Fund 

may review and change the securities, 

other assets and other positions held by 

the Fund or its respective Master Fund 

(‘‘Portfolio Instruments’’) daily. 

5. With respect to section 12(d)(1), 

applicants are requesting relief (‘‘Fund 

of Funds Relief’’) to permit management 

investment companies and unit 

investment trusts (‘‘UITs’’) registered 

under the Act that are not part of the 

same ‘‘group of investment companies,’’ 

within the meaning of section 

12(d)(1)(G)(ii) of the Act, as the Funds 

(such registered 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 

limitations in section 12(d)(1)(A) and to 

permit the Funds, and any principal 

underwriter for the Funds, and any 

Broker, to sell Shares beyond the 

limitations in section 12(d)(l)(B) to 

Funds of Funds. Applicants request that 

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

from sections 12(d)(1)(A) and (B) apply 

to: (1) Each Fund that is currently or 

subsequently part of the same ‘‘group of 

investment companies’’ as the Initial 

Fund within the meaning of section 

12(d)(1)(G)(ii) of the Act, as well as any 

principal underwriter for the Funds and 

any Brokers selling Shares of a Fund to 

Funds of Funds; and (2) each Fund of 

Funds that enters into a participation 

agreement (‘‘FOF Participation 

Agreement’’) with a Fund. ‘‘Funds of 

Funds’’ do not include the Funds. Each 

Investing Management Company’s 

investment adviser within the meaning 

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

‘‘Fund of Funds Adviser.’’ Similarly, 

each Investing Trust’s sponsor is the 

‘‘Sponsor.’’ Applicants represent that 

each Fund of Funds Adviser will be 

registered as an investment adviser 

under the Advisers Act and that no 

Fund of Funds Adviser or Sponsor will 

control, be controlled by, or be under 

common control with the Adviser.5

6. Applicants further request that the 

order permit a Fund to operate as a 

Feeder Fund (‘‘Master-Feeder Relief’’). 

Under the order, a Feeder Fund would 

be permitted to acquire shares of 

another registered investment company 

in the same group of investment 

companies having substantially the 

same investment objectives as the 

Feeder Fund (‘‘Master Fund’’) beyond 

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

the Act,6 and the Master Fund, and any 

principal underwriter for the Master 

Fund, would be permitted to sell shares 

of the Master Fund to the Feeder Fund 

beyond the limitations in section 

12(d)(1)(B) of the Act. Applicants 

request that the Master-Feeder Relief 

apply to any Feeder Fund, any Master 

Fund and any principal underwriter for 

the Master Funds selling shares of a 

Master Fund to a Feeder Fund. 

Applicants state that creating an 

exchange-traded feeder fund may be 

preferable to creating entirely new series 

for several reasons, including avoiding 

additional overhead costs and 

economies of scale for the Feeder 

Funds.7 Applicants assert that, while 

certain costs may be higher in a masterfeeder structure and there may possibly 

be lower tax efficiencies for the Feeder 

Funds, the Feeder Funds’ Board will 

consider any such potential 

disadvantages against the benefits of 

economies of scale and other benefits of 

operating within a master-feeder 

structure. 

7. With the exception of Shares issued 

in connection with a dividend 


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8The dividend reinvestment plan that a Fund 

may use is described in greater detail in the 

application. 

9Feeder Funds will redeem shares from the 

appropriate Master Fund and then deliver to the 

redeeming shareholder the applicable redemption 

payment. 

10The 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 (the ‘‘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. 

11Each Fund will sell and redeem Creation Units 

on any day the Trust is open, including as required 

by section 22(e) of the Act (each, a ‘‘Business Day’’). 

12The portfolio used for this purpose will be the 

same portfolio used to calculate the Fund’s net asset 

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

13A tradeable round lot for a security will be the 

standard unit of trading in that particular type of 

security in its primary market. 

14A 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. 

15This 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. 

16Because these instruments will be excluded 

from the Creation Basket, their value will be 

reflected in the determination of the Balancing 

Amount (defined below). 

17A ‘‘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). 

