2476 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Notices 

9 17 CFR 200.30–3(a)(12). 

1Certain Contracts make or made available 

guaranteed living benefit riders (each, a ‘‘Living 

Benefit Rider’’ and collectively, the ‘‘Living Benefit 

Riders’’). The terms of certain Living Benefit Riders 

include investment restrictions that limit the 

available investment options to identified allocation 

models consisting of a specified selection of 

investment options. A Contract owner with a Living 

Benefit Rider that has investment restrictions may 

transfer Contract value by reallocating all of his 

Contract value to a different allocation model under 

the rider or, depending on the terms of the rider, 

by reallocating his Contract value within the 

parameters of the allocation model. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00636 Filed 1–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32967; File No. 812–14714] 

The Guardian Insurance & Annuity 

Company, Inc., et al. 

January 10, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

approving the substitution of certain 

securities pursuant to section 26(c) of 

the Investment Company Act of 1940, as 

amended (the ‘‘Act’’). 

APPLICANTS: The Guardian Insurance & 

Annuity Company, Inc., (‘‘Guardian’’), 

The Guardian Separate Account Q, and 

The Guardian Separate Account R (each, 

a ‘‘Separate Account’’ and together, the 

‘‘Separate Accounts’’). Guardian and the 

Separate Accounts are referred to as the 

‘‘Applicants.’’ 

SUMMARY OF APPLICATION: Applicants 

seek an order pursuant to section 26(c) 

of the Act, approving the substitution of 

shares issued by certain investment 

portfolios of registered investment 

companies (the ‘‘Existing Portfolios’’) 

for shares of certain investment 

portfolios of Guardian Variable Products 

Trust (the ‘‘Replacement Portfolios’’), 

held by the Separate Accounts to 

support certain variable annuity 

contracts (the ‘‘Contracts’’). Guardian 

Variable Products Trust is referred to as 

the ‘‘Trust.’’ 

FILING DATE: The application was filed 

on November 3, 2016 and was amended 

on April 10, 2017 and September 18, 

2017. Applicants have agreed to file an 

amendment during the notice period, 

the substance of which is reflected in 

this notice. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing by writing to the 

Secretary of the Commission and 

serving the Applicants with a copy of 

the request, personally or by mail. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on 

February 6, 2018 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 Act, 

hearing requests should state the nature 

of the writer’s interest, any facts bearing 

upon the desirability of a hearing on the 

matter, the reason for the request, and 

the issues contested. Persons who wish 

to be notified of a hearing may request 

notification by writing to the 

Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

Applicants: Richard T. Potter, Senior 

Vice President, Counsel and Assistant 

Corporate Secretary, The Guardian 

Insurance & Annuity Company, Inc., 7 

Hanover Square, New York, New York 

10004. 

FOR FURTHER INFORMATION CONTACT: 

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

551–6873, or Robert H. Shapiro, 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 

website 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. Guardian is a Delaware stock life 

insurance company licensed to conduct 

insurance business in the District of 

Columbia and all fifty states of the 

United States. Guardian is whollyowned by The Guardian Life Insurance 

Company of America (‘‘Guardian Life’’), 

a mutual life insurance company. 

2. Each Separate Account meets the 

definition of ‘‘separate account,’’ as 

defined in section 2(a)(37) of the Act 

and rule 0–1(e) thereunder. The 

Separate Accounts are registered under 

the Act as unit investment trusts. The 

assets of the Separate Accounts support 

the Contracts and interests in the 

Separate Accounts offered through such 

Contracts. Guardian is the legal owner 

of the assets in the Separate Accounts. 

The Separate Accounts are segmented 

into subaccounts, and each subaccount 

invests in an underlying registered 

open-end management investment 

company or series thereof. 

3. The Contracts are each registered 

under the Securities Act of 1933, as 

amended (the ‘‘1933 Act’’) on Form N– 

4. Each Contract has particular fees, 

charges, and investment options, as 

described in the Contracts’ respective 

prospectuses. 

