12526 Federal Register / Vol. 80, No. 45 / Monday, March 9, 2015 / Notices 

NTSB Forum Manager: Rick Narvell— 

rick.narvell@ntsb.gov. 

Candi R. Bing, 

Executive Secretariat. 

[FR Doc. 2015–05410 Filed 3–6–15; 8:45 am] 

BILLING CODE 7533–01–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

Submission of Information Collection 

for OMB Review; Comment Request; 

Survey of Nonparticipating Single 

Premium Group Annuity Rates 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Notice of request for extension 

of OMB approval. 

SUMMARY: The Pension Benefit Guaranty 

Corporation (‘‘PBGC’’) is requesting that 

the Office of Management and Budget 

(‘‘OMB’’) extend approval, under the 

Paperwork Reduction Act, of a 

collection of information (OMB control 

number 1212–0030; expires March 31, 

2015). This voluntary collection of 

information is a quarterly survey of 

insurance company rates for pricing 

annuity contracts. The American 

Council of Life Insurers conducts the 

survey for PBGC. This notice informs 

the public of PBGC’s request and solicits 

public comment on the collection of 

information. 

DATES: Comments should be submitted 

by April 8, 2015. 

ADDRESSES: Comments should be sent to 

the Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Attention: Desk Officer for 

Pension Benefit Guaranty Corporation, 

via electronic mail at OIRA_DOCKET@

omb.eop.gov or by fax to (202) 395– 

6974. 

A copy of the request (including the 

collection of information) will be posted 

at http://www.pbgc.gov/res/lawsandregulations/informationcollectionsunder-omb-review.html. It 

may also be obtained without charge by 

writing to the Disclosure Division of the 

Office of the General Counsel of PBGC 

at the above address, visiting the 

Disclosure Division, faxing a request to 

202–326–4042, or calling 202–326–4040 

during normal business hours. (TTY and 

TDD users may call the Federal relay 

service toll-free at 1–800–877–8339 and 

ask to be connected to 202–326–4040.) 

The Disclosure Division will email, fax, 

or mail the information to you, as you 

request. 

FOR FURTHER INFORMATION CONTACT: Jo 

Amato Burns, Attorney (326–4400, ext. 

3072) or Catherine B. Klion, Assistant 

General Counsel (326–4400, ext. 3041), 

Office of the General Counsel, Pension 

Benefit Guaranty Corporation, 1200 K 

Street NW., Washington, DC 20005, 

202–326–4400 (TTY and TDD users may 

call the Federal relay service toll-free at 

1–800–877–8339 and ask to be 

connected to 202–326–4400.) 

SUPPLEMENTARY INFORMATION: PBGC’s 

regulations prescribe actuarial valuation 

methods and assumptions (including 

interest rate assumptions) to be used in 

determining the actuarial present value 

of benefits under single-employer plans 

that terminate (29 CFR part 4044) and 

under multiemployer plans that 

undergo a mass withdrawal of 

contributing employers (29 CFR part 

4281). Each month PBGC publishes the 

interest rates to be used under those 

regulations for plans terminating or 

undergoing mass withdrawal during the 

next month. 

The interest rates are intended to 

reflect current conditions in the annuity 

markets. To determine these interest 

rates, PBGC gathers pricing data from 

insurance companies that are providing 

annuity contracts to terminating 

pension plans through a quarterly 

‘‘Survey of Nonparticipating Single 

Premium Group Annuity Rates.’’ The 

American Council of Life Insurers 

distributes the survey and provides 

PBGC with ‘‘blind’’ data (i.e., PBGC is 

unable to match responses with the 

companies that submitted them). PBGC 

also uses the information from the 

survey in determining the interest rates 

it uses to value benefits payable to 

participants and beneficiaries in PBGCtrusteed plans for purposes of PBGC’s 

financial statements. 

The survey is directed at insurance 

companies that have volunteered to 

participate, most, or all, of which are 

members of the American Council of 

Life Insurers. The survey is conducted 

quarterly and will be sent to 

approximately 22 insurance companies. 

Based on experience under the current 

approval, PBGC estimates that 6 

insurance companies will complete and 

return the survey. PBGC further 

estimates that the average annual 

burden of this collection of information 

is 12 hours and $480. 

The collection of information has 

been approved by OMB under control 

number 1212–0030 through March 31, 

2015. PBGC is requesting that OMB 

extend its approval for another three 

years. An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

Issued in Washington, DC, this 3rd day of 

March 2015. 

Judith Starr, 

General Counsel, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2015–05367 Filed 3–6–15; 8:45 am] 

BILLING CODE 7709–02–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31492; 812–13819] 

Janus ETF Trust, et al.; Notice of 

Application 

March 3, 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: Janus ETF Trust (the 

‘‘Trust’’), Janus Capital Management 

LLC (the ‘‘Adviser’’) and Janus 

Distributors LLC (‘‘Janus Distributors’’). 

Summary of Application: 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; (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 September 3, 2010, and 

amended on March 25, 2011 and 

November 6, 2014. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

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Federal Register / Vol. 80, No. 45 / Monday, March 9, 2015 / Notices 12527 

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 would result 

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 

relies on the order in the future will comply with 

the terms and conditions of the application. 

4 Depositary Receipts are typically issued by a 

financial institution (a ‘‘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 any 

Sub-Adviser deems to be illiquid or for which 

pricing information is not readily available. No 

affiliated persons of applicants or any Sub-Adviser 

will serve as the Depositary for any Depositary 

Receipts held by a Fund (or its respective Master 

Fund). 