18Applicants are not requesting relief from 

section 18 of the Act. Accordingly, a Master Fund 

may require a Transaction Fee payment to cover 

expenses related to purchases or redemptions of the 

Master Fund’s shares by a Feeder Fund only if it 

requires the same payment for equivalent purchases 

or redemptions by any other feeder fund. Thus, for 

example, a Master Fund may require payment of a 

Transaction Fee by a Feeder Fund for transactions 

for 20,000 or more shares so long as it requires 

payment of the same Transaction Fee by all feeder 

funds for transactions involving 20,000 or more 

shares. 

reinvestment plan,8 each Fund will 

issue, on a continuous offering basis, its 

Shares in one or more groups of a fixed 

number of Shares (e.g., at least 50,000 

Shares). Applicants believe that a 

conventional trading range will be 

between $20–$50 per Share. All orders 

to purchase Creation Units must be 

placed with the Distributor by or 

through a party that has entered into a 

participant agreement with the 

Distributor of the Fund (‘‘Authorized 

Participant’’) with respect to the 

creation and redemption of Creation 

Units. An Authorized Participant is 

either: (a) A Broker or other participant 

in the Continuous Net Settlement 

System of the National Securities 

Clearing Corporation (‘‘NSCC’’), a 

clearing agency registered with the 

Commission, or (b) a participant in the 

DTC (such participant, ‘‘DTC 

Participant’’). 

8. In order to keep costs low and 

permit each Fund to be as fully invested 

as possible, Shares (other than Shares 

issued in connection with a dividend 

reinvestment plan) will be purchased 

and redeemed in Creation Units and 

generally on an in-kind basis.9 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’’).10 On any given Business 

Day 11 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 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),12 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; 13 or (c) TBA 

Transactions,14 short positions and 

other positions that cannot be 

transferred in kind 15 will be excluded 

from the Creation Basket.16 If there is a 

difference between 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’’). 

9. 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 or DTC; or (ii) 

in the case of 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 Foreign Fund 

would be subject to unfavorable income 

tax treatment if the holder receives 

redemption proceeds in kind.17

10. Each Business Day, before the 

open of trading on a national securities 

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

of the Act (‘‘Exchange’’), on which 

Shares are listed, 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 

Exchange will disseminate every 15 

seconds throughout the trading day an 

amount representing, on a per Share 

basis, the sum of the current value of the 

Portfolio Instruments that were publicly 

disclosed prior to the commencement of 

trading in Shares on the Exchange. 

11. Transaction expenses, including 

operational processing and brokerage 

costs, may 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 beneficial owners. 

Accordingly, applicants state that each 

Fund may impose purchase or 

redemption transaction fees 

(‘‘Transaction Fees’’) in connection with 

effecting such purchases or 

redemptions.18 Applicants further state 


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19 In those instances in which a Fund permits an 

‘‘in-kind’’ purchaser to substitute cash in lieu of 

depositing one or more of the requisite Deposit 

Instruments or Redemption Instruments, the 

purchaser or seller may be assessed a higher 

Transaction Fee on the ‘‘cash in lieu’’ portion of its 

investment to cover the cost of purchasing the 

necessary securities, including operational 

processing and brokerage costs, and part or all of 

the spread between the expected bid and offer side 

of the market relating to such Deposit Instruments 

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. 

20 If Shares are listed on The NASDAQ Stock 

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

Exchange (including NYSE Arca), one or more 

member firms of that Exchange will act as Market 

Maker and maintain a market for Shares trading on 

that Exchange. On Nasdaq, no particular Market 

Maker would be contractually obligated to make a 

market in Shares. However, the listing requirements 

on Nasdaq, for example, stipulate that at least two 

Market Makers must be registered in Shares to 

maintain a listing. In addition, on Nasdaq and 

NYSE Arca, 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 a second-tier 

affiliate, of the Funds, except within section 

2(a)(3)(A) or (C) of the Act due solely to ownership 

of Shares as discussed below. 

21Shares 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 DTC Participants. 

22Feeder Funds will disclose information about 

the securities and other assets held by the Master 

Fund. 

23Under accounting procedures followed by the 

Funds, 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. 

24The Master Funds will not require relief from 

sections 2(a)(32) and 5(a)(1) because the Master 

Funds will issue individually redeemable 

securities. 

that, because 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 purchasers or redeemers 

of Creation Units and will be limited to 

amounts that have been determined 

appropriate by the Fund.19 The 

Distributor will be responsible for 

delivering a Fund’s current prospectus 

(‘‘Prospectus’’) or summary prospectus, 

if applicable, to purchasers of Shares in 

Creation Units and for maintaining 

records of both the orders placed with 

it and the confirmations of acceptance 

furnished by it. 