4. The Contracts are individual 

flexible or single premium deferred 

variable annuity contracts. As set forth 

in the prospectuses for the Contracts, 

each Contract provides that Guardian 

reserves the right to substitute shares of 

the funds in which the Separate 

Accounts invest for shares of any funds 

already held or to be held in the future 

by the Separate Accounts.1

5. Guardian, on behalf of itself and the 

Separate Accounts, proposes to exercise 

its contractual right to substitute shares 

of the Existing Portfolios for shares of 

the Replacement Portfolios 

(‘‘Substitutions’’), as shown in the table 

below: 

Substitution No. Existing portfolio Replacement portfolio 

1 ............................... Variable Portfolio Loomis Sayles Growth Fund (Class 2) .... Guardian Large Cap Disciplined Growth VIP Fund. 

2 ............................... Fidelity VIP Contrafund Portfolio (Service Class 2) .............. Guardian Large Cap Disciplined Growth VIP Fund. 

3 ............................... Fidelity VIP Growth Portfolio (Service Class 2) .................... Guardian Large Cap Disciplined Growth VIP Fund. 

4 ............................... Alger Capital Appreciation Portfolio (Class S) ...................... Guardian Large Cap Fundamental Growth VIP Fund. 

5 ............................... BlackRock Capital Appreciation V.I. Fund (Class III) ........... Guardian Large Cap Fundamental Growth VIP Fund. 

6 ............................... Columbia Variable Portfolio Large Cap Growth Fund (Class 

2).

Guardian Large Cap Fundamental Growth VIP Fund. 

7 ............................... Invesco V.I. American Franchise Fund (Series II) ................ Guardian Large Cap Fundamental Growth VIP Fund. 

8 ............................... MFS® Growth Series (Service Class) ................................... Guardian Large Cap Fundamental Growth VIP Fund. 


ethrower on DSK3G9T082PROD with NOTICES
Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Notices 2477 

2The Trust and Park Avenue may rely on an 

order from the Commission that permits Park 

Avenue, subject to certain conditions, including 

approval of the Trust’s board of directors but 

without the approval of shareholders, to select 

certain wholly-owned and non-affiliated investment 

sub-advisers to manage all or a portion of the assets 

of each portfolio of the Trust pursuant to an 

investment sub-advisory agreement with Park 

Avenue, and to materially amend sub-advisory 

agreements with Park Avenue. See Guardian 

Variable Products Trust and Park Avenue 

Institutional Advisers LLC, Investment Company 

Act Release Nos. 32420 (Jan. 9, 2017) (notice) and 

32468 (Feb. 6, 2017) (the ‘‘Manager of Managers 

Order’’). After the Substitution Date (defined 

below), Park Avenue will not change a Replacement 

Portfolio’s sub-adviser, add a new sub-adviser, or 

otherwise rely on the Manager of Managers Order 

or any replacement order from the Commission 

with respect to any Replacement Portfolio without 

first obtaining shareholder approval of the change 

in sub-adviser, the new sub-adviser, or the 

Replacement Portfolio’s ability to rely on the 

Manager of Managers Order or any replacement 

order from the Commission, at a shareholder 

meeting, the record date for which will be after the 

proposed Substitution has been effected. 

Substitution No. Existing portfolio Replacement portfolio 

9 ............................... Oppenheimer Capital Appreciation Fund/VA ........................

(Service Shares) ....................................................................

Guardian Large Cap Fundamental Growth VIP Fund. 

10 ............................. T. Rowe Price Blue Chip Growth Portfolio (Class II) ............ Guardian Large Cap Fundamental Growth VIP Fund. 

11 ............................. Invesco V.I. Core Equity Fund (Series II) ............................. Guardian Diversified Research VIP Fund. 

12 ............................. MFS® Core Equity Portfolio (Service Class) ......................... Guardian Diversified Research VIP Fund. 

13 ............................. MFS® Investors Trust Series (Service Class) ....................... Guardian Diversified Research VIP Fund. 

14 ............................. Pioneer Fund VCT Portfolio (Class II) .................................. Guardian Diversified Research VIP Fund. 

