Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices 19709 

14 17 CFR 200.30–3(a)(12). 

1The only existing registered closed-end 

investment company that currently intends to rely 

on the order has been named as an applicant. 

Applicants request that the order also apply to each 

other registered closed-end investment company 

advised or to be advised in the future by Sprott 

Asset or by an entity controlling, controlled by, or 

under common control (within the meaning of 

section 2(a)(9) of the Act) with Sprott Asset 

(including any successor in interest) (each such 

entity, including Sprott Asset, the ‘‘Adviser’’) that 

in the future seeks to rely on the order (such 

investment companies, together with the Existing 

Fund, are collectively, the ‘‘Funds’’ and 

individually, a ‘‘Fund’’). Any Fund that may rely 

on the order in the future will comply with the 

terms and conditions of the application. A 

successor in interest is limited to entities that result 

from a reorganization into another jurisdiction or a 

change in the type of business organization. 

2Royce Focus Trust, Inc., et al., Investment 

Company Act Release Nos. 30447 (April 4, 2013) 

(notice) and 30499 (April 30, 2013) (order). The 

Existing Fund is seeking the requested order 

because it may no longer rely on this prior order 

as a result of the change of its investment adviser 

from Royce & Associates, LLC to Sprott Asset. 

3The Existing Fund currently has no outstanding 

preferred stock. 

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–BATS– 

2015–26, and should be submitted on or 

before May 4, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08337 Filed 4–10–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31548; File No. 812–14437] 

Sprott Focus Trust, Inc. and Sprott 

Asset Management LP; Notice of 

Application 

April 7, 2015. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application under 

section 6(c) of the Investment Company 

Act of 1940 (‘‘Act’’) for an exemption 

from section 19(b) of the Act and rule 

19b–1 under the Act. 

Applicants: Sprott Focus Trust, Inc. 

(the ‘‘Existing Fund’’) and Sprott Asset 

Management LP (‘‘Sprott Asset’’). 

Summary of Application: Applicants 

request an order to permit certain 

registered closed-end investment 

companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common stock as frequently as monthly 

in any one taxable year, and as 

frequently as distributions are specified 

by or in accordance with the terms of 

any outstanding preferred stock that 

such investment companies may issue. 

Filing Date: The application was filed 

on March 27, 2015. 

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 May 1, 2015 and should 

be accompanied by proof of service on 

applicants, in the form of an affidavit or, 

for lawyers, a certificate of service. 

Pursuant to rule 0–5 under the Act, 

hearing requests should state the nature 

of the writer’s interest, any facts bearing 

upon the desirability of a hearing on the 

matter, the reason for the request, and 

the issues contested. Persons who wish 

to be notified of a hearing may request 

notification by writing to the 

Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090; 

Applicants, Bibb L. Strench, Esq., 

Seward & Kissel LLP, 901 K Street NW., 

Washington, DC 20001. 

FOR FURTHER INFORMATION CONTACT: 

Mark N. Zaruba, Senior Counsel, at 

(202) 551–6878, or Mary Kay Frech, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

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

calling (202) 551–8090. 

Applicants’ Representations 

1. The Existing Fund is a Maryland 

corporation registered under the Act as 

a closed-end management investment 

company.1 The Existing Fund’s 

investment goal is long-term capital 

growth, which it seeks to achieve by 

investing in equity securities and nonconvertible fixed income securities. 

Shares of the common stock of the 

Existing Fund are listed and traded on 

the NASDAQ Global Select Market. The 

Existing Fund had issued preferred 

stock all of which was redeemed on 

November 15, 2012. Applicants believe 

that investors in closed-end funds may 

prefer an investment vehicle that 

provides regular current income through 

fixed distribution policies that would be 

available through a Distribution Policy 

(as defined below). 

2. Sprott Asset, a limited partnership 

organized under the laws of Canada, is 

registered under the Investment 

Advisers Act of 1940 (the ‘‘Advisers 

Act’’) as an investment adviser. Sprott 

Asset provides investment advisory 

services to the Existing Fund. Each 

Adviser to a Fund will be registered as 

an investment adviser under the 

Advisers Act. Sprott Asset has engaged 

Sprott Asset Management USA Inc., 

which is registered as an investment 

adviser under the Advisers Act, as subadviser for the Existing Fund. 