12. Shares will be listed and traded at 

negotiated prices on an Exchange and 

traded in the secondary market. When 

NYSE Arca, Inc. is the principal 

secondary market on which the Shares 

are listed and traded (the ‘‘Primary 

Listing Exchange’’), it is expected that 

one or more Exchange member firms 

will be designated by the Exchange to 

act as a market maker (a ‘‘Market 

Maker’’).20 The price of Shares trading 

on the Exchange will be based on a 

current bid/offer in the secondary 

market. Transactions involving the 

purchases and sales of Shares on the 

Exchange will be subject to customary 

brokerage commissions and charges. 

13. Applicants expect that purchasers 

of Creation Units will include 

institutional investors and arbitrageurs. 

Market Makers, acting in their role to 

provide a fair and orderly secondary 

market for Shares, also may purchase 

Creation Units for use in their own 

market making activities. Applicants 

expect that secondary market 

purchasers of Shares will include both 

institutional and retail investors.21

Applicants expect that arbitrage 

opportunities created by the ability to 

continually purchase or redeem 

Creation Units should ensure that the 

Shares will not trade at a material 

discount or premium in relation to their 

NAV. 

14. Shares will not be individually 

redeemable, and only Shares combined 

into Creation Units of a specified size 

will be redeemable. Redemption 

requests must be placed by or through 

an Authorized Participant. 

15. Neither the Trust nor any Fund 

will be marketed or otherwise held out 

as a ‘‘mutual fund.’’ Instead, each Fund 

will be marketed as an ‘‘activelymanaged exchange-traded fund.’’ In any 

advertising material where features of 

obtaining, buying or selling Shares 

traded on the Exchange are described 

there will be an appropriate statement to 

the effect that Shares are not 

individually redeemable. 

16. On each Business Day, before the 

commencement of trading in Shares on 

the Fund’s Primary Listing Exchange, 

the Fund will disclose on the Trust’s 

Web site (‘‘Web site’’) the identities and 

quantities of the Portfolio Instruments 

and other assets held by the Fund (or its 

respective Master Fund) 22 that will 

form the basis of the Fund’s calculation 

of NAV at the end of the Business Day, 

the Fund’s per Share 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, all as of the prior Business 

Day.23

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 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) of the Act 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 provisions 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 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 

to permit the Trust to register as openend management investment companies 

and issue Shares that are redeemable in 

Creation Units only.24 Applicants state 

that investors may purchase Shares in 

Creation Units from each Fund and 

redeem Creation Units from each Fund. 

Applicants further state that, because of 

the arbitrage possibilities created by the 

redeemability of Creation Units, they 


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25The Master Funds will not require relief from 

section 22(d) or rule 22c–1 because shares of the 

Master Funds will not trade at negotiated prices in 

the secondary market. 

26Applicants acknowledge that no relief obtained 

from the requirements of section 22(e) 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. 

27Certain countries in which a Fund may invest 

have historically had settlement periods of up to 15 

calendar days. 

28Other feeder funds invested in any Master 

Fund are not seeking, and will not rely on, the 

section 22(e) relief requested herein. 

expect that the market price of 

individual Shares will not deviate 

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 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.25

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 to (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 settlement of redemptions 

for Foreign 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 in which those Funds invest. 

Applicants have been advised that the 

delivery cycles for transferring 

Redemption Instruments to redeeming 

investors, coupled with local market 

holiday schedules, will require a 

delivery process longer than seven 

calendar days. Applicants therefore 

request relief from the requirement 

imposed by section 22(e) to provide 

payment or satisfaction of redemptions 

within seven (7) calendar days 

following the tender of a Creation Unit 

of such Funds.26

8. Applicants state that section 22(e) 

was designed to prevent unreasonable, 

undisclosed and 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 27 would not be inconsistent with 

the spirit and intent of section 22(e).28

Applicants represent that each Fund’s 

statement of additional information 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 Funds that do 

not effect redemptions in-kind. 

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 

Funds of Funds to acquire Shares in 

excess of the limits in section 

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

Funds, their principal underwriters and 

any Broker to sell Shares to Funds of 

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 certain of 

their proposed conditions address 

concerns about potential for undue 

influence. To limit the control that a 

Fund of Funds may have over a Fund, 

applicants propose a condition 

prohibiting the Fund of Funds Adviser, 

Sponsor, any person controlling, 

controlled by, or under common control 

with the Fund of Funds Adviser 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 Fund of Funds 

Adviser, the Sponsor, or any person 

controlling, controlled by, or under 

common control with the 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 subadviser to an Investing Management 

Company (‘‘Fund of Funds SubAdviser’’), any person controlling, 

controlled by or under common control 

with the Fund of Funds Sub-Adviser, 


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29A ‘‘Fund of Funds Affiliate’’ is any Fund of 

Funds Adviser, Fund of Funds Sub-Adviser, 

Sponsor, promoter or principal underwriter of a 

Fund of Funds, and any person controlling, 

controlled by or under common control with any 

of these entities. A ‘‘Fund Affiliate’’ is the Adviser, 

Sub-Adviser, promoter, or principal underwriter of 

a Fund or any person controlling, controlled by or 

under common control with any of these entities. 

