Federal Register / Vol. 80, No. 52 / Wednesday, March 18, 2015 / Notices 14189 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(2). 

10 15 U.S.C. 78s(b)(2)(B). 11 17 CFR 200.30–3(a)(12). 

competitive standing in the financial 

markets. 

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed 

rule change reflects this competitive 

environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) of the Act 8 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder,9 because it establishes a 

due, fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) of the Act 10 to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2015–13 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549. 

All submissions should refer to File 

Number SR–NYSEArca–2015–13. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEArca–2015–13 and should be 

submitted on or before April 8, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06125 Filed 3–17–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IA–4046/803–00224] 

T. Rowe Price Associates, Inc. and T. 

Rowe Price International Ltd; Notice of 

Application 

March 12, 2015. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

exemptive order under Section 206A of 

the Investment Advisers Act of 1940 

(the ‘‘Advisers Act’’) and Rule 206(4)– 

5(e) thereunder. 

Applicant: T. Rowe Price Associates, 

Inc. (‘‘TRPA’’) and T. Rowe Price 

International Ltd (‘‘TRPIL’’ and, together 

with TRPA, the ‘‘Advisers’’ or the 

‘‘Applicants’’). 

Relevant Advisers Act Sections: 

Exemption requested under Section 

206A of the Advisers Act and Rule 

206(4)–5(e) thereunder from Rule 

206(4)–5(a)(1) under the Advisers Act. 

Summary of Application: The 

Applicants request that the Commission 

issue an order under Section 206A of 

the Advisers Act and Rule 206(4)–5(e) 

thereunder exempting them from Rule 

206(4)–5(a)(1) under the Advisers Act to 

permit Applicants to receive 

compensation from certain government 

entities for investment advisory services 

provided to the government entities 

within the two-year period following a 

contribution by a covered associate of 

the Applicants to an official of the 

government entities. 

DATES: Filing Dates: The application was 

filed on May 6, 2014, and an amended 

and restated application was filed on 

October 29, 2014. 

Hearing or Notification of Hearing: An 

order granting the application will be 

issued unless the Commission orders a 

hearing. Interested persons may request 

a hearing by writing to the 

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 April 6, 2015, and 

should be accompanied by proof of 

service on the Applicants, in the form 

of an affidavit or, for lawyers, a 

certificate of service. Pursuant to Rule 

0–5 under the Advisers 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 may 

request notification of a hearing by 

writing to the Commission’s Secretary. 

ADDRESSES: Brent J. Fields, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. Applicants, TRPA and 

TRPIL, T. Rowe Price Associates, Inc., 

100 East Pratt Street, Baltimore, 

Maryland 21202. 

FOR FURTHER INFORMATION CONTACT: Kyle 

R. Ahlgren, Senior Counsel, or Melissa 

R. Harke, Branch Chief, at (202) 551– 

6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

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14190 Federal Register / Vol. 80, No. 52 / Wednesday, March 18, 2015 / Notices 

application. The complete application 

may be obtained via the Commission’s 

Web site either at http://www.sec.gov/

rules/iareleases.shtml or 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. 

Applicant’s Representations 

1. The Applicants are registered with 

the Commission as investment advisers 

under the Advisers Act. T. Rowe Price 

Group, Inc. (‘‘TRPG’’) is the parent 

company of both Applicants. The 

Applicants serve as adviser or 

subadviser to companies that are 

registered with the Commission as 

investment companies (‘‘RICs’’) under 

the Investment Company Act of 1940 

(the ‘‘1940 Act’’). In addition, TRPIL 

acts as an adviser to the T. Rowe Price 

Trust Company (‘‘TRPTC’’) in 

connection with assets of defined 

contribution and benefit plans of 

companies and governmental entities 

that are invested in the Emerging 

Markets Equity Trust Fund, a common 

trust fund exempt under Section 

3(c)(11) of the 1940 Act and of which 

TRPTC is the Trustee (the ‘‘Fund’’). 