3. Pursuant to a prior order,2 the 

Existing Fund has established a periodic 

payout policy of paying quarterly 

distributions on its common stock.3 To 

maintain certainty for the distribution 

policy of the Existing Fund and the 

distribution policies that other Funds 

may adopt in the future (each, a 

‘‘Distribution Policy’’), applicants 

request an order to permit each Fund to 

make periodic distributions that include 

long-term capital gains as frequently as 

12 times in any one taxable year in 

respect of its common stock and as often 

as specified by, or determined in 

accordance with the terms of, any 

preferred stock issued. 

4. Applicants state that prior to a 

Fund’s implementing a Distribution 

Policy in reliance on the requested 

order, the board of directors (the 

‘‘Board’’) of such Fund, including a 

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19710 Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices 

majority of the directors who are not 

‘‘interested persons’’ of the Fund, as 

defined in section 2(a)(19) of the Act 

(the ‘‘Independent Directors’’), will 

request, and the Adviser will provide, 

such information as is reasonably 

necessary to make an informed 

determination of whether the Board 

should adopt a proposed Distribution 

Policy. In the case of the Existing Fund, 

the Board approved a Distribution 

Policy substantially similar to the 

distribution policy that had been in 

place prior to the date of the 

application. In particular, the Board and 

the Independent Directors will review 

information regarding the purpose and 

terms of the Distribution Policy; the 

likely effects of the policy on the Fund’s 

long-term total return (in relation to 

market price and its net asset value per 

share of common stock (‘‘NAV’’)); the 

expected relationship between the 

Fund’s distribution rate on its common 

stock under the policy and the Fund’s 

total return (in relation to NAV); 

whether the rate of distribution would 

exceed such Fund’s expected total 

return in relation to its NAV; and any 

foreseeable material effects of the policy 

on the Fund’s long-term total return (in 

relation to market price and NAV). The 

Independent Directors also will 

consider what conflicts of interest the 

Adviser and the affiliated persons of the 

Adviser and the Fund might have with 

respect to the adoption or 

implementation of the Distribution 

Policy. Applicants state that, only after 

considering such information will the 

Board, including the Independent 

Directors, of each Fund approve a 

Distribution Policy and in connection 

with such approval will determine that 

the Distribution Policy is consistent 

with a Fund’s investment objectives and 

in the best interests of the holders of the 

Fund’s common stock. 

5. Applicants state that the purpose of 

a Distribution Policy, generally, would 

be to permit a Fund to distribute over 

the course of each year, through 

periodic distributions in relatively equal 

amounts (plus any required special 

distributions), an amount closely 

approximating the total taxable income 

of such Fund during such year and, if 

so determined by its Board, all or a 

portion of returns of capital paid by 

portfolio companies to such Fund 

during the year. Under the Distribution 

Policy of a Fund, such Fund would 

distribute to its respective common 

stockholders a fixed percentage of the 

market price of such Fund’s common 

stock at a particular point in time or a 

fixed percentage of NAV at a particular 

time or a fixed amount per share of 

common stock, any of which may be 

adjusted from time to time. It is 

anticipated that under a Distribution 

Policy, the minimum annual 

distribution rate with respect to such 

Fund’s common stock would be 

independent of the Fund’s performance 

during any particular period but would 

be expected to correlate with the Fund’s 

performance over time. Except for 

extraordinary distributions and 

potential increases or decreases in the 

final dividend periods in light of a 

Fund’s performance for an entire 

calendar year and to enable the Fund to 

comply with the distribution 

requirements of Subchapter M of the 

Internal Revenue Code (‘‘Code’’) for the 

calendar year, each distribution on the 

Fund’s common stock would be at the 

stated rate then in effect. 

6. Applicants state that prior to the 

implementation of a Distribution Policy 

for any Fund in reliance on the order, 

the Board of such Fund will have 

adopted policies and procedures under 

rule 38a–1 under the Act that: (i) Are 

reasonably designed to ensure that all 

notices required to be sent to the Fund’s 

stockholders pursuant to section 19(a) of 

the Act, rule 19a–1 thereunder and 

condition 4 below (each a ‘‘19(a) 

Notice’’) include the disclosure required 

by rule 19a–1 under the Act and by 

condition 2(a) below, and that all other 

written communications by the Fund or 

its agents regarding distributions under 

the Distribution Policy include the 

disclosure required by condition 3(a) 

below; and (ii) require the Fund to keep 

records that demonstrate its compliance 

with all of the conditions of the order 

and that are necessary for such Fund to 

form the basis for, or demonstrate the 

calculation of, the amounts disclosed in 

its 19(a) Notices. 