15 ............................. MFS® Value Series (Service Class) ..................................... Guardian Large Cap Disciplined Value VIP Fund. 

16 ............................. Pioneer Equity Income VCT Portfolio (Class II) .................... Guardian Large Cap Disciplined Value VIP Fund. 

17 ............................. AB Value Portfolio (Class B) ................................................. Guardian Growth & Income VIP Fund. 

18 ............................. Invesco V.I. Comstock Fund (Series II) ................................ Guardian Growth & Income VIP Fund. 

19 ............................. Invesco V.I. Growth and Income Fund (Series II) ................ Guardian Growth & Income VIP Fund. 

20 ............................. Invesco V.I. International Growth Fund (Series II) ................ Guardian International Growth VIP Fund. 

21 ............................. Oppenheimer International Growth Fund/VA (Service 

Shares).

Guardian International Growth VIP Fund. 

22 ............................. Wells Fargo VT International Equity Fund (Class 2) ............ Guardian International Value VIP Fund. 

23 ............................. Ivy VIP Mid Cap Growth ........................................................ Guardian Mid Cap Traditional Growth VIP Fund. 

24 ............................. American Century VP Mid Cap Value Fund (Class II) ......... Guardian Mid Cap Relative Value VIP Fund. 

25 ............................. Invesco V.I. American Value Fund (Series II) ....................... Guardian Mid Cap Relative Value VIP Fund. 

26 ............................. Invesco V.I. Mid Cap Core Equity Fund (Series II) .............. Guardian Mid Cap Relative Value VIP Fund. 

27 ............................. MFS® Total Return Bond Series (Service Class) ................. Guardian Core Plus Fixed Income VIP Fund. 

28 ............................. PIMCO Total Return Portfolio (Advisor Class) ...................... Guardian Core Plus Fixed Income VIP Fund. 

6. The Replacement Portfolios are 

series of the Trust, a Delaware statutory 

trust registered as an open-end 

management investment company 

under the Act (File No. 811–23148) and 

whose shares are registered under the 

1933 Act (File No. 333–210205). The 

Replacement Portfolios are currently 

available only as investment allocation 

options under variable insurance 

contracts issued by Guardian. 

7. Park Avenue Institutional Advisers 

LLC (‘‘Park Avenue’’), an indirect 

wholly-owned subsidiary of Guardian 

Life, serves as the investment adviser of 

each Replacement Portfolio. Park 

Avenue is a Delaware limited liability 

company that is registered as an 

investment adviser under the 

Investment Advisers Act of 1940. Each 

Replacement Portfolio is sub-advised by 

a registered investment adviser that is 

unaffiliated with Applicants, the Trust, 

or Park Avenue. 

8. Applicants state that the proposed 

Substitutions are part of a strategic 

business goal of Guardian to improve 

the administrative efficiency and costeffectiveness of the Contracts, as well as 

to make the Contracts more attractive to 

Contract owners. Applicants note that 

the proposed Substitutions are intended 

to improve portfolio manager selection 2

and simplify fund lineups while 

reducing costs and maintaining a menu 

of investment options that would offer 

a similar diversity of investment options 

after the proposed Substitutions as is 

currently available under the Contracts. 

Applicants believe that the Replacement 

Portfolios have investment objectives, 

principal investment strategies, and 

principal risks, as described in their 

prospectuses, which are substantially 

similar to the corresponding Existing 

Portfolios, making those Replacement 

Portfolios appropriate candidates as 

substitutes. Information for each 

Existing Portfolio and Replacement 

Portfolio, including investment 

objectives, principal investment 

strategies, principal risks, and 

comparative performance history, can 

be found in the application. 

9. Applicants state that for all the 

proposed Substitutions, the net annual 

operating expenses of the Replacement 

Portfolio will not exceed, on an 

annualized basis, the annual net 

operating expenses of any 

corresponding Existing Portfolio for the 

last fiscal year preceding the date of the 

application (the ‘‘Expense Cap’’). 