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

in derivatives, then (a) the Fund’s board of trustees 

or directors (for any entity, the ‘‘Board’’) will 

periodically review and approve the Fund’s (or, in 

the case of a Feeder Fund, its Master Fund’s) use 

of derivatives and how the Fund’s investment 

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. 

6An Acquiring Fund may rely on the order only 

to invest in a Fund and not in any other registered 

investment company. 

7A 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. 

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 March 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: Brent J. Fields, Secretary, 

U.S. Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549. Applicants: 

Janus Capital Management LLC, 151 

Detroit Street, Denver, Colorado 80206. 

FOR FURTHER INFORMATION CONTACT: 

Laura J. Riegel, Senior Counsel, at (202) 

551–6873 or Dalia Osman Blass, 

Assistant Chief Counsel, 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, or its respective Master Fund (as 

defined below), will have distinct 

investment strategies and will attempt 

to achieve its investment objective by 

utilizing an active management strategy. 

The Initial Fund of the Trust (the 

‘‘Initial Fund’’) will employ an activelymanaged fixed-income strategy to 

maximize total return, consistent with 

preservation of capital. The Initial Fund 

will invest under normal circumstances 

in bonds, including, but not limited to 

government notes and bonds, corporate 

bonds, convertible bonds, commercial 

and residential mortgage-backed 

securities, asset-backed securities, zerocoupon bonds, and derivatives that 

provide exposure to bonds. 

2. Janus Capital Management LLC, a 

Delaware limited liability company, is, 

and any other Adviser will be, 

registered as an investment adviser 

under the Investment Advisers Act of 

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

will be the investment adviser to each 

Fund, or its respective Master Fund, and 

may enter into sub-advisory agreements 

with one or more investment advisers, 

each of which will serve as sub-adviser 

(each, a ‘‘Sub-Adviser’’) to a Fund, or its 

respective Master Fund. Any SubAdviser will be registered or not subject 

to registration under the Advisers Act. 

Janus Distributors, 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 future series of the Trust or of 

any other open-end investment 

company that currently exists or may be 

created in the future that, in each case, 

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

Janus Capital Management LLC or an 

entity controlling, controlled by, or 

under common control with Janus 

Capital Management LLC (each such 

entity or any successor entity thereto is 

included in the term ‘‘Adviser’’) 2 and 

(c) complies with the terms and 

conditions of the application 

(individually a ‘‘Fund,’’ and 

collectively, the ‘‘Funds’’).3

4. The Funds, or their respective 

Master Funds, may invest in equity 

securities or fixed income securities 

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

Funds, or their respective Master Funds, 

that invest in equity securities or fixed 

income securities traded in the U.S. or 

non-U.S. markets are ‘‘Global Funds.’’ 

Funds, or their respective Master Funds, 

that invest solely in foreign equity 

securities or foreign fixed income 

securities are ‘‘Foreign Funds.’’ The 

Funds, or their respective Master Funds, 

may also invest in ‘‘Depositary 

Receipts’’ 4 and may engage in TBA 

Transactions (defined below). 

Applicants further state that, in order to 

implement each Fund’s investment 

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

change the securities, or instruments, or 

other assets or positions held by the 

Fund, or its respective Master Fund 

(‘‘Portfolio Positions’’) daily.5

5. Applicants also request that any 

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

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

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

Acquiring Fund (as defined below); and 

(iii) any Brokers selling Shares of a 

Fund to an Acquiring Fund or any 

principal underwriter of a Fund. A 

management investment company or 

unit investment trust registered under 

the Act that is not part of the same 

‘‘group of investment companies’’ as the 

Fund within the meaning of section 

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

acquires Shares of a Fund in excess of 

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

Act is referred to as an ‘‘Acquiring 

Management Company’’ or an 

‘‘Acquiring Trust,’’ respectively, and the 

Acquiring Management Companies and 

Acquiring Trusts are referred to 

collectively as ‘‘Acquiring Funds.’’6

6. Applicants further request that the 

order permit a Fund to operate as a 

feeder fund (‘‘Feeder Fund’’) (‘‘MasterFeeder 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,7 and the 

Master Fund, and any principal 

underwriter for the Master Fund, would 

be permitted to sell shares of the Master 

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12528 Federal Register / Vol. 80, No. 45 / Monday, March 9, 2015 / Notices 

8 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. 

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 (‘‘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 that 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). 

Fund to the Feeder Fund beyond the 

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

Act. Applicants request that the MasterFeeder 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.8 Applicants assert that while 

certain costs may be higher in a masterfeeder structure and that 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. A Creation Unit will consist of at 

least 25,000 Shares and applicants 

expect that the trading price of a Share 

will range from $20 to $100. All orders 

to purchase Creation Units must be 

placed with the Distributor by or 

through an ‘‘Authorized Participant,’’ 

which is either (a) a Broker or other 

participant in the Continuous Net 

Settlement System of the National 

Securities Clearing Corporation 

(‘‘NSCC’’, and such process the ‘‘NSCC 

Process’’), or (b) a participant in the 

Depository Trust Company (‘‘DTC,’’ 

such participant ‘‘DTC Participant’’ and 

such process the ‘‘DTC Process’’), 

which, in either case, has executed an 

agreement with the Distributor with 

respect to the purchase and redemption 

of Creation Units. 

8. In order to keep costs low and 

permit each Fund to be as fully invested 

as possible, Shares will be purchased 

and redeemed in Creation Units and 

generally on an in-kind basis.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 a redemption, as the 

‘‘Creation Basket.’’ In addition, the 

Creation Basket will correspond pro rata 

to the positions in a Fund’s portfolio 

(including cash positions),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 kind15 will be excluded 

from the Creation Basket.16 If there is a 

difference between the NAV attributable 

to a Creation Unit and the aggregate 

market value of the Creation Basket 

exchanged for the Creation Unit, the 

party conveying instruments with the 

lower value will also pay to the other an 

amount in cash equal to that difference 

(the ‘‘Balancing Amount’’). 

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 Process or DTC 

Process; or (ii) in the case of Global 

Funds and Foreign Funds, such 

instruments are not eligible for trading 

due to local trading restrictions, local 

restrictions on securities transfers or 

other similar circumstances; or (e) if a 

Fund permits an Authorized Participant 

to deposit or receive (as applicable) cash 

in lieu of some or all of the Deposit 

Instruments or Redemption Instruments, 

respectively, solely because: (i) Such 

instruments are, in the case of the 

purchase of a Creation Unit, not 

available in sufficient quantity; (ii) such 

instruments are not eligible for trading 

by an Authorized Participant or the 

investor on whose behalf the 

Authorized Participant is acting; or (iii) 

a holder of Shares of a Global Fund or 

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 (a ‘‘Listing Market’’), on 

which Shares are listed and traded, each 

Fund will cause to be published through 

the NSCC the names and quantities of 

the instruments comprising the Creation 

Basket, as well as the estimated 

Balancing Amount (if any), for that day. 

The published Creation Basket will 

apply until a new Creation Basket is 

announced on the following Business 

Day, and there will be no intra-day 

changes to the Creation Basket except to 

correct errors in the published Creation 

Basket. The Listing Market will 

disseminate, every 15 seconds 

throughout the regular trading hours, 

through the facilities of the 

Consolidated Tape Association, an 

estimated NAV, which is an amount per 

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Federal Register / Vol. 80, No. 45 / Monday, March 9, 2015 / Notices 12529 

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. 

19 If Shares are listed on The NASDAQ Stock 

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

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

more member firms of that Listing Market will act 

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

a market for Shares trading on that Listing Market. 

On Nasdaq, no particular Market Maker would be 

contractually obligated to make a market in Shares. 

However, the listing requirements on Nasdaq 

stipulate that at least two Market Makers must be 

registered in Shares to maintain a listing. Registered 

Market Makers are required to make a continuous 

two-sided market or subject themselves to 

regulatory sanctions. No Market Maker will be an 

affiliated person, or an affiliated person of an 

affiliated person, of the Funds, except within the 

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

solely to ownership of Shares. 

20Shares will be registered in book-entry form 

only. DTC or its nominee will be the registered 

owner of all outstanding Shares. Beneficial 

ownership of Shares will be shown on the records 

of DTC or DTC Participants. 

21Under accounting procedures followed by the 

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

will be booked and reflected in NAV on the current 

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

able to disclose at the beginning of the Business Day 

the profolio that will form the basis for the NAV 

calculation at the end of the Business Day. 

Share representing the current value of 

the Portfolio Positions that were 

publicly disclosed prior to the 

commencement of trading in Shares on 

the Listing Market. 

11. Each Fund will recoup the 

settlement costs charged by NSCC and 

DTC by imposing a fee (the 

‘‘Transaction Fee’’) on investors 

purchasing or redeeming Creation 

Units.18 Where a Fund permits an inkind purchaser or redeemer to deposit 

or receive cash in lieu of one or more 

Deposit or Redemption Instruments, the 

purchaser or redeemer may be assessed 

a higher Transaction Fee to offset the 

cost of buying or selling those particular 

Deposit or Redemption Instruments. In 

all cases, such Transaction Fees will be 

limited in accordance with 

requirements of the Commission 

applicable to management investment 

companies offering redeemable 

securities. All orders to purchase 

Creation Units must be placed with the 

Distributor by or through an Authorized 

Participant and the Distributor will 

transmit such orders to the Funds. The 

Distributor will be responsible for 

maintaining records of both the orders 

placed with it and the confirmations of 

acceptance furnished by it. 

12. Purchasers of Shares in Creation 

Units may hold such Shares or may sell 

such Shares into the secondary market. 

Shares will be listed and traded at 

negotiated prices on a Listing Market 

and it is expected that the relevant 

Listing Market will designate one or 

more member firms to maintain a 

market for the Shares.19 The price of 

Shares trading on a Listing Market will 

be based on a current bid-offer in the 

secondary market. Purchases and sales 

of Shares in the secondary market will 

not involve a Fund and will be subject 

to customary brokerage commissions 

and charges. 

13. Applicants expect that purchasers 

of Creation Units will include 

institutional investors and arbitrageurs. 

Applicants expect that secondary 

market purchasers of Shares will 

include both institutional and retail 

investors.20 Applicants believe that the 

structure and operation of the Funds 

will be designed to enable efficient 

arbitrage and, thereby, minimize the 

probability that Shares will trade at a 

material premium or discount to a 

Fund’s NAV. 

14. Shares will not be individually 

redeemable and owners of Shares may 

acquire those Shares from a Fund, or 

tender such shares for redemption to the 

Fund, in Creation Units only. To 

redeem, an investor must accumulate 

enough Shares to constitute a Creation 

Unit. Redemption requests must be 

placed by or through an Authorized 

Participant. As discussed above, 

redemptions of Creation Units will 

generally be made on an in-kind basis, 

subject to certain specified exceptions 

under which redemptions may be made 

in whole or in part on a cash basis, and 

will be subject to a Transaction Fee. 

15. Neither a Trust nor any Fund will 

be advertised or marketed or otherwise 

held out as a traditional open-end 

investment company or mutual fund. 

Instead, each Fund will be marketed as 

an ‘‘actively-managed exchange-traded 

fund.’’ All marketing materials that 

describe the features or method of 

obtaining, buying, or selling Creation 

Units, or Shares traded on a Listing 

Market, or refer to redeemability, will 

prominently disclose that Shares are not 

individually redeemable and that the 

owners of Shares may acquire those 

Shares from a Fund or tender those 

Shares for redemption to the Fund in 

Creation Units only. 

16. The Trust’s Web site (‘‘Website’’), 

which will be publicly available prior to 

the offering of Shares, will include each 

Fund’s prospectus (‘‘Prospectus’’), 

statement of additional information 

(‘‘SAI’’), and summary prospectus, if 

used. The Web site will contain, on a 

per Share basis for each Fund, the prior 

Business Day’s NAV and the market 

closing price or mid-point of the bid/ask 

spread at the time of calculation of such 

NAV (‘‘Bid/Ask Price’’), and a 

calculation of the premium or discount 

of the market closing price or the Bid/ 

Ask Price against such NAV. On each 

Business Day, prior to the 

commencement of trading in Shares on 

a Listing Market, each Fund shall post 

on the Web site the identities and 

quantities of the Portfolio Positions held 

by the Fund, or its respective Master 

Fund, that will form the basis for the 

calculation of the NAV at the end of that 

Business Day.21

Applicants’ Legal Analysis 

1. Applicants request an order under 

section 6(c) of the Act granting an 

exemption from sections 2(a)(32), 

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

rule 22c–1 under the Act; and under 

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

granting an exemption from sections 

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

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

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

Act. 

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

the Commission may exempt any 

person, security or transaction, or any 

class of persons, securities or 

transactions, from any provision of the 

Act, if and to the extent that such 

exemption is necessary or appropriate 

in the public interest and consistent 

with the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the Act. Section 17(b) 

of the Act authorizes the Commission to 

exempt a proposed transaction from 

section 17(a) of the Act if evidence 

establishes that the terms of the 

transaction, including the consideration 

to be paid or received, are reasonable 

and fair and do not involve 

overreaching on the part of any person 

concerned, and the proposed 

transaction is consistent with the 

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. 

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22The Master Funds will not require relief from 

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

Funds will issue individually redeemable 

securities. 

23The 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. 

24Applicants acknowledge that no relief obtained 

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

will affect any obligations that it may otherwise 

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

Rule 15c6–1 requires that most securities 

transactions be settled within three business days 

of the trade date. 

25Certain countries in which a Fund may invest 

have historically had settlement periods of up to 15 

calendar days. 

26Other feeder funds invested in any Master 

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

section 22(e) relief requested herein. 

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

redeemable security as any security, 

other than short-term paper, under the 

terms of which the holder, upon its 

presentation to the issuer, is entitled to 

receive approximately a proportionate 

share of the issuer’s current net assets, 

or the cash equivalent. Because Shares 

will not be individually redeemable, 

applicants request an order that would 

permit the Trust to register as an openend management investment company 

and issue Shares that are redeemable in 

Creation Units only.22 Applicants state 

that investors may purchase Shares in 

Creation Units from each Fund and that 

Creation Units will always be 

redeemable in accordance with the 

provisions of the Act. Applicants further 

state that because the market price of 

Shares will be disciplined by arbitrage 

opportunities, investors should be able 

to sell Shares in the secondary market 

at prices that do not vary materially 

from their NAV. 

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

1 Under the Act 

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

other things, prohibits a dealer from 

selling a redeemable security that is 

currently being offered to the public by 

or through a principal underwriter, 

except at a current public offering price 

described in the prospectus. Rule 22c– 

1 under the Act generally requires that 

a dealer selling, redeeming, or 

repurchasing a redeemable security do 

so only at a price based on its NAV. 

Applicants state that secondary market 

trading in Shares will take place at 

negotiated prices, not at a current 

offering price described in the 

Prospectus, and not at a price based on 

NAV. Thus, purchases and sales of 

Shares in the secondary market will not 

comply with section 22(d) of the Act 

and rule 22c–1 under the Act. 

Applicants request an exemption under 

section 6(c) from these provisions.23

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 the settlement of 

redemptions of Creation Units of the 

Foreign and Global Funds is contingent 

not only on the settlement cycle of the 

U.S. securities markets but also on the 

delivery cycles present in foreign 

markets for underlying foreign Portfolio 

Positions in which those Funds invest. 