Applicants’ Legal Analysis 

1. Section 19(b) of the Act generally 

makes it unlawful for any registered 

investment company to make long-term 

capital gains distributions more than 

once every twelve months. Rule 19b–1 

limits the number of capital gains 

dividends, as defined in section 

852(b)(3)(C) of the Code 

(‘‘distributions’’), that a fund may make 

with respect to any one taxable year to 

one, plus a supplemental distribution 

made pursuant to section 855 of the 

Code not exceeding 10% of the total 

amount distributed for the year, plus 

one additional capital gain dividend 

made in whole or in part to avoid the 

excise tax under section 4982 of the 

Code. 

2. Section 6(c) of the Act provides, in 

relevant part, that the Commission may 

exempt any person or transaction from 

any provision of the Act 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. 

3. Applicants state that the one of the 

concerns leading to the enactment of 

section 19(b) and adoption of rule 19b– 

1 was that stockholders might be unable 

to distinguish between frequent 

distributions of capital gains and 

dividends from investment income. 

Applicants state, however, that rule 

19a–1 effectively addresses this concern 

by requiring that distributions (or the 

confirmation of the reinvestment 

thereof) estimated to be sourced in part 

from capital gains or capital be 

accompanied by a separate statement 

showing the sources of the distribution 

(e.g., estimated net income, net shortterm capital gains, net long-term capital 

gains and/or return of capital). 

Applicants state that similar 

information is included in the Funds’ 

annual reports to stockholders and on 

the Internal Revenue Service Form 

1099–DIV, which is sent to each 

common and preferred stockholder who 

received distributions during a 

particular year. 

4. Applicants further state that each 

Fund will make the additional 

disclosures required by the conditions 

set forth below, and each Fund will 

adopt compliance policies and 

procedures in accordance with rule 

38a–1 under the Act to ensure that all 

required 19(a) Notices and disclosures 

are sent to stockholders. Applicants 

state that the information required by 

section 19(a), rule 19a–1, the 

Distribution Policy, the policies and 

procedures under rule 38a–1 noted 

above, and the conditions listed below 

will help ensure that each Fund’s 

stockholders are provided sufficient 

information to understand that their 

periodic distributions are not tied to a 

Fund’s net investment income (which 

for this purpose is the Fund’s taxable 

income other than from capital gains) 

and realized capital gains to date, and 

may not represent yield or investment 

return. Accordingly, applicants assert 

that continuing to subject the Funds to 

section 19(b) and rule 19b–1 would 

afford stockholders no extra protection. 

5. Applicants note that section 19(b) 

and rule 19b–1 also were intended to 

prevent certain improper fund share 

sales practices, including, in particular, 

the practice of urging an investor to 

purchase shares of a fund on the basis 

of an upcoming capital gains dividend 

(‘‘selling the dividend’’), where the 

dividend would result in an immediate 

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Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices 19711 

4Returns of capital as used in the application 

means return of capital for financial accounting 

purposes and not for tax accounting purposes. 

corresponding reduction in NAV and 

would be in effect a taxable return of the 

investor’s capital. Applicants submit 

that the ‘‘selling the dividend’’ concern 

should not apply to closed-end 

investment companies, such as the 

Funds, which do not continuously 

distribute shares. According to 

applicants, if the underlying concern 

extends to secondary market purchases 

of shares of closed-end funds that are 

subject to a large upcoming capital gains 

dividend, adoption of a periodic 

distribution plan actually helps 

minimize the concern by avoiding, 

through periodic distributions, any 

buildup of large end-of-the-year 

distributions. 

6. Applicants also note that the 

common stock of closed-end funds often 

trades in the marketplace at a discount 

to its NAV. Applicants believe that this 

discount may be reduced if the Funds 

are permitted to pay relatively frequent 

dividends on their common stock at a 

consistent rate, whether or not those 

dividends contain an element of longterm capital gains. 