Certain public pension plans that are 

government entities of Wisconsin (the 

‘‘Clients’’) have selected a RIC as an 

investment option for participants in 

participant-directed plans. One Client 

had been invested in the Fund since 

2003 but divested its investment by May 

2012. The investment decisions for the 

Clients are overseen by boards of 

trustees, and Gubernatorial appointees 

sit on these boards. Due to this power 

of appointment, the Governor is an 

‘‘official’’ of each Client under Rule 

206(4)–5(f)(6)(ii). The Governor, 

however, does not sit on any Client’s 

board or have any direct involvement in 

any Client’s investment decisions. 

2. Applicants represent that Michael 

McGonigle (the ‘‘Contributor’’) is a Vice 

President of TRPG and TRPA. He has 

been a director of credit research in the 

Fixed Income Division since 2010 and 

is a member of the Fixed Income 

Steering Committee. In his role as a 

director of credit research, he supervises 

approximately 15 research analysts in 

TRPA and eight research analysts in 

TRPIL, some of whom may occasionally 

meet with government entity clients or 

prospective clients, or with consultants 

for prospective clients. The Contributor 

is, therefore, a ‘‘covered associate’’ of 

TRPA and TRPIL, as defined in Rule 

206(4)–5(f)(2)(ii). The Advisers have 

identified only one meeting with a 

Wisconsin government entity client at 

which an analyst supervised by the 

Contributor was present since March 14, 

2011, the effective date of Rule 206(4)– 

5 (the ‘‘Rule’’). The Contributor has not 

participated in any such meetings with 

any state or local government entity 

client or prospective client of the 

Advisers since the effective date of the 

Rule. 

3. The recipient of the Contribution 

was Scott Walker (the ‘‘Official’’), the 

Governor of Wisconsin, who took office 

in January 2011. The Contribution was 

made on February 5, 2012 to the 

Official’s recall primary election 

campaign for the amount of $250 (the 

‘‘Contribution’’). The Wisconsin 

Campaign Finance Information System 

reported it as received by the campaign 

on February 26, 2012. Although not 

entitled to vote in Wisconsin elections, 

the Contributor was interested in the 

highly contentious and publicized recall 

election, given his political views that 

are in line with those of the Official. 

The Contributor remembers watching 

television coverage of the recall election 

and receiving telephone solicitations for 

political contributions during this time. 

To the best of the Contributor’s 

recollection, he made the Contribution 

pursuant to such a telephone 

solicitation. The Contributor has never 

met the Official or dealt with the 

Official in any capacity. The Contributor 

has never solicited or coordinated any 

contributions for or on behalf of the 

Official. The Contribution is consistent 

with other political contributions made 

by the Contributor (which were made 

prior to the effective date of the Rule). 

4. Applicants represent that the 

Clients’ relationship with the 

Applicants pre-dates the Contribution. 

The Adviser’s relationship with one 

Client dates back to at least 2003 when 

the Client invested in the Fund. This 

Client began withdrawing its investment 

from the Fund in 2011 and was fully 

divested in May 2012. The Clients with 

a RIC advised by the Advisers began 

their relationship with the Advisers in 

2005 and 2008. 

5. Applicants represent that at no time 

did any employees of the Applicants 

other than the Contributor have any 

knowledge of the Contribution prior to 

the Applicants’ legal department’s 

discovery of the Contribution. The 

Contribution was discovered in the 

course of compliance testing by the 

Advisers’ legal department on or around 

March 18, 2014. Subsequently, the 

Applicants and the Contributor obtained 

the Official’s agreement to return the 

full amount of the Contribution, which 

was returned on May 1, 2014. After 

identifying the Contribution, the 

Advisers established an escrow account 

and deposited in the account an amount 

equal to the sum of all fees paid to the 

Advisers, directly or indirectly, with 

respect to the Clients between February 

5, 2012 through February 26, 2014. The 

Advisers have notified the Client 

invested in the Fund, each affected RIC, 

and each Client that offers as an 

investment option in a participantdirected plan an affected RIC that is 

directly advised by the Advisers, of the 

Contribution and the resulting two-year 

prohibition on compensation absent 

exemptive relief from the Commission. 