Applicants have been advised that, 

under certain circumstances, the 

delivery cycles for transferring Portfolio 

Positions to redeeming investors, 

coupled with local market holiday 

schedules, will require a delivery 

process of up to fifteen (15) calendar 

days. Applicants therefore request relief 

from section 22(e) in order to provide 

payment or satisfaction of redemptions 

within a longer number of calendar days 

as required for such payment or 

satisfaction in the principal local 

markets where transactions in the 

Portfolio Positions of each Foreign and 

Global Fund customarily clear and 

settle, but in all cases no later than 

fifteen (15) days following the tender of 

a Creation Unit.24

8. Applicants state that section 22(e) 

was designed to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

Applicants assert that the protections 

intended to be afforded by Section 22(e) 

are adequately addressed by the 

proposed method and securities 

delivery cycles for redeeming Creation 

Units. Applicants state that allowing 

redemption payments for Creation Units 

of a Fund to be made within a 

maximum of fifteen (15) calendar days25

would not be inconsistent with the 

spirit and intent of section 22(e).26

Applicants represent that each Fund’s 

Prospectus and/or SAI will identify 

those instances in a given year where, 

due to local holidays, more than seven 

calendar days, up to a maximum of 

fifteen (15) calendar days, will be 

needed to deliver redemption proceeds 

and will list such holidays. Applicants 

are not seeking relief from section 22(e) 

with respect to Foreign and Global 

Funds that do not effect redemptions inkind. 

Section 12(d)(1) of the Act 

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

prohibits a registered investment 

company from acquiring shares of an 

investment company if the securities 

represent more than 3% of the total 

outstanding voting stock of the acquired 

company, more than 5% of the total 

assets of the acquiring company, or, 

together with the securities of any other 

investment companies, more than 10% 

of the total assets of the acquiring 

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

prohibits a registered open-end 

investment company, its principal 

underwriter, or any other broker or 

dealer from selling its shares to another 

investment company if the sale will 

cause the acquiring company to own 

more than 3% of the acquired 

company’s voting stock, or if the sale 

will cause more than 10% of the 

acquired company’s voting stock to be 

owned by investment companies 

generally. 

10. Applicants request relief to permit 

Acquiring Funds to acquire Shares in 

excess of the limits in section 

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

Funds, their principal underwriters and 

any Broker to sell Shares to Acquiring 

Funds in excess of the limits in section 

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27An ‘‘Acquiring Fund Affiliate’’ is any 

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

underwriter of an Acquiring Fund, and any person 

controlling, controlled by or under common control 

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

investment adviser, promoter, or principal 

underwriter of a Fund or any person controlling, 

controlled by or under common control with any 

of these entities. 

28Any reference to NASD Conduct Rule 2830 

includes any successor or replacement rule that 

may be adopted by the Financial Industry 

Regulatory Authority. 

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

that the proposed conditions to the 

requested relief address the concerns 

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

which include concerns about undue 

influence, excessive layering of fees and 

overly complex structures. 

11. Applicants submit that their 

proposed conditions address concerns 

regarding the potential for undue 

influence. To limit the control that an 

Acquiring Fund may have over a Fund, 

applicants propose a condition 

prohibiting the adviser of an Acquiring 

Management Company (‘‘Acquiring 

Fund Advisor’’), sponsor of an 

Acquiring Trust (‘‘Sponsor’’), any 

person controlling, controlled by, or 

under common control with the 

Acquiring Fund Advisor or Sponsor, 

and any investment company or issuer 

that would be an investment company 

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

Act that is advised or sponsored by the 

Acquiring Fund Advisor, the Sponsor, 

or any person controlling, controlled by, 

or under common control with the 

Acquiring Fund Advisor or Sponsor 

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

from controlling (individually or in the 

aggregate) a Fund within the meaning of 

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

prohibition would apply to any subadviser to an Acquiring Fund 

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

person controlling, controlled by or 

under common control with the 

Acquiring Fund Sub-Advisor, and any 

investment company or issuer that 

would be an investment company but 

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

(or portion of such investment company 

or issuer) advised or sponsored by the 

Acquiring Fund Sub-Advisor or any 

person controlling, controlled by or 

under common control with the 

Acquiring Fund Sub-Advisor 

(‘‘Acquiring Fund’s Sub-Advisory 

Group’’). 

12. Applicants propose a condition to 

ensure that no Acquiring Fund or 

Acquiring Fund Affiliate 27 (except to 

the extent it is acting in its capacity as 

an investment adviser to a Fund) will 

cause a Fund to purchase a security in 

an offering of securities during the 

existence of an underwriting or selling 

syndicate of which a principal 

underwriter is an Underwriting Affiliate 

(‘‘Affiliated Underwriting’’). An 

‘‘Underwriting Affiliate’’ is a principal 

underwriter in any underwriting or 

selling syndicate that is an officer, 

director, member of an advisory board, 

Acquiring Fund Advisor, Acquiring 

Fund Sub-Advisor, employee or 

Sponsor of the Acquiring Fund, or a 

person of which any such officer, 

director, member of an advisory board, 

Acquiring Fund Advisor, Acquiring 

Fund Sub-Advisor, employee or 

Sponsor is an affiliated person (except 

any person whose relationship to the 

Fund is covered by section 10(f) of the 

Act is not an Underwriting Affiliate). 

13. Applicants propose several 

conditions to address the potential for 

layering of fees. Applicants note that the 

Board of any Acquiring Management 

Company, including a majority of the 

directors or trustees who are not 

‘‘interested persons’’ within the 

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

(for any Board, the ‘‘Independent 

Trustees’’), will be required to find that 

the advisory fees charged under the 

contract are based on services provided 

that will be in addition to, rather than 

duplicative of, services provided under 

the advisory contract of any Fund in 

which the Acquiring Management 

Company may invest. Applicants also 

state that any sales charges and/or 

service fees charged with respect to 

shares of an Acquiring Fund will not 

exceed the limits applicable to a fund of 

funds as set forth in NASD Conduct 

Rule 2830.28

14. Applicants submit that the 

proposed arrangement will not create an 

overly complex fund structure. 