7. Applicants assert that the 

application of rule 19b–1 to a 

Distribution Policy actually could have 

an inappropriate influence on portfolio 

management decisions. Applicants state 

that, in the absence of an exemption 

from rule 19b–1, the adoption of a 

periodic distribution plan imposes 

pressure on management (i) not to 

realize any net long-term capital gains 

until the point in the year that the fund 

can pay all of its remaining distributions 

in accordance with rule 19b–1, and (ii) 

not to realize any long-term capital 

gains during any particular year in 

excess of the amount of the aggregate 

pay-out for the year (since as a practical 

matter excess gains must be distributed 

and accordingly would not be available 

to satisfy pay-out requirements in 

following years), notwithstanding that 

purely investment considerations might 

favor realization of long-term gains at 

different times or in different amounts. 

Applicants assert that by limiting the 

number of long-term capital gain 

dividends that a Fund may make with 

respect to any one year, rule 19b–1 may 

prevent the normal and efficient 

operation of a periodic distribution plan 

whenever that Fund’s realized net longterm capital gains in any year exceed 

the total of the periodic distributions 

that may include such capital gains 

under the rule. 

8. Applicants also assert that rule 

19b–1 may force fixed regular periodic 

distributions under a periodic 

distribution plan to be funded with 

returns of capital 4 (to the extent net 

investment income and realized shortterm capital gains are insufficient to 

fund the distribution), even though 

realized net long-term capital gains 

otherwise would be available. To 

distribute all of a Fund’s long-term 

capital gains within the limits in rule 

19b–1, a Fund may be required to make 

total distributions in excess of the 

annual amount called for by its periodic 

distribution plan, or to retain and pay 

taxes on the excess amount. Applicants 

assert that the requested order would 

minimize these anomalous effects of 

rule 19b–1 by enabling the Funds to 

realize long-term capital gains as often 

as investment considerations dictate 

without fear of violating rule 19b–1. 

9. Applicants state that Revenue 

Ruling 89–81 under the Code requires 

that a fund that seeks to qualify as a 

regulated investment company under 

the Code and that has both common 

stock and preferred stock outstanding 

designate the types of income, e.g., 

investment income and capital gains, in 

the same proportion as the total 

distributions distributed to each class 

for the tax year. To satisfy the 

proportionate designation requirements 

of Revenue Ruling 89–81, whenever a 

fund has realized a long-term capital 

gain with respect to a given tax year, the 

fund must designate the required 

proportionate share of such capital gain 

to be included in common and preferred 

stock dividends. Applicants state that 

although rule 19b–1 allows a fund some 

flexibility with respect to the frequency 

of capital gains distributions, a fund 

might use all of the exceptions available 

under the rule for a tax year and still 

need to distribute additional capital 

gains allocated to the preferred stock to 

comply with Revenue Ruling 89–81. 

10. Applicants assert that the 

potential abuses addressed by section 

19(b) and rule 19b–1 do not arise with 

respect to preferred stock issued by a 

closed-end fund. Applicants assert that 

such distributions are either fixed or 

determined in periodic auctions or 

remarketings or are periodically reset by 

reference to short-term interest rates 

rather than by reference to performance 

of the issuer, and Revenue Ruling 89– 

81 determines the proportion of such 

distributions that are comprised of longterm capital gains. 

11. Applicants also submit that the 

‘‘selling the dividend’’ concern is not 

applicable to preferred stock, which 

entitles a holder to no more than a 

specified periodic dividend at a fixed 

rate or the rate determined by the 

market, and, like a debt security, is 

priced based upon its liquidation 

preference, dividend rate, credit quality, 

and frequency of payment. Applicants 

state that investors buy preferred stock 

for the purpose of receiving payments at 

the frequency bargained for, and any 

application of rule 19b–1 to preferred 

stock would be contrary to the 

expectation of investors. 

12. Applicants request an order under 

section 6(c) of the Act granting an 

exemption from the provisions of 

section 19(b) of the Act and rule 19b– 

1 thereunder to permit each Fund to 

distribute periodic capital gain 

dividends (as defined in section 

852(b)(3)(C) of the Code) as frequently 

as monthly in any one taxable year in 

respect of its common stock and as often 

as specified by, or determined in 

accordance with the terms of, any 

preferred stock issued by the Fund. 