The Advisers have informed such 

Clients and each affected RIC that the 

fees attributable to the Clients since the 

date of the Contribution through the 

two-year period were being placed in 

escrow and that, absent exemptive relief 

from the Commission, those fees would 

be distributed in a way that is 

permissible under applicable laws and 

the Rule. 

6. Applicants represent that the 

Advisers’ policies and procedures 

regarding pay-to-play (‘‘Pay-to-Play 

Policies and Procedures’’) in place at the 

time of the Contribution required all 

employees to pre-clear contributions to 

state and local officials and candidates. 

Employees must annually certify their 

compliance with the Advisers’ Code of 

Ethics, which describes the Advisers’ 

preclearance policy for political 

contributions, through an Annual 

Verification Questionnaire (the 

‘‘Questionnaire’’). The Questionnaire 

requires employees to certify their 

compliance with the Policy. The 

Contributor has completed his annual 

online training and Questionnaire 

certification each year since the 

effective date of the Rule. The legal 

department or specific business units of 

the Advisers also occasionally send 

reminder emails about the Policy. The 

Advisers have also started to include 

searches of public Web sites for 

contributions made by employees, and 

it was in the course of developing this 

testing program that the Contribution 

was discovered by the Advisers. 

7. Applicants represent that to the 

best of the Contributor’s recollection, 

the Contributor’s violation of 

Applicant’s Pay-to-Play Policies and 

Procedures resulted from his simply 

forgetting to pre-clear his contribution 

as required, due to his becoming 

impassioned about the recall election 

while watching televised reports about 

it and receiving a telephone solicitation 

while doing so. Applicants note that on 

May 31, 2012, pursuant to the Advisers’ 

policies and procedures, the Contributor 

requested pre-clearance from Advisers’ 

legal department to make a contribution 

to the Official’s campaign for the recall 

general election and received 

permission to make a $150 contribution. 

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Federal Register / Vol. 80, No. 52 / Wednesday, March 18, 2015 / Notices 14191 

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

2 17 CFR 240.19b–4. 

As noted above, however, the 

Contributor did not disclose the 

Contribution to the Applicants and the 

Applicants had no knowledge of the 

Contribution when the Contributor 

received approval for the May 31, 2012 

contribution for the recall general 

election. 

Applicant’s Legal Analysis 

1. Rule 206(4)–5(a)(1) under the 

Advisers Act prohibits a registered 

investment adviser from providing 

investment advisory services for 

compensation to a government entity 

within two years after a contribution to 

an official of the government entity is 

made by the investment adviser or any 

covered associate of the investment 

adviser. Each Client is a ‘‘government 

entity,’’ as defined in rule 206(4)–5(f)(5), 

the Contributor is a ‘‘covered associate’’ 

as defined in rule 206(4)–5(f)(2), and the 

Official is an ‘‘official’’ as defined in 

rule 206(4)–5(f)(6). Rule 206(4)–5(c) 

provides that when a government entity 

invests in a covered investment pool, 

the investment adviser to that covered 

investment pool is treated as providing 

advisory services directly to the 

government entity. The RICs and the 

Funds are ‘‘covered investment pools,’’ 

as defined in rule 206(4)–5(f)(3). 

2. Section 206A of the Advisers Act 

grants the Commission the authority to 

‘‘conditionally or unconditionally 

exempt any person or transaction . . . 

from any provision or provisions of [the 

Advisers Act] or of any rule or 

regulation thereunder, if and to the 

extent that such exemption is necessary 

or appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

[the Advisers Act].’’ 