30An ‘‘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, Fund of Funds SubAdviser, 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). 

31Any reference to NASD Conduct Rule 2830 

includes any successor or replacement rule that 

may be adopted by the Financial Industry 

Regulatory Authority. 

32Applicants 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 the 

Adviser, or an entity controlling, controlled by or 

under common control with the Adviser is also an 

investment adviser to the Fund of Funds. 

33To 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. The requested relief is intended 

to cover, however, transactions directly between 

Funds and Funds of Funds. 

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 SubAdviser or any person controlling, 

controlled by or under common control 

with the Fund of Funds Sub-Adviser 

(‘‘Fund of Funds Sub-Advisory Group’’). 

12. Applicants propose a condition to 

ensure that no Fund of Funds or Fund 

of Funds Affiliate 29 (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’’).30

13. Applicants propose several 

conditions to address the potential for 

layering of fees. Applicants note that 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 (‘‘independent Board 

members’’), 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 Investing Management 

Company may invest. Applicants also 

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 2830.31

14. In order to address concerns about 

complexity, applicants propose 

condition B.12, which will prohibit 

Funds 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 a 

Fund to purchase shares of other 

investment companies for short-term 

cash management purposes. 

15. Finally, each Fund of Funds must 

enter into an FOF Participation 

Agreement with the respective Funds, 

which will include an 

acknowledgement from the Fund of 

Funds that it may rely on the order only 

to invest in a Fund and not in any other 

investment company. 

16. Applicants also are seeking relief 

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

12(d)(1)(B) to the extent necessary to 

permit the Feeder Funds to perform 

creations and redemptions of Shares inkind in a master-feeder structure. 

Applicants assert that this structure is 

substantially identical to traditional 

master-feeder structures permitted 

pursuant to the exception provided in 

section 12(d)(1)(E) of the Act. Section 

12(d)(1)(E) provides that the percentage 

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

(B) will not apply to a security issued 

by an investment company (in this case, 

the shares of the applicable Master 

Fund) if, among other things, that 

security is the only investment security 

held in the investing fund’s portfolio (in 

this case, the Feeder Fund’s portfolio). 

Applicants believe the proposed masterfeeder structure complies with section 

12(d)(1)(E) because each Feeder Fund 

will hold only investment securities 

issued by its corresponding Master 

Fund; however, the Feeder Funds may 

receive securities other than securities 

of its corresponding Master Fund if a 

Feeder Fund accepts an in-kind 

creation. To the extent that a Feeder 

Fund may be deemed to be holding both 

shares of the Master Fund and other 

securities, applicants request relief from 

sections 12(d)(1)(A) and (B). The Feeder 

Funds would operate in compliance 

with all other provisions of section 

12(d)(1)(E). 

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

17. Section 17(a) of the Act generally 

prohibits an affiliated person of a 

registered investment company, or an 

affiliated person of such a person 

(‘‘second tier affiliate’’), 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 a company 

and provides that a control relationship 

will be presumed where one person 

owns more than 25% of another 

person’s voting securities. Each Fund 

may be deemed to be controlled by 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 (an ‘‘Affiliated Fund’’). 

18. 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 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 in 

excess of 25% of the outstanding Shares 

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.32 Applicants also 

request an exemption in order to permit 

a Fund to sell its Shares to and redeem 

its Shares from, and engage in the inkind transactions that would 

accompany such sales and redemptions 

with, certain Funds of Funds of which 

the Funds are affiliated persons or 

second-tier affiliates.33

19. 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. 

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 Instruments 


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34Applicants 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 the 

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. 

currently held by the relevant Funds, 

and the valuation of the Deposit 

Instruments and Redemption 

Instruments will be made in the same 

manner and on the same terms for all, 

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 a Fund of Funds meets 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 in accordance with policies and 

procedures set forth in the Fund’s 

registration statement.34 The FOF 

Participation Agreement will require 

any Fund of Funds that purchases 

Creation Units directly from a Fund to 

represent that the purchase of Creation 

Units from a Fund by a Fund of Funds 

will be accomplished in compliance 

with the investment restrictions of the 

Fund of Funds and will be consistent 

with the investment policies set forth in 

the Fund of Fund’s registration 

statement. 