Applicants’ Conditions 

Applicants agree that, with respect to 

each Fund seeking to rely on the 

requested order, the order will be 

subject to the following conditions: 

1. Compliance Review and Reporting 

The Fund’s chief compliance officer 

will: (a) Report to the Fund’s Board, no 

less frequently than once every three 

months or at the next regularly 

scheduled quarterly Board meeting, 

whether (i) the Fund and its Adviser 

have complied with the conditions of 

the order, and (ii) a material compliance 

matter (as defined in rule 38a–1(e)(2) 

under the Act) has occurred with 

respect to such conditions; and (b) 

review the adequacy of the policies and 

procedures adopted by the Board no less 

frequently than annually. 

2. Disclosures to Fund Stockholders 

(a) Each 19(a) Notice disseminated to 

the holders of the Fund’s common 

stock, in addition to the information 

required by section19(a) and rule 19a– 

1: 

(i) Will provide, in a tabular or 

graphical format: 

(1) The amount of the distribution, on 

a per share of common stock basis, 

together with the amounts of such 

distribution amount, on a per share of 

common stock basis and as a percentage 

of such distribution amount, from 

estimated: (A) net investment income; 

(B) net realized short-term capital gains; 

(C) net realized long-term capital gains; 

and (D) return of capital or other capital 

source; 

(2) the fiscal year-to-date cumulative 

amount of distributions, on a per share 

of common stock basis, together with 

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19712 Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices 

5The disclosure in condition 2(a)(ii)(2) will be 

included only if the current distribution or the 

fiscal year-to-date cumulative distributions are 

estimated to include a return of capital. 

the amounts of such cumulative 

amount, on a per share of common stock 

basis and as a percentage of such 

cumulative amount of distributions, 

from estimated: (A) net investment 

income; (B) net realized short-term 

capital gains; (C) net realized long-term 

capital gains; and (D) return of capital 

or other capital source; 

(3) the average annual total return in 

relation to the change in NAV for the 5- 

year period (or, if the Fund’s history of 

operations is less than five years, the 

time period commencing immediately 

following the Fund’s first public 

offering) ending on the last day of the 

month ended immediately prior to the 

most recent distribution record date 

compared to the current fiscal period’s 

annualized distribution rate expressed 

as a percentage of NAV as of the last day 

of the month prior to the most recent 

distribution record date; and 

(4) the cumulative total return in 

relation to the change in NAV from the 

last completed fiscal year to the last day 

of the month prior to the most recent 

distribution record date compared to the 

fiscal year-to-date cumulative 

distribution rate expressed as a 

percentage of NAV as of the last day of 

the month prior to the most recent 

distribution record date. Such 

disclosure shall be made in a type size 

at least as large and as prominent as the 

estimate of the sources of the current 

distribution; and 

(ii) Will include the following 

disclosure: 

(1) ‘‘You should not draw any 

conclusions about the Fund’s 

investment performance from the 

amount of this distribution or from the 

terms of the Fund’s Distribution 

Policy’’; 

(2) ‘‘The Fund estimates that it has 

distributed more than its income and 

net realized capital gains; therefore, a 

portion of your distribution may be a 

return of capital. A return of capital may 

occur, for example, when some or all of 

the money that you invested in the 

Fund is paid back to you. A return of 

capital distribution does not necessarily 

reflect the Fund’s investment 

performance and should not be 

confused with ‘yield’ or ‘income’’’ 5; and 

(3) ‘‘The amounts and sources of 

distributions reported in this 19(a) 

Notice are only estimates and are not 

being provided for tax reporting 

purposes. The actual amounts and 

sources of the amounts for tax reporting 

purposes will depend upon the Fund’s 

investment experience during the 

remainder of its fiscal year and may be 

subject to changes based on tax 

regulations. The Fund will send you a 

Form 1099–DIV for the calendar year 

that will tell you how to report these 

distributions for federal income tax 

purposes.’’ 

Such disclosure shall be made in a type 

size at least as large as and as prominent 

as any other information in the 19(a) 

Notice and placed on the same page in 

close proximity to the amount and the 

sources of the distribution. 

(b) On the inside front cover of each 

report to stockholders under rule 30e-1 

under the Act, the Fund will: 

(i) describe the terms of the 

Distribution Policy (including the fixed 

amount or fixed percentage of the 

distributions and the frequency of the 

distributions); 

(ii) include the disclosure required by 

condition 2(a)(ii)(1) above; 

(iii) state, if applicable, that the 

Distribution Policy provides that the 

Board may amend or terminate the 

Distribution Policy at any time without 

prior notice to Fund stockholders; and 

(iv) describe any reasonably 

foreseeable circumstances that might 

cause the Fund to terminate the 

Distribution Policy and any reasonably 

foreseeable consequences of such 

termination. 

(c) Each report provided to 

stockholders under rule 30e-1 under the 

Act and each prospectus filed with the 

Commission on Form N–2 under the 

Act, will provide the Fund’s total return 

in relation to changes in NAV in the 

financial highlights table and in any 

discussion about the Fund’s total return. 

3. Disclosure to Stockholders, 

Prospective Stockholders and Third 

Parties 

(a) The Fund will include the 

information contained in the relevant 

19(a) Notice, including the disclosure 

required by condition 2(a)(ii) above, in 

any written communication (other than 

a communication on Form 1099) about 

the Distribution Policy or distributions 

under the Distribution Policy by the 

Fund, or agents that the Fund has 

authorized to make such 

communication on the Fund’s behalf, to 

any Fund stockholder, prospective 

stockholder or third-party information 

provider; 

(b) The Fund will issue, 

contemporaneously with the issuance of 

any 19(a) Notice, a press release 

containing the information in the 19(a) 

Notice and will file with the 

Commission the information contained 

in such 19(a) Notice, including the 

disclosure required by condition 2(a)(ii) 

above, as an exhibit to its next filed 

Form N–CSR; and 

(c) The Fund will post prominently a 

statement on its (or the Adviser’s) Web 

site containing the information in each 

19(a) Notice, including the disclosure 

required by condition 2(a)(ii) above, and 

will maintain such information on such 

Web site for at least 24 months. 

4. Delivery of 19(a) Notices to Beneficial 

Owners 

If a broker, dealer, bank or other 

person (‘‘financial intermediary’’) holds 

common stock issued by the Fund in 

nominee name, or otherwise, on behalf 

of a beneficial owner, the Fund: (a) Will 

request that the financial intermediary, 

or its agent, forward the 19(a) Notice to 

all beneficial owners of the Fund’s stock 

held through such financial 

intermediary; (b) will provide, in a 

timely manner, to the financial 

intermediary, or its agent, enough 

copies of the 19(a) Notice assembled in 

the form and at the place that the 

financial intermediary, or its agent, 

reasonably requests to facilitate the 

financial intermediary’s sending of the 

19(a) Notice to each beneficial owner of 

the Fund’s stock; and (c) upon the 

request of any financial intermediary, or 

its agent, that receives copies of the 

19(a) Notice, will pay the financial 

intermediary, or its agent, the 

reasonable expenses of sending the 19(a) 

Notice to such beneficial owners. 

5. Additional Board Determinations for 

Funds Whose Common Stock Trades at 

a Premium 

If: 

(a) The Fund’s common stock has 

traded on the stock exchange that they 

primarily trade on at the time in 

question at an average premium to NAV 

equal to or greater than 10%, as 

determined on the basis of the average 

of the discount or premium to NAV of 

the Fund’s shares of common stock as 

of the close of each trading day over a 

12-week rolling period (each such 12- 

week rolling period ending on the last 

trading day of each week); and 

(b) The Fund’s annualized 

distribution rate for such 12-week 

rolling period, expressed as a percentage 

of NAV as of the ending date of such 12- 

week rolling period, is greater than the 

Fund’s average annual total return in 

relation to the change in NAV over the 

2-year period ending on the last day of 

such 12-week rolling period; then: 

(i) At the earlier of the next regularly 

scheduled meeting or within four 

months of the last day of such 12-week 

rolling period, the Board, including a 

majority of the Independent Directors: 

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Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices 19713 

6 If the Fund has been in operation fewer than six 

months, the measured period will begin 

immediately following the Fund’s first public 

offering. 