3. Rule 206(4)–5(e) provides that the 

Commission may exempt an investment 

adviser from the prohibition under Rule 

206(4)–5(a)(1) upon consideration of the 

factors listed below, among others: 

(1) Whether the 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 Advisers Act; 

(2) Whether the investment adviser: 

(i) Before the contribution resulting in 

the prohibition was made, adopted and 

implemented policies and procedures 

reasonably designed to prevent 

violations of the rule; and (ii) prior to or 

at the time the contribution which 

resulted in such prohibition was made, 

had no actual knowledge of the 

contribution; and (iii) after learning of 

the contribution: (A) Has taken all 

available steps to cause the contributor 

involved in making the contribution 

which resulted in such prohibition to 

obtain a return of the contribution; and 

(B) has taken such other remedial or 

preventive measures as may be 

appropriate under the circumstances; 

(3) Whether, at the time of the 

contribution, the contributor was a 

covered associate or otherwise an 

employee of the investment adviser, or 

was seeking such employment; 

(4) The timing and amount of the 

contribution which resulted in the 

prohibition; 

(5) The nature of the election (e.g., 

federal, state or local); and 

(6) The contributor’s apparent intent 

or motive in making the contribution 

which resulted in the prohibition, as 

evidenced by the facts and 

circumstances surrounding such 

contribution. 

4. The Applicants request an order 

pursuant to section 206A and rule 

206(4)–5(e), exempting them from the 

two-year prohibition on compensation 

imposed by rule 206(4)–5(a)(1) with 

respect to investment advisory services 

provided to the Clients within the twoyear period following the Contribution. 

5. The Applicants submit that the 

exemption is necessary and 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. The 

Applicants further submit that the other 

factors set forth in Rule 206(4)–5 

similarly weigh in favor of granting an 

exemption to the Applicants to avoid 

consequences disproportionate to the 

violation. The Applicants note that 

causing the Advisers to serve without 

compensation for a two-year period 

could result in a financial loss that is 

approximately 24,000 times the amount 

of the Contribution. 

6. The Applicants represent that 

neither the Advisers nor the Contributor 

sought to interfere with the Clients’ 

merit-based selection process for 

advisory services, nor did they seek to 

negotiate higher fees or greater ancillary 

benefits than would be achieved in 

arms’-length transactions. The 

Applicants note that the Advisers’ 

relationship with the Clients pre-date 

the Contribution, and that one Client 

divested its investment in the Fund 

shortly after the Contribution. The 

Applicants represent that they have no 

reason to believe that the Contribution 

undermined the integrity of the market 

for advisory services or resulted in a 

violation of the public trust in the 

process for awarding contracts. 

7. The Applicants note that the 

Advisers adopted and implemented 

pay-to-play policies and procedures on 

the Rule’s effective date, March 14, 2011 

that are fully compliant with the Rule’s 

requirements. The Applicants further 

note that the Advisers began developing 

compliance testing that includes 

random searches of public campaign 

databases for contributions by 

employees. The Applicants represent 

that at no time did any employees of the 

Advisers other than the Contributor 

have any actual knowledge that the 

Contribution had been made prior to its 

discovery by the Advisers in March 

2014. The Applicants further represent 

that the Advisers and the Contributor 

obtained the Official’s agreement to 

return the Contribution, which was 

subsequently returned, and the Advisers 

established an escrow account for all 

fees attributable to the Clients’ 

relationships with the Advisers accrued 

between February 5, 2012 and February 

26, 2014. 

8. The Applicants state that the 

Contributor’s apparent intent in making 

the Contribution was not to influence 

the selection or retention of the 

Advisers, and that the Contribution was 

consistent with prior political donations 

made by the Contributor in support of 

other candidates who share the political 

views of the Official. 

9. The Applicants represent that the 

Contributor has had no direct contact or 

involvement with any of the Clients, 

and that the Contributor’s only indirect 

involvement with one of the Clients was 

through a single meeting at which a 

research analyst who reported to the 

Contributor met with the Client. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06110 Filed 3–17–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74484; File No. SR–BATS– 

2015–20] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

March 12, 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 March 2, 

2015, BATS Exchange, Inc. (the 

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