Applicants note that a Fund will be 

prohibited from acquiring securities of 

any investment company or company 

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

the Act in excess of the limits contained 

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

to the extent permitted by exemptive 

relief from the Commission permitting 

the Fund to purchase shares of other 

investment companies for short-term 

cash management purposes. 

15. To ensure that an Acquiring Fund 

is aware of the terms and conditions of 

the requested order, the Acquiring 

Funds must enter into an agreement 

with the respective Funds (‘‘Acquiring 

Fund Agreement’’). The Acquiring Fund 

Agreement will include an 

acknowledgement from the Acquiring 

Fund that it may rely on the order only 

to invest in a Fund and not in any other 

investment company. 

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). 

Section 17(a) 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 person 

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

any security to or purchasing any 

security from the company. Section 

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

person’’ to include any person directly 

or indirectly owning, controlling, or 

holding with power to vote 5% or more 

of the outstanding voting securities of 

the other person and any person directly 

or indirectly controlling, controlled by, 

or under common control with, the 

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

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

exercise a controlling influence over the 

management or policies’’ of the fund 

and provides that a control relationship 

will be presumed where one person 

owns more than 25% of another 

person’s voting securities. The Funds 

may be deemed to be controlled by the 

Adviser or an entity controlling, 

controlled by or under common control 

with the Adviser and hence affiliated 

persons of each other. In addition, the 

Funds may be deemed to be under 

common control with any other 

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29Applicants anticipate that most Acquiring 

Funds will purchase Shares in the secondary 

market and will not purchase or redeem Creation 

Units directly from a Fund. To the extent that 

purchases and sales of Shares occur in the 

secondary market and not through principal 

transactions directly between an Acquiring Fund 

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

necessary. However, the requested relief would 

apply to direct sales of Shares in Creation Units by 

a Fund to an Acquiring Fund and redemptions of 

those Shares in Creation Units. The requested relief 

is intended to cover transactions that would 

accompany such sales and redemptions. Applicants 

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

requested relief will not apply to, transactions 

where a Fund could be deemed an affiliated person, 

or an affiliated person of an affiliated person of an 

Acquiring Fund because an investment adviser to 

the Funds is also an investment adviser to that 

Acquiring Fund. 

30Applicants acknowledge that the receipt of 

compensation by (a) an affiliated person of an 

Acquiring Fund, or an affiliated person of such 

person, for the purchase by the Acquiring Fund of 

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

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

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

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

The Acquiring Fund Agreement also will include 

this acknowledgment. 

registered investment company (or 

series thereof) advised by the Adviser or 

an entity controlling, controlled by or 

under common control with the Adviser 

(an ‘‘Affiliated Fund’’). 

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 from the 

Funds by persons that are affiliated 

persons or Second Tier Affiliates of the 

Funds solely by virtue of one or more 

of the following: (a) Holding 5% or 

more, or more than 25%, of the Shares 

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

having an affiliation with a person with 

an ownership interest described in (a); 

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

25%, of the shares of one or more 

Affiliated Funds. Applicants also 

request an exemption in order to permit 

each Fund to sell Shares to and redeem 

Shares from, and engage in the in-kind 

transactions that would accompany 

such sales and redemptions with, any 

Acquiring Fund of which the Fund is an 

affiliated person or Second-Tier 

Affiliate.29

19. Applicants assert that no useful 

purpose would be served by prohibiting 

such affiliated persons or Second Tier 

Affiliates from making in-kind 

purchases or in-kind redemptions of 

Shares of a Fund in Creation Units. Both 

the deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions will be the same for all 

purchases and redemptions. Deposit 

Instruments and Redemption 

Instruments will be valued in the same 

manner as those Portfolio Positions 

currently held by the relevant Funds, or 

their respective Master Funds, and the 

valuation of the Deposit Instruments 

and Redemption Instruments will be 

made in an identical manner regardless 

of the identity of the purchaser or 

redeemer. Applicants do not believe 

that in-kind purchases and redemptions 

will result in abusive self-dealing or 

overreaching of the Fund. 

20. Applicants also submit that the 

sale of Shares to and redemption of 

Shares from an Acquiring Fund satisfies 

the standards for relief under sections 

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

note that any consideration paid for the 

purchase or redemption of Shares 

directly from a Fund will be based on 

the NAV of the Fund.30 The Acquiring 

Fund Agreement will require any 

Acquiring Fund that purchases Creation 

Units directly from a Fund to represent 

that the purchase will be in compliance 

with its investment restrictions and 

consistent with the investment policies 

set forth in its registration statement. 

21. 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, where 

applicable, Acquiring Fund, and the 

proposed transactions are consistent 

with the general purposes of the Act; 

and (b) with respect to the relief 

requested pursuant to section 6(c), the 

requested exemption for the proposed 

transactions is appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. 

Applicants’ Conditions 

Applicants agree that any order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

A. Actively-Managed Exchange-Traded 

Fund Relief 

1. Neither the Trust nor any Fund will 

be advertised or marketed as an openend investment company or mutual 

fund. Any advertising material that 

describes the purchase or sale of 

Creation Units or refers to redeemability 

will prominently disclose that the 

Shares are not individually redeemable 

and that owners of the Shares may 

acquire those Shares from the Fund and 

tender those Shares for redemption to 

the Fund in Creation Units only. 

2. The Web site, which is and will be 

publicly accessible at no charge, will 

contain, on a per Share basis for each 

Fund, the prior Business Day’s NAV and 

the market closing price or Bid/Ask 

Price, and a calculation of the premium 

or discount of the market closing price 

or Bid/Ask Price against such NAV. 

3. As long as a Fund operates in 

reliance on the requested order, its 

Shares will be listed on a Listing 

Market. 

4. On each Business Day, before 

commencement of trading in Shares on 

a Fund’s Listing Market, the Fund will 

disclose on the Web site the identities 

and quantities of the Portfolio Positions 

held by the Fund, or its respective 

Master Fund, that will form the basis for 

the Fund’s calculation of NAV per Share 

at the end of the Business Day. 

5. The Adviser or any Sub-Advisers, 

directly or indirectly, will not cause any 

Authorized Participant (or any investor 

on whose behalf an Authorized 

Participant may transact with the Fund) 

to acquire any Deposit Instrument for a 

Fund, or its respective Master Fund, 

through a transaction in which the 

Fund, or its respective Master Fund, 

could not engage directly. 

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6. The requested relief to permit ETF 

operations will expire on the effective 

date of any Commission rule under the 

Act that provides relief permitting the 

operation of actively-managed 

exchange-traded funds, other than the 

Master-Feeder Relief. 

B. Section 12(d)(1) Relief 

7. The members of an Acquiring 

Fund’s Advisory Group will not control 

(individually or in the aggregate) a 

Fund, or its respective Master Fund, 

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

the Act. The members of an Acquiring 

Fund’s Sub-Advisory Group will not 

control (individually or in the aggregate) 

a Fund, 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 Acquiring Fund’s Advisory 

Group or the Acquiring Fund’s SubAdvisory Group, each in the aggregate, 

becomes a holder of more than 25 

percent of the outstanding voting 

securities of a Fund, it will vote its 

Shares of the Fund in the same 

proportion as the vote of all other 

holders of that Fund’s Shares. This 

condition does not apply to the 

Acquiring Fund’s Sub-Advisory Group 

with respect to a Fund, or its respective 

Master Fund, for which the Acquiring 

Fund Sub-Advisor or a person 

controlling, controlled by, or under 

common control with the Acquiring 

Fund Sub-Advisor acts as the 

investment adviser within the meaning 

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

8. No Acquiring Fund or Acquiring 

Fund Affiliate will cause any existing or 

potential investment by the Acquiring 

Fund in a Fund to influence the terms 

of any services or transactions between 

the Acquiring Fund or an Acquiring 

Fund Affiliate and the Fund, or its 

respective Master Fund, or a Fund 

Affiliate. 

9. The Board of an Acquiring 

Management Company, including a 

majority of the Independent Trustees, 

will adopt procedures reasonably 

designed to ensure that the Acquiring 

Fund Advisor and any Acquiring Fund 

Sub-Advisor are conducting the 

investment program of the Acquiring 

Management Company without taking 

into account any consideration received 

by the Acquiring Management Company 

or an Acquiring Fund Affiliate from a 

Fund, or its respective Master Fund, or 

a Fund Affiliate in connection with any 

services or transactions. 

10. Once an investment by an 

Acquiring Fund in Shares exceeds the 

limits 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 Trustees, 

will determine that any consideration 

paid by the Fund, or its respective 

Master Fund, to an Acquiring Fund or 

an Acquiring Fund Affiliate in 

connection with any services or 

transactions: (i) Is fair and reasonable in 

relation to the nature and quality of the 

services and benefits received by the 

Fund, or its respective Master 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, 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). 

11. No Acquiring Fund or Acquiring 

Fund Affiliate (except to the extent it is 

acting in its capacity as an investment 

adviser to a Fund) will cause the Fund, 

or its respective Master Fund, to 

purchase a security in any Affiliated 

Underwriting. 

12. The Board of a Fund, or its 

respective Master Fund, including a 

majority of the Independent Trustees, 

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 an 

Acquiring Fund in the securities of the 

Fund exceeds the limit of section 

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

purchases made directly from an 

Underwriting Affiliate. The Board of the 

Fund will review these purchases 

periodically, but no less frequently than 

annually, to determine whether the 

purchases were influenced by the 

investment by the Acquiring Fund in 

the Fund. The Board of the Fund will 

consider, among other things: (i) 

Whether the purchases were consistent 

with the investment objectives and 

policies of the Fund, 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 of the Fund will take any 

appropriate actions based on its review, 

including, if appropriate, the institution 

of procedures designed to ensure that 

purchases of securities in Affiliated 

Underwritings are in the best interest of 

shareholders of the Fund. 

13. Each Fund, 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 an Acquiring 

Fund in the securities of the Fund 

exceeds the limit of section 

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

from whom the securities were 

acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the determinations of the Board of the 

Fund were made. 

14. Before investing in Shares of a 

Fund in excess of the limits in section 

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

the Fund will execute an Acquiring 

Fund Agreement stating, without 

limitation, that their Boards and their 

investment adviser(s), or their Sponsors 

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

understand the terms and conditions of 

the requested order, and agree to fulfill 

their responsibilities under the 

requested order. At the time of its 

investment in Shares of a Fund in 

excess of the limit in section 

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

notify the Fund of the investment. At 

such time, the Acquiring Fund will also 

transmit to the Fund a list of the names 

of each Acquiring Fund Affiliate and 

Underwriting Affiliate. The Acquiring 

Fund will notify the Fund of any 

changes to the list of the names as soon 

as reasonably practicable after a change 

occurs. The Fund and the Acquiring 

Fund will maintain and preserve a copy 

of the requested order, the Acquiring 

Fund Agreement, and the list with any 

updated information for the duration of 

the investment and for a period of not 

less than six years thereafter, the first 

two years in an easily accessible place. 

15. The Acquiring Fund Advisor, 

Trustee or Sponsor, as applicable, will 

waive fees otherwise payable to it by the 

Acquiring Fund in an amount at least 

equal to any compensation (including 

fees received pursuant to any plan 

adopted under rule 12b–1 under the 

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12534 Federal Register / Vol. 80, No. 45 / Monday, March 9, 2015 / Notices 

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

2 17 CFR 240.19b–4. 

3Market participants pay the same fees regardless 

of whether they choose to connect to both 

exchanges or solely to the ISE. 

4 15 U.S.C. 78f. 

5 15 U.S.C. 78f(b)(4). 

Act) received from the Fund, or its 

respective Master Fund, by the 

Acquiring Fund Advisor, Trustee or 

Sponsor, or an affiliated person of the 

Acquiring Fund Advisor, Trustee or 

Sponsor, other than any advisory fees 

paid to the Acquiring Fund Advisor, 

Trustee or Sponsor, or its affiliated 

person by the Fund, or its respective 

Master Fund, in connection with the 

investment by the Acquiring Fund in 

the Fund. Any Acquiring Fund SubAdvisor will waive fees otherwise 

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

Acquiring Management Company in an 

amount at least equal to any 

compensation received from a Fund, or 

its respective Master Fund, by the 

Acquiring Fund Sub-Advisor, or an 

affiliated person of the Acquiring Fund 

Sub-Advisor, other than any advisory 

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

Fund, or its respective Master Fund, in 

connection with any investment by the 

Acquiring Management Company in the 

Fund made at the direction of the 

Acquiring Fund Sub-Advisor. In the 

event that the Acquiring Fund SubAdvisor waives fees, the benefit of the 

waiver will be passed through to the 

Acquiring Management Company. 

16. Any sales charges and/or service 

fees charged with respect to shares of an 

Acquiring Fund will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

17. No Fund, or its respective Master 

Fund, will acquire securities of any 

other investment company or company 

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

the Act in excess of the limits contained 

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

to the extent (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 Master–Feeder 

Relief. 

18. Before approving any advisory 

contract under section 15 of the Act, the 

Board of each Acquiring Management 

Company, including a majority of the 

Independent Trustees, will find that the 

advisory fees charged under such 

advisory contract are based on services 

provided that will be in addition to, 

rather than duplicative of, the services 

provided under the advisory contract(s) 

of any Fund, or its respective Master 

Fund, in which the Acquiring 

Management Company may invest. 

These findings and their basis will be 

recorded fully in the minute books of 

the appropriate Acquiring Management 

Company. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–05288 Filed 3–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74417; File No. SR–ISE– 

2015–06] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Amend the Schedule of 

Fees 

March 3, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

18, 2015, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change, as described 

in Items I, II, and III below, which items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The ISE proposes to amend its 

Schedule of Fees to increase certain 

network and gateway fees. The text of 

the proposed rule change is available on 

the Exchange’s Web site (http://

www.ise.com), at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Schedule of Fees 

to increase certain network and gateway 

fees. The Exchange charges an Ethernet 

fee for its four different Ethernet 

connection options, which is $750 per 

month for a 1 Gigabit (‘‘Gb’’) 

connection, $4,000 per month for a 10 

Gb connection, $7,000 per month for a 

10 Gb low latency connection, and 

$12,500 per month for a 40 Gb low 

latency connection. These Ethernet 

connectivity options provide access to 

both the ISE and the ISE’s sister 

exchange, ISE Gemini, LLC (‘‘ISE 

Gemini’’).3 The Exchange proposes to 

increase these Ethernet fees to $1,000 

per month for the 1 Gb connection, 

$4,500 per month for the 10 Gb 

connection, $8,000 per month for the 10 

Gb low latency connection, and $15,000 

per month for the 40 Gb low latency 

connection. In addition, the Exchange 

offers both shared and dedicated 

gateways to facilitate member access to 

ISE and ISE Gemini for a single fee. The 

Exchange charges members a monthly 

gateway fee of $500 per gateway for a 

shared gateway or $2,000 per gateway 

pair for members that elect to use their 

own dedicated gateways as an 

alternative to using shared gateways. 

The Exchange proposes to increase the 

gateway fee to $750 per month for a 

shared gateway and $2,250 per month 

for a dedicated gateway pair. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,4

in general, and Section 6(b)(4) of the 

Act,5 in particular, in that it is designed 

to provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and other persons 

using its facilities. The Exchange 

believes that it is reasonable and 

equitable to increase the network and 

gateway fees described in this filing as 

the new fees are more in line with the 

Exchange’s current connectivity costs, 

including costs for software and 

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