7 If the Fund has been in operation fewer than five 

years, the measured period will begin immediately 

following the Fund’s first public offering. 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

(1) Will request and evaluate, and the 

Fund’s Adviser will furnish, such 

information as may be reasonably 

necessary to make an informed 

determination of whether the 

Distribution Policy should be continued 

or continued after amendment; 

(2) will determine whether 

continuation, or continuation after 

amendment, of the Distribution Policy is 

consistent with the Fund’s investment 

objective(s) and policies and is in the 

best interests of the Fund and its 

stockholders, after considering the 

information in condition 5(b)(i)(1) 

above; including, without limitation: 

(A) Whether the Distribution Policy is 

accomplishing its purpose(s); 

(B) the reasonably foreseeable 

material effects of the Distribution 

Policy on the Fund’s long-term total 

return in relation to the market price 

and NAV of the Fund’s common stock; 

and 

(C) the Fund’s current distribution 

rate, as described in condition 5(b) 

above, compared with the Fund’s 

average annual taxable income or total 

return over the 2-year period, as 

described in condition 5(b), or such 

longer period as the Board deems 

appropriate; and 

(3) based upon that determination, 

will approve or disapprove the 

continuation, or continuation after 

amendment, of the Distribution Policy; 

and 

(ii) The Board will record the 

information considered by it, including 

its consideration of the factors listed in 

condition 5(b)(i)(2) above, and the basis 

for its approval or disapproval of the 

continuation, or continuation after 

amendment, of the Distribution Policy 

in its meeting minutes, which must be 

made and preserved for a period of not 

less than six years from the date of such 

meeting, the first two years in an easily 

accessible place. 

6. Public Offerings 

The Fund will not make a public 

offering of the Fund’s common stock 

other than: 

(a) A rights offering below NAV to 

holders of the Fund’s common stock; 

(b) an offering in connection with a 

dividend reinvestment plan, merger, 

consolidation, acquisition, spin-off or 

reorganization of the Fund; or 

(c) an offering other than an offering 

described in conditions 6(a) and 6(b) 

above, provided that, with respect to 

such other offering: 

(i) The Fund’s annualized distribution 

rate for the six months ending on the 

last day of the month ended 

immediately prior to the most recent 

distribution record date,6 expressed as a 

percentage of NAV as of such date, is no 

more than 1 percentage point greater 

than the Fund’s average annual total 

return for the 5-year period ending on 

such date; 7 and 

(ii) the transmittal letter 

accompanying any registration 

statement filed with the Commission in 

connection with such offering discloses 

that the Fund has received an order 

under section 19(b) to permit it to make 

periodic distributions of long-term 

capital gains with respect to its shares 

of common stock as frequently as twelve 

times each year, and as frequently as 

distributions are specified by or 

determined in accordance with the 

terms of any outstanding shares of 

preferred stock as such Fund may issue. 

7. Amendments to Rule 19b–1 

The requested order will expire on the 

effective date of any amendment to rule 

19b–1 that provides relief permitting 

certain closed-end investment 

companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common stock as frequently as twelve 

times each year. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08338 Filed 4–10–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74665; File No. SR–CBOE– 

2015–037] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to the 

Exchange’s Arbitration Forum 

April 7, 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 April 1, 

2015, Chicago Board Options Exchange, 

Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) 

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 substantially prepared by the 

Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 Exchange proposes to adopt new 

Rule 18.1A relating to arbitration. The 

text of the proposed rule change is 

available at the Exchange’s Office of the 

Secretary, on the Exchange’s Web site at 

http://www.cboe.com/AboutCBOE/

CBOELegalRegulatoryHome.aspx, 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 

Exchange 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 

Exchange 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 Exchange proposes to adopt new 

Rule 18.1A. Specifically, the Exchange 

proposes to adopt new Rule 18.1A 

which would govern all arbitration 

claims submitted to the Exchange after 

the proposed rule change becomes 

operative (‘‘Effective Date’’). By way of 

background, the Exchange currently 

offers an arbitration facility for any of its 

Trading Permit Holders (‘‘TPHs’’), 

associated persons, or their customers to 

arbitrate disputes, claims, or 

controversies arising out of Exchange 

business. The Exchange’s arbitration 

program is governed by Chapter XVIII of 

the CBOE Rules. 

The Exchange recently entered into a 

Regulatory Services Agreement (‘‘RSA’’) 

mstockstill on DSK4VPTVN1PROD with NOTICES