Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices 5759 

Dated at Region 1, 475 Allendale Road, 

King of Prussia, PA this 30th day of January, 

2007. 

For the Nuclear Regulatory Commission. 

James P. Dwyer, 

Chief, Commercial and R&D Branch, Division 

of Nuclear Materials Safety, Region 1. 

[FR Doc. E7–2041 Filed 2–6–07; 8:45 am] 

BILLING CODE 7590–01–P 

NUCLEAR REGULATORY 

COMMISSION 

Sunshine Act Federal Register Notice 

AGENCY HOLDING THE MEETINGS: Nuclear 

Regulatory Commission. 

DATE: Weeks of February 5, 12, 19, 26, 

March 5, 12, 2007. 

PLACE: Commissioners’ Conference 

Room, 11555 Rockville Pike, Rockville, 

Maryland. 

STATUS: Public and Closed. 

MATTERS TO BE CONSIDERED: 

Week of February 5, 2007 

There are no meetings scheduled for 

the Week of February 5, 2007. 

Week of February 12, 2007—Tentative 

Thursday, February 15, 2007 

9:25 a.m.—Affirmation Session (Public 

Meeting) (Tentative) a. System 

Energy Resources, Inc. (Early Site 

Permit for Grand Gulf ESP) 

(Tentative). 

9:30 a.m.—Briefing on Office of Chief 

Financial Officer (OCFO) Programs, 

Performance, and Plans (Public 

Meeting) (Contact: Edward New, 

301–415–5646). 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov. 

Week of February 19, 2007—Tentative 

There are no meetings scheduled for 

the Week of February 19, 2007. 

Week of February 26, 2007—Tentative 

Wednesday, February 28, 2007 

9:30 a.m.—Periodic Briefing on New 

Reactor Issues (Public Meeting) 

(Contact: Donna Williams, 301–

415–1322). 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov. 

Week of March 5, 2007—Tentative 

Monday, March 5, 2007 

1 p.m.—Meeting with Department of 

Energy on New Reactor Issues 

(Public Meeting). 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov. 

Tuesday, March 6, 2007 

1 p.m.—Discussion of Management 

Issues (Closed—Ex. 2) (Tentative). 

Wednesday, March 7, 2007 

9:30 a.m.—Briefing on Office of Nuclear 

Security and Incident Response 

(NSIR) Programs, Performance, and 

Plans (Public Meeting) (Contact: 

Miriam Cohen, 301–415–0260). 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov. 

1 p.m.—Discussion of Security Issues 

(Closed—Ex. 1 and 3). 

Thursday, March 8, 2007 

10 a.m.—Briefing on Office of Nuclear 

Materials Safety and Safeguards 

(NMSS) Programs, Performance, 

and Plans (Public Meeting) 

(Contact: Gene Peters, 301–415–

5248). 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov. 

1 p.m.—Briefing on Office of Nuclear 

Reactor Regulation (NRR) Programs, 

Performance, and Plans (Public 

Meeting) (Contact: Reginald 

Mitchell, 301–415–1275). 

This meeting will be webcast live at 

the Web address—http://www.nrc.gov. 

Week of March 12, 2007—Tentative 

There are no meetings scheduled for 

the Week of March 12, 2007. 

* * * * * 

* The schedule for Commission 

meetings is subject to change on short 

notice. To verify the status of meetings 

call (recording)—(301) 415–1292. 

Contact person for more information: 

Michelle Schroll, (301) 415–1662. 

* * * * * 

Additional Information: Affirmation 

of 1. AmerGen Energy Company, LLC 

(License Renewal for Oyster Creek 

Nuclear Generating Station) Docket No. 

50–0219, Remaining Legal challenges to 

LBP–06–07 (Tentative), 2. Nuclear 

Management Co., LLC (Palisades 

Nuclear Plant, license renewal 

application); response to ‘‘Notice’’

relating to San Louis Obispo Mothers for 

Peace (Tentative), and 3. System Energy 

Resources, Inc. (Early Site Permit for 

Grand Gulf ESP Site); response to 

NEPA/terrorism issue (Tentative) 

previously scheduled on Monday, 

January 29, 2007, at 10:50 a.m. was 

postponed and will be rescheduled. 

By a vote of 5–0 on February 1, 2007, 

the Commission determined pursuant to 

U.S.C. 552b(e) and § 9.107(a) of the 

Commission’s rules that ‘‘Affirmation of 

David Geisen, ‘Order (Denying 

Government’s Request to Stay 

Proceeding)’ (Jan. 12, 2007)’’ be held 

February 1, 2007, and on less than one 

week’s notice to the public. 

* * * * * 

The NRC Commission Meeting 

Schedule can be found on the Internet 

at: http://www.nrc.gov/what-we-do/ 

policy-making/schedule.html. 

* * * * * 

The NRC provides reasonable 

accommodation to individuals with 

disabilities where appropriate. If you 

need a reasonable accommodation to 

participate in these public meetings, or 

need this meeting notice or the 

transcript or other information from the 

public meetings in another format (e.g. 

braille, large print), please notify the 

NRC’s Disability Program Coordinator, 

Deborah Chan, at 301–415–7041, TDD: 

301–415–2100, or by e-mail at 

DLC@nrc.gov. Determinations on 

requests for reasonable accommodation 

will be made on a case-by-case basis. 

* * * * * 

This notice is distributed by mail to 

several hundred subscribers; if you no 

longer wish to receive it, or would like 

to be added to the distribution, please 

contact the Office of the Secretary, 

Washington, DC 20555 (301–415–1969). 

In addition, distribution of this meeting 

notice over the Internet system is 

available. If you are interested in 

receiving this Commission meeting 

schedule electronically, please send an 

electronic message to dkw@nrc.gov. 

Dated: February 1, 2007. 

R. Michelle Schroll, 

Office of the Secretary. 

[FR Doc. 07–551 Filed 2–5–07; 10:52 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

27693; 812–13343] 

PowerShares Exchange-Traded Fund 

Trust, et al.; Notice of Application 

January 31, 2007. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 12(d)(1)(J) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) for exemption from sections 

12(d)(1)(A) and (B) of the Act and under 

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

exemption from section 17(a) of the Act. 

SUMMARY OF THE APPLICATION: The order 

would permit certain registered 

management investment companies and 

unit investment trusts to acquire shares 

of other registered open-end 


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5760 Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices 

1PowerShares Exchange-Traded Fund Trust, 

Investment Company Act Rel. Nos. 25961 (Mar. 4, 

2003) (notice) and 25985 (Mar. 28, 2003) (order). 2All entities that currently intend to rely on the 

requested order are named as applicants. Any other 

entity that relies on the order in the future will 

comply with the terms and conditions of the 

application. A Purchasing Fund, as defined below, 

may rely on the requested order only to invest in 

the Investee Funds, as defined below, and not in 

any other registered investment company. 

management investment companies and 

unit investment trusts that operate as 

exchange-traded funds and that are not 

part of the same group of investment 

companies. The order would also 

amend a condition in a prior order. 

APPLICANTS: PowerShares ExchangeTraded Fund Trust (the ‘‘Trust’’), 

PowerShares Capital Management LLC 

(the ‘‘Adviser’’) and AIM Distributors, 

Inc. (the ‘‘Distributor’’). 

FILING DATES: The application was filed 

on November 15, 2006 and amended on 

January 30, 2007. 

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 February 26, 2007, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Hearing requests should state 

the nature of the writer’s interest, 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: PowerShares Capital 

Management LLC and PowerShares 

Exchange-Traded Fund Trust, 301 W. 

Roosevelt Rd., Wheaton, IL 60187; AIM 

Distributors, Inc., 11 Greenway Plaza, 

Suite 100, Houston, TX 77046–1173. 

FOR FURTHER INFORMATION CONTACT: 

Marilyn Mann, Senior Counsel, at (202) 

551–6813, and Mary Kay Frech, Branch 

Chief, at (202) 551–6821 (Office of 

Investment Company Regulation, 

Division of Investment Management). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained for a fee at the 

Commission’s Public Reference Branch, 

100 F Street, NE., Washington, DC 

20549–0102 (tel. (202) 551–5850). 

Applicants’ Representations 

1. The Trust is an open-end 

management investment company 

registered under the Act and organized 

as a Massachusetts business trust. The 

Trust currently offers 70 series (the 

‘‘Current Index Funds’’) in reliance on 

a prior exemptive order (the ‘‘Prior 

Order’’).1 The Trust intends to establish 

additional series in the future in 

reliance on the Prior Order (‘‘Future 

Index Funds’’). The Current Index 

Funds and Future Index Funds are 

together referred to as the ‘‘Index 

Funds.’’ 2 The Adviser is a Delaware 

limited liability company that is 

registered as an investment adviser 

under the Investment Advisers Act of 

1940 (‘‘Advisers Act’’) and provides 

advisory services to each of the Index 

Funds. The Distributor is a Delaware 

corporation that is registered as a 

broker-dealer under the Securities 

Exchange Act of 1934. Each of the 

Adviser and the Distributor is an 

indirect wholly-owned subsidiary of 

AMVESCAP PLC, a public limited 

company organized in the United 

Kingdom. 