21. In addition, to the extent that a 

Fund operates in a master-feeder 

structure, applicants also request relief 

permitting the Feeder Funds to engage 

in in-kind creations and redemptions 

with the applicable Master Fund. 

Applicants state that the request for 

relief described above would not be 

sufficient to permit such transactions 

because the Feeder Funds and the 

applicable Master Fund could also be 

affiliated by virtue of having the same 

investment adviser. However, 

applicants believe that in-kind creations 

and redemptions between a Feeder 

Fund and a Master Fund advised by the 

same investment adviser do not involve 

‘‘overreaching’’ by an affiliated person. 

Applicants represent that such 

transactions will occur only at the 

Feeder Fund’s proportionate share of 

the Master Fund’s net assets, and the 

distributed securities will be valued in 

the same manner as they are valued for 

the purposes of calculating the 

applicable Master Fund’s NAV. Further, 

all such transactions will be effected 

with respect to pre-determined 

securities and on the same terms with 

respect to all investors. Finally, such 

transaction would only occur as a result 

of, and to effectuate, a creation or 

redemption transaction between the 

Feeder Fund and a third-party investor. 

Applicants state that, in effect, the 

Feeder Fund will serve as a conduit 

through which creation and redemption 

orders by Authorized Participants will 

be effected. 

22. 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 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. 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 actively-managed ETFs, 

other than the Master-Feeder Relief. 

2. As long as a Fund operates in 

reliance on the requested order, the 

Shares of the Fund will be listed on an 

Exchange. 

3. Neither the Trust nor any Fund will 

be advertised or marketed as open-end 

investment companies or mutual funds. 

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 

Shares from the Fund (other than 

through a dividend reinvestment 

program) and tender Shares for 

redemption to the 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 the 

Fund, the prior Business Day’s NAV and 

the market closing price or Bid/Ask 

Price of the Shares, and a calculation of 

the premium or discount of the market 

closing price or Bid/Ask Price against 

such NAV. 

5. No Adviser or Sub-Adviser, directly 

or indirectly, will cause any Authorized 

Participant (or any investor on whose 

behalf an Authorized Participant may 

transact with the Fund) to acquire any 

Deposit Instrument for the Fund 

through a transaction in which the Fund 

could not engage directly. 

6. On each Business Day, before the 

commencement of trading in Shares on 

the Fund’s Primary Listing Exchange, 

the Fund will disclose on the Web site 

the identities and quantities of the 

Portfolio Instruments and other assets 

held by the Fund (or its respective 

Master Fund) that will form the basis of 

the Fund’s calculation of NAV at the 

end of the Business Day. 

B. Section 12(d)(1) Relief 

1. The members of the Fund of Funds 

Advisory Group will not control 

(individually or in the aggregate) a Fund 

(or its respective Master Fund) within 

the meaning of section 2(a)(9) of the Act. 

The members of the Fund of Funds SubAdvisory Group will not control 

(individually or in the aggregate) a Fund 

(or its respective Master 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% 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 (or its respective Master 

Fund) for which the Fund of Funds SubAdviser 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 a Fund of Funds 

Affiliate and the Fund (or its respective 

Master Fund) or a Fund Affiliate. 

3. The board of directors or trustees of 

an Investing Management Company, 

including a majority of the independent 

directors or trustees, will adopt 

procedures reasonably designed to 

ensure that the Fund of Funds Adviser 

and any Fund of Funds Sub-Adviser are 

conducting the investment program of 

the Investing Management Company 


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without taking into account any 

consideration received by the Investing 

Management Company or a Fund of 

Funds Affiliate from a Fund (or its 

respective Master Fund) or a Fund 

Affiliate in connection with any services 

or transactions. 

4. Once an investment by a Fund of 

Funds in the Shares of a Fund exceeds 

the limit in section 12(d)(1)(A)(i) of the 

Act, the Board of the Fund (or its 

respective Master Fund), including a 

majority of the independent Board 

members, will determine that any 

consideration paid by the Fund (or its 

respective Master 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 (or its respective Master Fund); (ii) 

is within the range of consideration that 

the Fund (or its respective Master 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 (or its respective Master 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 

(or its respective Master Fund) pursuant 

to rule 12b–1 under the Act) received 

from a Fund (or its respective Master 

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 (or its respective 

Master 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 

(or its respective Master 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 (or its respective Master 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 (or its respective 

Master Fund)) will cause a Fund (or its 

respective Master Fund) to purchase a 

security in an Affiliated Underwriting. 