Applicants will cause Park Avenue, as 

the investment adviser of each 

Replacement Portfolio, to enter into a 

written contract with the Replacement 

Portfolio under which the net annual 

operating expenses of the Replacement 

Portfolio will not exceed the Expense 

Cap. The Expense Cap for each 

proposed Substitution will remain in 

place for a period of two years following 

the implementation of the proposed 

Substitution (the ‘‘Substitution Date’’), 

except that for those proposed 

Substitutions for which the sum of the 

current management fee and rule 12b– 

1 fees of the Replacement Portfolio is 

greater than that of the corresponding 

Existing Portfolio, the Expense Cap for 

that proposed Substitution will extend 

for the life of the affected Contracts 

following the Substitution Date. The 

Expense Cap applicable to Substitution 

No. 10 will also extend for the life of the 

affected Contracts following the 

Substitution Date. Any amounts waived 

or reimbursed by Park Avenue pursuant 

to any Expense Cap will not be subject 

to Park Avenue’s recoupment rights. 

10. Applicants represent that as of the 

Substitution Date, the Separate 

Accounts will redeem shares of the 

Existing Portfolios for cash. Redemption 

requests and purchase orders will be 

placed simultaneously so that Contract 

values will remain fully invested at all 

times. 

11. Each Substitution will be effected 

at the relative net asset values of the 

respective shares of the Replacement 

Portfolios in conformity with section 

22(c) of the Act and rule 22c–1 

thereunder without the imposition of 

any transfer or similar charges by 

Applicants. The Substitutions will be 

effected without change in the amount 


ethrower on DSK3G9T082PROD with NOTICES
2478 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Notices 

3Applicants state that, because the Substitutions 

will occur at relative net asset value, and the fees 

and charges under the Contracts will not change as 

a result of the Substitutions, the benefits offered by 

the guarantees under the Contracts will be the same 

immediately before and after the Substitutions. 

Applicants also state that what effect the 

Substitutions may have on the value of the benefits 

offered by the Contract guarantees would depend, 

among other things, on the relative future 

performance of the Existing Portfolios and 

Replacement Portfolios, which Applicants cannot 

predict. Nevertheless, Applicants note that at the 

time of the Substitutions, the Contracts will offer a 

comparable variety of investment options with as 

broad a range of risk/return characteristics. 

or value of any Contracts held by 

affected Contract owners.3

12. Contract owners will not incur 

any fees or charges as a result of the 

proposed Substitutions. The obligations 

of Applicants and the rights of the 

affected Contract owners, under the 

Contracts of affected Contract owners 

will not be altered in any way. Guardian 

and/or its affiliates (other than the 

Trust) will pay all expenses and 

transaction costs of the Substitutions, 

including legal and accounting 

expenses, any applicable brokerage 

expenses and other fees and expenses. 

No fees or charges will be assessed to 

the affected Contract owners to effect 

the Substitutions. The proposed 

Substitutions will not cause the 

Contract fees and charges currently 

being paid by Contract owners to be 

greater after the proposed Substitution 

than before the proposed Substitution. 

In addition, the Substitutions will in no 

way alter the tax treatment of affected 

Contract owners in connection with 

their Contracts, and no tax liability will 

arise for Contract owners as a result of 

the Substitutions. 

13. From the date of the PreSubstitution Notice (defined below) 

through 30 days following the 

Substitution Date, subject to the terms of 

certain Living Benefit Riders, Contract 

owners may make at least one transfer 

of Contract value from the subaccount 

investing in an Existing Portfolio (before 

the Substitution) or the Replacement 

Portfolio (after the Substitution) to any 

other available subaccount under the 

Contract without charge and without 

imposing any transfer limitations. 

Further, on the Substitution Date, 

Contract values attributable to 

investments in each Existing Portfolio 

will be transferred to the corresponding 

Replacement Portfolio without charge 

and without being subject to any 

transfer limitations. Moreover, except 

with respect to market timing policies 

and procedures and the terms of the 

Living Benefit Riders, Guardian will not 

exercise any rights reserved under the 

Contracts to impose restrictions on 

transfers between the subaccounts 

under the Contracts for a period 

beginning at least 30 days, including 

limitations on the future number of 

transfers, before the Substitution Date 

through at least 30 days following the 

Substitution Date. 

14. At least 30 days prior to the 

Substitution Date, Contract owners will 

be notified via prospectus supplements 

that Applicants received or expect to 

receive Commission approval of the 

applicable proposed Substitutions and 

of the anticipated Substitution Date (the 

‘‘Pre-Substitution Notice’’). PreSubstitution Notices sent to Contract 

owners will be filed with the 

Commission pursuant to rule 497 under 

the 1933 Act. The Pre-Substitution 

Notice will advise Contract owners that 

from the date of the Pre-Substitution 

Notice through the date 30 days after the 

Substitutions, subject to the terms of 

certain Living Benefit Riders, Contract 

owners may make at least one transfer 

of Contract value from the subaccounts 

investing in the Existing Portfolios 

(before the Substitutions) or the 

Replacement Portfolios (after the 

Substitutions) to any other available 

subaccount without charge and without 

imposing any transfer limitations. 

Among other information, the PreSubstitution Notice will inform affected 

Contract owners that, except with 

respect to market timing policies and 

procedures and limitations imposed by 

Living Benefit Riders, Guardian will not 

exercise any rights reserved under the 

Contracts to impose additional 

restrictions on transfers out of a 

Replacement Portfolio subaccount from 

the date of the Pre-Substitution Notice, 

including limitations on the future 

number of transfers, until at least 30 

days after the Substitution Date. 

Additionally, all affected Contract 

owners will be sent prospectuses of the 

applicable Replacement Portfolios at 

least 30 days before the Substitution 

Date. 

15. In addition to the Supplements 

distributed to the Contract owners, 

within five business days after the 

Substitution Date, Contract owners 

whose assets are allocated to a 

Replacement Portfolio as part of the 

proposed Substitutions will be sent a 

written notice (each, a ‘‘Confirmation’’) 

informing them that the Substitutions 

were carried out as previously notified. 

The Confirmation also will restate the 

information set forth in the PreSubstitution Notice. The Confirmation 

will also reflect the values of the 

Contract owner’s positions in the 

Existing Portfolio before the 

Substitution and the Replacement 

Portfolio after the Substitution. 

Legal Analysis 

1. Applicants request that the 

Commission issue an order pursuant to 

section 26(c) of the Act approving the 

proposed Substitutions. Section 26(c) 

prohibits any depositor or trustee of a 

unit investment trust that invests 

exclusively in the securities of a single 

issuer from substituting the securities of 

another issuer without the approval of 

the Commission. Section 26(c) provides 

that such approval shall be granted by 

order from the Commission if the 

evidence establishes that the 

substitution is consistent with the 

protection of investors and the purposes 

of the Act. 

2. Applicants submit that the 

Substitutions meet the standards set 

forth in section 26(c) and that, if 

implemented, the Substitutions would 

not raise any of the concerns that 

Congress intended to address when the 

Act was amended to include this 

provision. Applicants state that each 

Substitution protects the Contract 

owners who have Contract value 

allocated to an Existing Portfolio by 

providing Replacement Portfolios with 

substantially similar investment 

objectives, strategies, and risks, and 

providing Contract owners with 

investment options that have net annual 

operating expenses that will not exceed 

the Expense Cap. 

3. Guardian has reserved the right 

under the Contracts to substitute shares 

of another underlying fund for one of 

the current funds offered as an 

investment option under the Contracts. 

The Contracts and the Contracts’ 

prospectuses disclose this right. 

4. Applicants submit that the ultimate 

effect of the proposed Substitutions will 

be to streamline and simplify the 

investment line-ups that are available to 

Contract owners while reducing 

expenses and continuing to provide 

Contract owners with a wide array of 

investment options. Applicants state 

that the proposed Substitutions will not 

reduce in any manner the nature or 

quality of the available investment 

options and the proposed Substitutions 

also will permit Guardian to present 

information to its Contract owners in a 

simpler and more concise manner. 

Applicants also state it is anticipated 

that after the proposed Substitutions, 

Contract owners will be provided with 

disclosure documents that contain a 

simpler presentation of the available 

investment options under the Contracts. 

Applicants also assert that the proposed 

Substitutions are not of the type that 

section 26 was designed to prevent 

because they will not result in costly 

forced redemption, nor will they affect 


ethrower on DSK3G9T082PROD with NOTICES
Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Notices 2479 

other aspects of the Contracts. In 

addition, the proposed Substitutions 

will not adversely affect any features or 

riders under the Contracts. Accordingly, 

no Contract owner will involuntarily 

lose his or her features or riders as a 

result of any proposed Substitution. 

Moreover, Applicants will offer Contract 

owners the opportunity to transfer 

amounts out of the affected subaccounts 

without any cost or other penalty (other 

than those necessary to implement 

policies and procedures designed to 

detect and deter disruptive transfers and 

other ‘‘market timing’’ activities and 

administer the terms of the Living 

Benefit Riders) that may otherwise have 

been imposed for a period beginning on 

the date of the Pre-Substitution Notice 

(which supplement will be delivered to 

the Contract owners at least 30 days 

before the Substitution Date) and ending 

no earlier than 30 days after the 

Substitution Date. The proposed 

Substitutions are also unlike the type of 

substitution that section 26(c) was 

designed to prevent in that the 

Substitutions have no impact on other 

aspects of the Contracts. 

5. The proposed transactions will take 

place at relative net asset value in 

conformity with the requirements of 

section 22(c) of the Act and rule 22c–1 

thereunder without the imposition of 

any transfer or similar charges by the 

Applicants. The Substitutions will be 

effected without change in the amount 

or value of any Contract held by the 

affected Contract owners. The 

Substitutions will in no way alter the 

tax treatment of affected Contract 

owners in connection with their 

Contracts, and no tax liability will arise 

for Contract owners as a result of the 

Substitutions. The fees and charges 

under the Contracts will not increase 

because of the Substitutions. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the following conditions: 

1. The Substitutions will not be 

effected unless Guardian determines 

that: (i) The Contracts allow the 

substitution of shares of registered openend investment companies in the 

manner contemplated by the 

application; (ii) the Substitutions can be 

consummated as described in the 

application under applicable insurance 

laws; and (iii) any regulatory 

requirements in each jurisdiction where 

the Contracts are qualified for sale have 

been complied with to the extent 

necessary to complete the Substitutions. 

2. After the Substitution Date, Park 

Avenue will not change a Replacement 

Portfolio’s sub-adviser, add a new subadviser, or otherwise rely on the 

Manager of Managers Order or any 

replacement order from the Commission 

with respect to any Replacement 

Portfolio without first obtaining 

shareholder approval of the change in 

sub-adviser, the new sub-adviser, or the 

Replacement Portfolio’s ability to rely 

on the Manager of Managers Order, or 

any replacement order from the 

Commission, at a shareholder meeting, 

the record date for which shall be after 

the proposed Substitution has been 

effected. 

3. Guardian or an affiliate thereof 

(other than the Trust) will pay all 

expenses and transaction costs of the 

Substitutions, including legal and 

accounting expenses, any applicable 

brokerage expenses and other fees and 

expenses. No fees or charges will be 

assessed to the affected Contract owners 

to effect the Substitutions. The proposed 

Substitutions will not cause the 

Contract fees and charges currently 

being paid by Contract owners to be 

greater after the proposed Substitution 

than before the proposed Substitution. 

4. The Substitutions will be effected 

at the relative net asset values of the 

respective shares of the Replacement 

Portfolios in conformity with section 

22(c) of the Act and rule 22c–1 

thereunder without the imposition of 

any transfer or similar charges by the 

Applicants. The Substitutions will be 

effected without change in the amount 

or value of any Contracts held by 

affected Contract owners. 

5. The Substitutions will in no way 

alter the tax treatment of affected 

Contract owners in connection with 

their Contracts, and no tax liability will 

arise for Contract owners as a result of 

the Substitutions. 

6. The obligations of the Applicants 

and the rights of the affected Contract 

owners, under the Contracts of affected 

Contract owners will not be altered in 

any way. 

7. Affected Contract owners will be 

permitted to transfer Contract value 

from the subaccount investing in the 

Existing Portfolio (before the 

Substitution Date) or the Replacement 

Portfolio (after the Substitution Date) to 

any other available investment option 

under the Contract without charge for a 

period beginning at least 30 days before 

the Substitution Date through at least 30 

days following the Substitution Date. 

Contract owners with Living Benefit 

Riders, as applicable, may transfer 

Contract value from the subaccounts 

investing in the Existing Portfolios 

(before the Substitutions) or the 

Replacement Portfolios (after the 

Substitutions) to any other available 

investment option available under their 

respective riders without charge and 

without imposing any transfer 

limitations. Except as described in any 

market timing/short-term trading 

provisions of the relevant prospectus, 

the Applicants will not exercise any 

rights reserved under the Contracts to 

impose restrictions on transfers between 

the subaccounts under the Contracts, 

transfers, including limitations on the 

future number of transfers, for a period 

beginning at least 30 days before the 

Substitution Date through at least 30 

days following the Substitution Date. 

8. All affected Contract owners will be 

notified via the Pre-Substitution Notice, 

at least 30 days before the Substitution 

Date, about: (i) The intended 

Substitution of Existing Portfolios with 

the Replacement Portfolios; (ii) the 

intended Substitution Date; and (iii) 

information with respect to transfers as 

set forth in Condition 7 above. In 

addition, the Applicants will also 

deliver to affected Contract owners, at 

least 30 days before the Substitution 

Date, a prospectus for each applicable 

Replacement Portfolio. 

9. The Applicants will deliver to each 

affected Contract owner within five 

business days of the Substitution Date a 

written confirmation which will 

include: (i) A confirmation that the 

Substitutions were carried out as 

previously notified; (ii) a restatement of 

the information set forth in the PreSubstitution Notice; and (iii) values of 

the Contract owner’s positions in the 

Existing Portfolio before the 

Substitution and the Replacement 

Portfolio after the Substitution. 

10. Guardian will cause Park Avenue, 

as the investment adviser of each 

Replacement Portfolio, to enter into a 

written contract with the Replacement 

Portfolio whereby the net annual 

operating expenses of the Replacement 

Portfolio will not exceed the Expense 

Cap. The Expense Cap for each 

proposed Substitution will remain in 

place for a period of two years following 

the Substitution Date. For those 

proposed Substitutions for which the 

sum of the current management fee and 

rule 12b–1 fees of the Replacement 

Portfolio is greater than that of the 

corresponding Existing Portfolio, the 

Expense Cap for that proposed 

Substitution will extend for the life of 

the affected Contracts following the 

Substitution Date. The Expense Cap 

applicable to Substitution No. 10 will 

also extend for the life of the affected 

Contracts following the Substitution 

Date. 


ethrower on DSK3G9T082PROD with NOTICES
2480 Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 80911 

(June 13, 2017), 82 FR 27925. 

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

5See Securities Exchange Act Release No. 81247, 

82 FR 36031 (August 2, 2017). The Commission 

designated September 17, 2017 as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6See Letter from Gary L. Gastineau, President, 

ETF Consultants.com, Inc., to Brent J. Fields, 

Secretary, Commission, dated July 7, 2017; Letter 

from Todd J. Broms, Chief Executive Officer, Broms 

& Company LLC, to Brent J. Fields, Secretary, 

Commission, dated July 10, 2017; Letter from James 

J. Angel, Associate Professor of Finance, 

Georgetown University, McDonough School of 

Business, to the Commission, dated July 10, 2017; 

and Letter from Terence W. Norman, Founder, Blue 

Tractor Group, LLC, to Brent J. Fields, Secretary, 

Commission, dated August 1, 2017. The comment 

letters are available on the Commission’s website at: 

https://www.sec.gov/comments/sr-batsbzx-2017-30/ 

batsbzx201730.htm. 

7 15 U.S.C. 78s(b)(2)(B). 

8See Securities Exchange Act Release No. 81599, 

82 FR 43621 (September 18, 2017). 

9See Letter from Terence W. Norman, Founder, 

Blue Tractor Group, LLC, to Brent J. Fields, 

Secretary, Commission, dated December 5, 2017. 

The comment letter is available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-batsbzx-2017-30/batsbzx201730.htm. 

10See Securities Exchange Act Release No. 82301, 

82 FR 60073 (December 18, 2017). The Commission 

designated February 14, 2018 as the date by which 

the Commission must either approve or disapprove 

the proposed rule change. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4Public Law 111–203, 124 Stat. 1376 (2010). 

5See Securities Exchange Act Release No. 64795 

(July 1, 2011), 76 FR 39927 (July 7, 2011) (Order 

Granting Temporary Exemptions Under the 

Securities Exchange Act of 1934 in Connection 

With the Pending Revision of the Definition of 

‘‘Security’’ To Encompass Security-Based Swaps, 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00626 Filed 1–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82482; File No. SR– 

BatsBZX–2017–30] 

Self-Regulatory Organizations; Bats 

BZX Exchange, Inc.; Notice of 

Withdrawal of a Proposed Rule Change 

To Permit the Listing and Trading of 

Managed Portfolio Shares and To List 

and Trade Shares of the Following 

Under Proposed Rule 14.11(k): 

ClearBridge Appreciation ETF, 

ClearBridge Large Cap ETF, 

ClearBridge MidCap Growth ETF, 

ClearBridge Select ETF, and 

ClearBridge All Cap Value ETF 

January 10, 2018. 

On June 1, 2017, Bats BZX Exchange, 

Inc. (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to: 

(1) Adopt Rule 14.11(k) (Managed 

Portfolio Shares); and (2) list and trade 

shares of the ClearBridge Appreciation 

ETF, ClearBridge Large Cap ETF, 

ClearBridge MidCap Growth ETF, 

ClearBridge Select ETF, and ClearBridge 

All Cap Value ETF under proposed Rule 

14.11(k). The proposed rule change was 

published for comment in the Federal 

Register on June 19, 2017.3 On July 28, 

2017, pursuant to Section 19(b)(2) of the 

Act,4 the Commission designated a 

longer period within which to approve 

the proposed rule change, disapprove 

the proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.5

The Commission received four comment 

letters on the proposed rule change.6 On 

September 13, 2017, the Commission 

instituted proceedings under Section 

19(b)(2)(B) of the Act 7 to determine 

whether to approve or disapprove the 

proposed rule change.8 The Commission 

subsequently received one comment 

letter on the proposed rule change.9 On 

December 12, 2017, the Commission 

designated a longer period for action on 

the proposed rule change.10

On January 10, 2018, the Exchange 

withdrew the proposed rule change 

(SR–BatsBZX–2017–30). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00645 Filed 1–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82480; File No. SR–FINRA– 

2018–001] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Extend the Expiration 

Date of FINRA Rule 0180 (Application 

of Rules to Security-Based Swaps) 

January 10, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 4, 

2018, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ rule 

change under paragraph (f)(6) of Rule 

19b–4 under the Act,3 which renders 

the proposal effective upon receipt of 

this filing by the Commission. 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 

FINRA is proposing to extend the 

expiration date of FINRA Rule 0180 

(Application of Rules to Security-Based 

Swaps) to February 12, 2019. FINRA 

Rule 0180 temporarily limits, with 

certain exceptions, the application of 

FINRA rules with respect to securitybased swaps. 

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 

On July 1, 2011, the SEC issued an 

Order granting temporary exemptive 

relief (the ‘‘Temporary Exemptions’’) 

from compliance with certain 

provisions of the Exchange Act in 

connection with the revision, pursuant 

to Title VII of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’),4 of the 

Exchange Act definition of ‘‘security’’ to 

encompass security-based swaps.5


ethrower on DSK3G9T082PROD with NOTICES