2. Applicants request an exemption to 

permit: (i) management investment 

companies or series thereof 

(‘‘Purchasing Management Companies’’) 

and unit investment trusts or series 

thereof (‘‘Purchasing Trusts,’’ and 

together with Purchasing Management 

Companies, ‘‘Purchasing Funds’’) 

registered under the Act that are not 

sponsored or advised by the Adviser or 

an entity controlling, controlled by or 

under common control with the Adviser 

and not part of the same ‘‘group of 

investment companies,’’ as defined in 

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

Index Funds, to acquire shares (‘‘Fund 

Shares’’) of (a) an Index Fund and (b) 

each open-end management investment 

company or series thereof or unit 

investment trust or series thereof 

registered under the Act that operates as 

an exchange-traded fund (an ‘‘ETF’’), is 

currently or subsequently part of the 

same ‘‘group of investment companies’’

as each Index Fund and is advised or 

sponsored by the Adviser or an entity 

controlling, controlled by or under 

common control with the Adviser (such 

open-end ETFs, including the Index 

Funds, are referred to herein as ‘‘Openend Funds’’ and such unit investment 

trust ETFs are referred to herein as ‘‘UIT 

Funds’’) (collectively, the ‘‘Investee 

Funds’’), beyond the limitations in 

section 12(d)(1)(A); and (ii) Open-end 

Funds, the Distributor and any broker or 

dealer to sell shares to the Purchasing 

Funds beyond the limits of section 

12(d)(1)(B). Applicants also seek an 

exemption from section 17(a) of the Act 

to permit an Investee Fund to sell Fund 

Shares to, and redeem Fund Shares 

from, and engage in certain in-kind 

transactions with, a Purchasing Fund of 

which the Investee Fund is an affiliated 

person or an affiliated person of an 

affiliated person. 

3. Each Purchasing Management 

Company will be advised by an 

investment adviser within the meaning 

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

(‘‘Purchasing Fund Adviser’’) and may 

be sub-advised by investment adviser(s) 

within the meaning of section 

2(a)(20)(B) of the Act (‘‘Purchasing Fund 

Sub-Adviser’’). Any investment adviser 

to a Purchasing Management Company 

will be registered as an investment 

adviser under the Advisers Act. A 

sponsor to a Purchasing Trust is a 

‘‘Purchasing Trust Sponsor.’’

4. Applicants state that the Investee 

Funds will offer the Purchasing Funds 

an easy way to gain instant exposure to 

a variety of markets, segments, sectors, 

geographic regions and groups of 

industries through a single, relatively 

low cost transaction. 

Applicants’ Legal Analysis 

A. Section 12(d)(1) 

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

prohibits a registered investment 

company from acquiring shares of an 

investment company if the securities 

represent more than 3% of the total 

outstanding voting stock of the acquired 

company, more than 5% of the total 

assets of the acquiring company, or, 

together with the securities of any other 

investment companies, more than 10% 

of the total assets of the acquiring 

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

prohibits a registered open-end 

investment company, its principal 

underwriter, or any other broker or 

dealer from selling its shares to another 

investment company if the sale will 

cause the acquiring company to own 

more than 3% of the acquired 

company’s voting stock, or if the sale 

will cause more than 10% of the 

acquired company’s voting stock to be 

owned by investment companies 

generally. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

2. Applicants assert that the proposed 

transactions will not lead to any of the 

abuses that section 12(d)(1) was 

designed to prevent. Applicants submit 


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Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices 5761 

3Applicants acknowledge that the receipt of any 

compensation by (a) an affiliated person or second 

tier affiliate of a Purchasing Fund for the purchase 

by the Purchasing Fund of Fund Shares of an 

Investee Fund or (b) an affiliated person or second 

tier affiliate of an Investee Fund for the sale by the 

Investee Fund of Fund Shares to a Purchasing 

Fund, is subject to section 17(e) of the Act. The 

Purchasing Fund Agreement also will include this 

acknowledgment. 

that the proposed conditions to the 

requested relief address the concerns 

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

which include concerns about undue 

influence, excessive layering of fees and 

overly complex structures. 

3. Applicants state that the proposed 

arrangement will not result in undue 

influence by a Purchasing Fund or its 

affiliates over an Investee Fund. To limit 

the control that a Purchasing Fund may 

have over an Investee Fund, applicants 

propose a condition prohibiting the 

Purchasing Fund Adviser or Purchasing 

Trust Sponsor; any person controlling, 

controlled by, or under common with 

the Purchasing Fund Adviser or 

Purchasing Trust Sponsor; and any 

investment company or issuer that 

would be an investment company but 

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

that is advised or sponsored by the 

Purchasing Fund Adviser or advised or 

sponsored by the Purchasing Trust 

Sponsor, or any person controlling, 

controlled by, or under common control 

with the Purchasing Fund Adviser or 

Purchasing Trust Sponsor (‘‘Purchasing 

Fund’s Advisory Group’’) from 

controlling (individually or in the 

aggregate) an Investee Fund within the 

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

The same prohibition would apply to 

any Purchasing Fund Subadviser; any 

person controlling, controlled by, or 

under common control with the 

Purchasing Fund Subadviser; and any 

investment company or issuer that 

would be an investment company but 

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

(or portion of such investment company 

or issuer) advised or sponsored by the 

Purchasing Fund Subadviser or any 

person controlling, controlled by, or 

under common control with the 

Purchasing Fund Subadviser 

(‘‘Purchasing Fund’s Sub-Advisory 

Group’’). 

4. To limit further the potential for 

undue influence by a Purchasing Fund 

over an Investee Fund, applicants 

propose conditions 2 through 7, stated 

below, to preclude a Purchasing Fund 

and certain of its affiliates from taking 

advantage of an Investee Fund and 

certain Investee Fund affiliates with 

respect to transactions between the 

entities and to ensure the transactions 

will be on an arm’s length basis. 

5. Applicants do not believe that the 

proposed arrangement will involve 

excessive layering of fees. The board of 

directors or trustees of each Purchasing 

Management Company, including a 

majority of the disinterested directors or 

trustees, before approving any advisory 

contract under section 15 of the Act, 

will be required to determine that the 

advisory fees charged to the Purchasing 

Management Company are based on 

services provided that will be in 

addition to, rather than duplicative of, 

the services provided under the 

advisory contract(s) of any Open-end 

Fund in which the Purchasing 

Management Company may invest. In 

addition, the Purchasing Fund Adviser, 

trustee or Purchasing Trust Sponsor of 

a Purchasing Fund, as applicable, will 

waive fees otherwise payable to it by the 

Purchasing Fund in an amount at least 

equal to any compensation received 

from an Investee Fund by the 

Purchasing Fund Adviser, trustee or 

Purchasing Trust Sponsor, or an 

affiliated person of the Purchasing Fund 

Adviser, trustee or Purchasing Trust 

Sponsor (other than any advisory fees), 

in connection with the investment by 

the Purchasing Fund in the Investee 

Funds. Applicants also state that any 

sales charges and/or service fees 

charged with respect to shares of a 

Purchasing Fund will not exceed the 

limits applicable to a fund of funds set 

forth in Conduct Rule 2830 of the NASD 

(‘‘Rule 2830’’). 

6. Applicants submit that the 

proposed arrangement will not create an 

overly complex fund structure. 

Applicants note that an Investee Fund 

will be prohibited from acquiring 

securities of any investment company, 

or of any company relying on section 

3(c)(1) or 3(c)(7) of the Act, in excess of 

the limits contained in section 

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

7. To ensure that Purchasing Funds 

are aware of the terms and conditions of 

the requested order, the Purchasing 

Funds must enter into an agreement 

with the respective Investee Funds 

(‘‘Purchasing Fund Agreement’’). The 

Purchasing Fund Agreement will 

include an acknowledgement from the 

Purchasing Fund that it may rely on the 

order only to invest in the Investee 

Funds and not in any other investment 

company. The Purchasing Fund 

Agreement will further require any 

Purchasing Fund that exceeds the 5% or 

10% limitations in section 

12(d)(1)(A)(ii) and (iii) to disclose in its 

prospectus that it may invest in ETFs 

and disclose, in ‘‘plain English,’’ in its 

prospectus the unique characteristics of 

the Purchasing Funds investing in 

investment companies, including but 

not limited to the expense structure and 

any additional expenses of investing in 

investment companies. Each Purchasing 

Fund will comply with the disclosure 

requirements concerning the aggregate 

costs of investing in the Investee Funds 

set forth in Investment Company Act 

Release No. 27399. 

B. Section 17(a) 

1. Section 17(a) of the Act generally 

prohibits an affiliated person of a 

registered investment company or an 

affiliated person of such person 

(‘‘second tier affiliate’’), from selling any 

security to or purchasing any security 

from the company. Section 2(a)(3) of the 

Act defines an ‘‘affiliated person’’ of 

another person to include any person 

5% or more of whose outstanding voting 

securities are directly or indirectly 

owned, controlled, or held with power 

to vote by the other person, and any 

person directly or indirectly controlling, 

controlled by, or under common control 

with, the other person. The Investee 

Funds may be deemed to be controlled 

by the Adviser or an entity controlling, 

controlled by, or under common control 

with the Adviser and hence affiliated 

persons of each other. In addition, the 

Investee Funds may be deemed to be 

under common control with any other 

registered investment company (or 

series thereof) advised by the Adviser or 

an entity controlling, controlled by or 

under common control with the Adviser 

(an ‘‘Affiliated Fund’’).3

2. Section 17(b) of the Act authorizes 

the Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if evidence 

establishes that (a) the terms of the 

proposed transaction are reasonable and 

fair and do not involve overreaching on 

the part of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

Section 6(c) of the Act permits the 

Commission to exempt any person or 

transactions from any provision of the 

Act if 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 request an exemption 

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

from section 17(a) of the Act in order to 

permit each Investee Fund to sell Fund 

Shares to and redeem Fund Shares from, 

and engage in the in-kind transactions 

that would accompany such sales and 

redemptions with, any Purchasing Fund 


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5762 Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices 

4Although applicants believe that most 

Purchasing Funds will purchase and sell Fund 

Shares in the secondary market, a Purchasing Fund 

might seek to transact in Fund Shares directly with 

an Investee Fund. When transacting directly with 

an Investee Fund, a Purchasing Fund will generally 

be required to deposit securities into, or receive 

securities from, the Investee Fund in connection 

with the purchase and redemption of Fund Shares. 

With respect to these in-kind transactions, 

applicants are requesting relief for Investee Funds 

that are affiliated persons or second tier affiliates of 

a Purchasing Fund solely by virtue of one or more 

of the reasons described above. 

5A ‘‘Product Description’’ is a short document 

that describes, in plain English, the Fund Shares 

and the Investee Funds. The Product Description is 

delivered by broker-dealers to secondary market 

purchasers of Fund Shares. 

6The requested order would also amend the Prior 

Order to reflect that the Trust has replaced the prior 

distributor, ALPS Distributors, Inc. (‘‘ALPS’’), with 

the Distributor. The application for the Prior Order 

stated that ALPS was not an affiliated person of the 

Adviser. As described above, the Distributor is an 

affiliated person of the Adviser. The Distributor 

agrees to comply with all terms and conditions of 

the Prior Order, as amended. 

of which it is an affiliated person or 

second tier affiliate because of one or 

more of the following: (1) The 

Purchasing Fund holds 5% or more of 

the Fund Shares of the Trust or one or 

more Investee Funds; (2) a Purchasing 

Fund described in (1) is an affiliated 

person of the Purchasing Fund; or (3) 

the Purchasing Fund holds 5% or more 

of the shares of one or more Affiliated 

Funds.4

4. Applicants submit that the 

proposed arrangement satisfies the 

standards for relief under sections 17(b) 

and 6(c) of the Act. Applicants submit 

that the proposed transactions are 

appropriate in the public interest, 

consistent with the protection of 

investors, and do not involve 

overreaching. Applicants note that the 

consideration paid for the purchase or 

received for the redemption of Fund 

Shares directly from an Investee Fund 

by a Purchasing Fund (or any other 

investor) will be based on the net asset 

value of the Fund Shares. In addition, 

the securities received or transferred by 

the Investee Fund in connection with 

the purchase or redemption of Fund 

Shares will be valued in the same 

manner as the Investee Fund’s portfolio 

securities and thus the transactions will 

not be detrimental to the Purchasing 

Fund. Applicants also state that the 

proposed transactions will be consistent 

with the policies of each Purchasing 

Fund and Investee Fund and with the 

general purposes of the Act. Applicants 

state that the Purchasing Fund 

Agreement will require a Purchasing 

Fund to represent that its ownership of 

Fund Shares issued by an Investee Fund 

is consistent with the investment 

policies set forth in the Purchasing 

Fund’s registration statement. 

C. Prior Order 

Applicants also seek to amend a 

condition to the Prior Order so that the 

condition is consistent with the relief 

requested from section 12(d)(1). 

Condition 2 to the Prior Order currently 

provides that each Investee Fund 

prospectus and ‘‘Product Description’’ 5

will clearly disclose that, for purposes 

of the Act, Fund Shares are issued by 

the Investee Fund and that the 

acquisition of Fund Shares by 

investment companies is subject to the 

restrictions of section 12(d)(1) of the 

Act. In light of the requested order to 

permit Purchasing Funds to invest in 

Investee Funds in excess of the limits of 

section 12(d)(1), applicants wish to 

replace this condition with condition 

13, as stated below. Under the new 

condition, each Investee Fund 

prospectus and Product Description will 

disclose that Purchasing Funds may 

purchase shares of the Investee Funds in 

excess of the limits of section 12(d)(1) 

to the extent that they comply with the 

terms and conditions of the requested 

order granting relief from section 

12(d)(1).6

Applicants’ Conditions 

Applicants agree that the order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

1. The members of a Purchasing 

Fund’s Advisory Group will not control 

(individually or in the aggregate) an 

Investee Fund within the meaning of 

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

of a Purchasing Fund’s Sub-Advisory 

Group will not control (individually or 

in the aggregate) an Investee Fund 

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

the Act. If, as a result of a decrease in 

the outstanding Fund Shares of an 

Investee Fund, the Purchasing Fund’s 

Advisory Group or the Purchasing 

Fund’s Sub-Advisory Group, each in the 

aggregate, becomes a holder of more 

than 25 percent of the outstanding Fund 

Shares of an Investee Fund, it will vote 

its Fund Shares in the same proportion 

as the vote of all other holders of the 

Investee Fund’s Fund Shares. This 

condition does not apply to the 

Purchasing Fund Sub-Advisory Group 

with respect to an Investee Fund for 

which the Purchasing Fund SubAdviser or a person controlling, 

controlled by, or under common control 

with the Purchasing Fund Sub-Adviser 

acts as the investment adviser within 

the meaning of section 2(a)(20)(A) of the 

Act (in the case of an Open-end Fund) 

or as the sponsor (in the case of a UIT 

Fund). 

2. No Purchasing Fund or Purchasing 

Fund Affiliate will cause any existing or 

potential investment by the Purchasing 

Fund in an Investee Fund to influence 

the terms of any services or transactions 

between the Purchasing Fund or a 

Purchasing Fund Affiliate and the 

Investee Fund or a Fund Affiliate. A 

‘‘Purchasing Fund Affiliate’’ means a 

Purchasing Fund Adviser, Purchasing 

Fund Sub-Adviser, Purchasing Trust 

Sponsor, a promoter, or a principal 

underwriter of a Purchasing Fund and 

any person controlling, controlled by, or 

under common control with any of 

those entities. A ‘‘Fund Affiliate’’ means 

an investment adviser(s), promoter, 

sponsor or principal underwriter of an 

Investee Fund and any person 

controlling, controlled by or under 

common control with any of these 

entities. 

3. The board of directors or trustees of 

a Purchasing Management Company, 

including a majority of the disinterested 

directors or trustees, will adopt 

procedures reasonably designed to 

ensure that the Purchasing Fund 

Adviser and any Purchasing Fund SubAdviser are conducting the investment 

program of the Purchasing Management 

Company without taking into account 

any consideration received by the 

Purchasing Management Company or a 

Purchasing Fund Affiliate from an 

Investee Fund or Fund Affiliate in 

connection with any services or 

transactions. 

4. Once an investment by a 

Purchasing Fund in the securities of an 

Open-end Fund exceeds the limit of 

section 12(d)(1)(A)(i) of the Act, the 

board of directors or trustees of an 

Open-end Fund (‘‘Board’’), including a 

majority of the disinterested Board 

members, will determine that any 

consideration paid by the Open-end 

Fund to the Purchasing Fund or a 

Purchasing Fund Affiliate in connection 

with any services or transactions (i) is 

fair and reasonable in relation to the 

nature and quality of the services and 

benefits received by the Open-end 

Fund; (ii) is within the range of 

consideration that the Open-end Fund 

would be required to pay to another 

unaffiliated entity in connection with 

the same services or transactions; and 

(iii) does not involve overreaching on 

the part of any person concerned. This 

condition does not apply with respect to 

any services or transactions between an 

Open-end Fund and its investment 

adviser(s) or any person controlling, 

controlled by, or under common control 

with such investment adviser(s). 

5. No Purchasing Fund or Purchasing 

Fund Affiliate (except to the extent it is 

acting in its capacity as an investment 


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Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices 5763 

adviser to an Open-end Fund or sponsor 

to a UIT Fund) will cause an Investee 

Fund to purchase a security in an 

offering of securities during the 

existence of an underwriting or selling 

syndicate of which a principal 

underwriter is an officer, director, 

member of an advisory board, 

Purchasing Fund Adviser, Purchasing 

Fund Sub-Adviser, employee, or 

Purchasing Trust Sponsor of the 

Purchasing Fund, or a person of which 

any such officer, director, member of an 

advisory board, Purchasing Fund 

Adviser, Purchasing Fund Sub-Adviser, 

employee, or Purchasing Trust Sponsor 

is an affiliated person (each, an 

‘‘Underwriting Affiliate,’’ except any 

person whose relationship to the 

Investee Fund is covered by section 

10(f) of the Act is not an Underwriting 

Affiliate). An offering of securities 

during the existence of any 

underwriting or selling syndicate of 

which a principal underwriter is an 

Underwriting Affiliate is an ‘‘Affiliated 

Underwriting.’’

6. The Board of an Open-end Fund, 

including a majority of the disinterested 

Board members, will adopt procedures 

reasonably designed to monitor any 

purchases of securities by the Open-end 

Fund in an Affiliated Underwriting, 

once an investment by a Purchasing 

Fund in the securities of the Open-end 

Fund exceeds the limit of section 

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

purchases made directly from an 

Underwriting Affiliate. The Board will 

review these purchases periodically, but 

no less frequently than annually, to 

determine whether the purchases were 

influenced by the investment by the 

Purchasing Fund in the Open-end Fund. 

The Board will consider, among other 

things: (i) whether the purchases were 

consistent with the investment 

objectives and policies of the Open-end 

Fund; (ii) how the performance of 

securities purchased in an Affiliated 

Underwriting compares to the 

performance of comparable securities 

purchased during a comparable period 

of time in underwritings other than 

Affiliated Underwritings or to a 

benchmark such as a comparable market 

index; and (iii) whether the amount of 

securities purchased by the Open-end 

Fund in Affiliated Underwritings and 

the amount purchased directly from an 

Underwriting Affiliate have changed 

significantly from prior years. The 

Board will take any appropriate actions 

based on its review, including the 

institution of procedures designed to 

assure that purchases of securities in 

Affiliated Underwritings are in the best 

interest of shareholders. 

7. The Open-end Fund will maintain 

and preserve permanently in an easily 

accessible place a written copy of the 

procedures described in the preceding 

condition, and any modifications to 

such procedures, and will maintain and 

preserve for a period of not less than six 

years from the end of the fiscal year in 

which any purchase in an Affiliated 

Underwriting occurred, the first two 

years in an easily accessible place, a 

written record of each purchase of 

securities in Affiliated Underwritings 

once an investment by a Purchasing 

Fund in the shares of the Open-end 

Fund exceeds the limit of section 

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

from whom the securities were 

acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the Board’s determinations were made. 

8. Before investing in an Investee 

Fund in excess of the limits of section 

12(d)(1)(A), the Purchasing Fund and 

the Investee Fund will execute a 

Purchasing Fund Agreement stating, 

without limitation, that their boards of 

directors or trustees and their 

investment advisers or sponsors and 

trustees, as applicable, understand the 

terms and conditions of the order, and 

agree to fulfill their responsibilities 

under the order. At the time of its 

investment in shares of an Open-end 

Fund in excess of the limit of section 

12(d)(1)(A)(i), a Purchasing Fund will 

notify the Open-end Fund of the 

investment. At such time, the 

Purchasing Fund will also transmit to 

the Open-end Fund a list of the names 

of each Purchasing Fund Affiliate and 

Underwriting Affiliate. The Purchasing 

Fund will notify the Open-end Fund of 

any changes to the list as soon as 

reasonably practicable after a change 

occurs. The Investee Fund and the 

Purchasing Fund will maintain and 

preserve a copy of the order, the 

Purchasing Fund Agreement and, in the 

case of an Open-end Fund, the list with 

any updated information for the 

duration of the investment and for a 

period of not less than six years 

thereafter, the first two years in an 

easily accessible place. 

9. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors or trustees of each 

Purchasing Management Company, 

including a majority of the disinterested 

directors or trustees, will find that the 

advisory fees charged under such 

advisory contract are based on services 

provided that will be in addition to, 

rather than duplicative of, the services 

provided under the advisory contract(s) 

of any Open-end Fund in which the 

Purchasing Management Company may 

invest. These findings and their basis 

will be recorded fully in the minute 

books of the appropriate Purchasing 

Management Company. 

10. A Purchasing Fund Adviser, 

trustee or Purchasing Trust Sponsor, as 

applicable, will waive fees otherwise 

payable to it by a Purchasing Fund, in 

an amount at least equal to any 

compensation (including fees received 

pursuant to any plan adopted by an 

Open-end Fund under rule 12b-1 under 

the Act) received from an Investee Fund 

by the Purchasing Fund Adviser, trustee 

or Purchasing Trust Sponsor, or an 

affiliated person of the Purchasing Fund 

Adviser, trustee or Purchasing Trust 

Sponsor, other than any advisory fees 

paid to the Purchasing Fund Adviser, 

trustee or Purchasing Trust Sponsor or 

its affiliated person by an Open-end 

Fund, in connection with the 

investment by the Purchasing Fund in 

an Investee Fund. Any Purchasing Fund 

Sub-Adviser will waive fees otherwise 

payable to the Purchasing Fund SubAdviser, directly or indirectly, by the 

Purchasing Management Company in an 

amount at least equal to any 

compensation received from an Investee 

Fund by the Purchasing Fund SubAdviser, or an affiliated person of the 

Purchasing Fund Sub-Adviser, other 

than any advisory fees paid to the 

Purchasing Fund Sub-Adviser or its 

affiliated person by the Open-end Fund, 

in connection with the investment by 

the Purchasing Management Company 

in an Investee Fund made at the 

direction of the Purchasing Fund SubAdviser. In the event that the 

Purchasing Fund Sub-Adviser waives 

fees, the benefit of the waiver will be 

passed through to the Purchasing 

Management Company. 

11. Any sales charges and/or service 

fees charged with respect to shares of a 

Purchasing Fund will not exceed the 

limits applicable to a fund of funds as 

set forth in Rule 2830. 

12. No Investee Fund will acquire 

securities of any investment company or 

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

3(c)(7) of the Act in excess of the limits 

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

Act. 

Amendment to Prior Order 

Applicants agree to replace condition 

2 of the Prior Order with the following 

condition: 

13. Each Investee Fund’s prospectus 

and Product Description will clearly 

disclose that, for purposes of the Act, 

the Fund Shares are issued by a 

registered investment company, and the 

acquisition of Fund Shares by 

investment companies is subject to the 


sroberts on PROD1PC70 with NOTICES
5764 Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices 

1 Van Eck Associates Corporation, et al., 

Investment Company Act Release Nos. 27283 (April 

7, 2006) (notice) and 27311 (May 2, 2006) (order). 

restrictions of section 12(d)(1) of the 

Act, except as permitted by an 

exemptive order that permits registered 

investment companies to invest in an 

Investee Fund beyond the limits in 

section 12(d)(1), subject to certain terms 

and conditions, including that the 

registered investment company enter 

into a Purchasing Fund Agreement with 

the Investee Fund regarding the terms of 

the investment. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 07–529 Filed 2–6–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

27694; 812–13339] 

Van Eck Associates Corporation, et al.; 

Notice of Application 

January 31, 2007. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application to 

amend a prior order under section 6(c) 

of the Investment Company Act of 1940 

(‘‘Act’’) to grant exemptions from 

sections 2(a)(32), 5(a)(1), 22(d), 22(e), 

and 24(d) of the Act and rule 22c–1 

under the Act, under section 12(d)(1)(J) 

of the Act for an exemption from 

sections 12(d)(1)(A) and (B) of the Act, 

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

Act granting an exemption from sections 

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

SUMMARY OF APPLICATION: Applicants 

request an order to amend a prior order 

that permits: (a) Open-end management 

investment companies that include 

series based on certain domestic equity 

securities indices to issue shares 

(‘‘Shares’’) that can be redeemed only in 

large aggregations (‘‘Creation Units’’); (b) 

secondary market transactions in Shares 

to occur at negotiated prices; (c) dealers 

to sell Shares to purchasers in the 

secondary market unaccompanied by a 

prospectus when prospectus delivery is 

not required by the Securities Act of 

1933 (‘‘Securities Act’’); (d) certain 

affiliated persons of the series to deposit 

securities into, and receive securities 

from, the series in connection with the 

purchase and redemption of Creation 

Units; and (e) certain registered 

management investment companies and 

unit investment trusts outside of the 

same group of investment companies as 

the series to acquire Shares (‘‘Prior 

Order’’).1 Applicants seek to amend the 

Prior Order in order to offer two new 

series (each series, an ‘‘Additional 

Fund,’’ and together, the ‘‘Additional 

Funds’’) and future series (‘‘Future 

Foreign Funds,’’ and together with the 

Additional Funds, the ‘‘Foreign Funds’’) 

based on foreign equity securities 

indices. In addition, the order would 

delete a condition related to future relief 

in the Prior Order. 

APPLICANTS: Van Eck Associates 

Corporation (‘‘Adviser’’), Market Vectors 

ETF Trust (‘‘Trust’’), and Van Eck 

Securities Corporation (‘‘Distributor’’). 

FILING DATES: The application was 

filed on November 1, 2006, and 

amended on January 25, 2007. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on February 26, 2007, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Hearing requests should state 

the nature of the writer’s interest, the 

reason for the request, and the issues 

contested. Persons may request 

notification of a hearing by writing to 

the Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F 

Street, NE., Washington, DC 20549–

1090. Applicants, 99 Park Avenue, 8th 

Floor, New York, NY 10016. 

FOR FURTHER INFORMATION CONTACT: 

Christine Y. Greenlees, Senior Counsel, 

at (202) 551–6879, or Mary Kay Frech, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Office of Investment Company 

Regulation). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained for a fee at the 

Commission’s Public Reference Branch, 

100 F Street NE., Washington DC 

20549–0102 (tel. 202–551–5850). 

Applicants’ Representations 

1. The Trust is an open-end 

management investment company 

registered under the Act and organized 

as a Delaware statutory trust. The Trust 

is organized as a series fund with 

multiple series. The Adviser, an 

investment adviser registered under the 

Investment Advisers Act of 1940 

(‘‘Advisers Act’’), will serve as 

investment adviser to each Foreign 

Fund. In the future, the Adviser may 

enter into sub-advisory agreements with 

other investment advisers to act as ‘‘subadvisers’’ with respect to particular 

Foreign Funds. Any sub-adviser will be 

registered under the Advisers Act. The 

Distributor, a broker-dealer registered 

under the Securities Exchange Act of 

1934 (the ‘‘Exchange Act’’), is expected 

to serve as the principal underwriter 

and distributor of each Foreign Fund’s 

Creation Units. 

2. The Trust is currently permitted to 

offer several series based on domestic 

equity securities indices in reliance on 

the Prior Order (‘‘Funds’’). Applicants 

seek to amend the Prior Order to permit 

the Trust to offer the two Additional 

Funds and Future Foreign Funds, each 

of which, except as described in the 

application, would operate in a manner 

identical to the Funds. 

3. The Additional Funds will invest 

in portfolios of securities consisting 

predominantly of the component 

securities of the Ardour Global 

Alternative Energy Index (Extra Liquid) 

and the Ardour Global Alternative 

Energy Index (Composite) (each, an 

‘‘Underlying Index’’ and together, the 

‘‘Underlying Indexes’’). The Underlying 

Indexes are rules based, capitalization 

weighted, float adjusted indices that 

include companies principally engaged 

in at least one of the following five 

industry segments: Alternative energy 

resources, distributed generation, 

environmental technologies, energy 

efficiency and/or enabling technologies. 

Currently, the Ardour Global 

Alternative Energy Index (Composite) is 

comprised of over 200 individual stocks 

that are traded on a North American, 

European or Asian stock exchange. The 

Ardour Global Alternative Energy Index 

(Extra Liquid) is comprised of thirty 

stocks that are selected from the Ardour 

Global Alternative Energy Index 

(Composite) that have achieved the 

highest average daily trading volumes 

for the prior three months. No entity 

that creates, compiles, sponsors, or 

maintains an Underlying Index is or 

will be an affiliated person, as defined 

in section 2(a)(3) of the Act, or an 

affiliated person of an affiliated person, 

of the Trust, the Adviser, the 

Distributor, promoter, or any subadviser to a Foreign Fund. 

4. Applicants state that all discussions 

contained in the application for the 

Prior Order are equally applicable to the 

Foreign Funds, except as specifically 

noted by applicants (as summarized in 

this notice). Applicants assert that the 


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