7. The Board of the Fund (or its 

respective Master Fund), including a 

majority of the independent Board 

members, will adopt procedures 

reasonably designed to monitor any 

purchases of securities by the Fund (or 

its respective Master 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 (or 

its respective Master 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 (or its respective 

Master 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 

beneficial owners of the Fund. 

8. Each Fund (or its respective Master 

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 limits in section 

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

execute a FOF Participation Agreement 

with the Fund stating 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 as soon as reasonably 

practicable after a change occurs. The 

Fund and the Fund of 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 independent 

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 (or its respective Master Fund) in 

which the Investing Management 

Company may invest. These findings 

and their basis will be recorded fully 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 (or its respective Master 

Fund) will acquire securities of an 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
6788 Federal Register / Vol. 80, No. 25 / Friday, February 6, 2015 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73857 

(Dec. 17, 2014), 79 FR 77069. 

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

5 Id. 

6 17 CFR 200.30–3(a)(31). 

investment company or company 

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

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 that (i) the 

Fund (or its respective Master Fund) 

acquires securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting the Fund (or its respective 

Master Fund) to acquire securities of 

one or more investment companies for 

short-term cash management purposes, 

or (ii) the Fund acquires securities of the 

Master Fund pursuant to the MasterFeeder Relief. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02318 Filed 2–5–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74186; File No. SR– 

NYSEArca-2014–139] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on Proposed Rule Change Relating to 

Shares of the iShares California AMTFree Muni Bond ETF and iShares New 

York AMT-Free Muni Bond ETF 

February 2, 2015. 

On December 3, 2014, NYSE Arca, 

Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change relating to shares of the iShares 

California AMT-Free Muni Bond ETF 

and iShares New York AMT-Free Muni 

Bond ETF. The proposed rule change 

was published for comment in the 

Federal Register on December 23, 

2014.3 The Commission received no 

comments on the proposal. 

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

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is February 6, 

2015. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider this proposed rule change. 

Accordingly, the Commission, pursuant 

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

designates March 23, 2015, as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–NYSEArca–2014–139). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02342 Filed 2–5–15; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #14215 and #14216] 

Washington Disaster #WA–00052 

AGENCY: Small Business Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of WASHINGTON dated 

01/29/2015. 

Incident: Severe Storms, Flooding and 

Mudslides. 

Incident Period: 01/03/2015 through 

01/06/2015. 

DATES: Effective Date: 01/29/2015. 

Physical Loan Application Deadline 

Date: 03/30/2015. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 10/29/2015. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW., Suite 6050, 

Washington, DC 20416. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

filed at the address listed above or other 

locally announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Grays Harbor 

Contiguous Counties: 

Washington: Jefferson; Lewis; Mason; 

Pacific; Thurston 

The Interest Rates are: 

Percent 

For Physical Damage: 

Homeowners With Credit Available Elsewhere ...................... 3.875 

Homeowners Without Credit 

Available Elsewhere .............. 1.938 

Businesses With Credit Available Elsewhere ...................... 6.000 

Businesses Without Credit 

Available Elsewhere .............. 4.000 

Non-Profit Organizations With 

Credit Available Elsewhere ... 2.625 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.625 

For Economic Injury: 

Businesses & Small Agricultural 

Cooperatives Without Credit 

Available Elsewhere .............. 4.000 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.625 

The number assigned to this disaster 

for physical damage is 14215 B and for 

economic injury is 14216 0. 

The State which received an EIDL 

Declaration # is Washington. 

(Catalog of Federal Domestic Assistance 

Numbers 59002 and 59008) 

Dated: January 29, 2015. 

Maria Contreras-Sweet, 

Administrator. 

[FR Doc. 2015–02361 Filed 2–5–15; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #14217 and #14218] 

Disaster #CA–00229 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the Soboba Band of Luiseno Indians 

(FEMA–4206–DR), dated 01/27/2015. 

Incident: Severe Storms, Flooding, 

and Mudslides. 

Incident Period: 12/04/2014 through 

12/06/2014. 

Effective Date: 01/27/2015. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES