46062 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

5 If the fund has been in operation fewer than two 

years, the measured period will begin immediately 

following the fund’s first public offering. 

6 If the fund has been in operation fewer than five 

years, the measured period will begin immediately 

following the fund’s first public offering. 

the continuation, or continuation after 

amendment, of the Plan 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. 

VI. Public Offerings: The fund will not 

make a public offering of the fund’s 

common shares 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 VI.A and VI.B 

above, unless, with respect to such other 

offering: 

1. The fund’s average annual 

distribution rate for the six months 

ending on the last day of the month 

ended immediately prior to the most 

recent distribution declaration date,5

expressed as a percentage of NAV per 

share 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; 6

and 

2. 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 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 preferred stock that such 

fund may issue. 

VII. Amendments to Rule 19b–1: The 

requested order will expire on the 

effective date of any amendments to rule 

19b–1 that provide 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. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18150 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28347; 812–13456] 

Goldman Sachs Trust, et al.; Notice of 

Application 

July 31, 2008. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

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

Investment Company Act of 1940 

(‘‘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 

for an exemption from section 17(a) of 

the Act. 

SUMMARY OF THE APPLICATION: 

Applicants request an order that would 

permit certain registered open-end 

management investment companies to 

acquire shares of other registered openend management investment companies 

and unit investment trusts that are 

within and outside the same group of 

investment companies. 

APPLICANTS: Goldman Sachs Trust 

(‘‘GST’’), Goldman Sachs Variable 

Insurance Trust (‘‘VIT,’’ and together 

with GST, the ‘‘Trusts’’), Goldman 

Sachs Asset Management, L.P. 

(‘‘GSAM’’) and Goldman Sachs Asset 

Management International (‘‘GSAMI,’’

and together with GSAM, the 

‘‘Advisers’’). 

FILING DATES: The application was filed 

on November 27, 2007 and amended on 

May 29, 2008. 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 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 August 25, 2008, 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, c/o Jack W. Murphy, 

Esq., Dechert LLP, 1775 I Street, NW., 

Washington, DC 20006–2401. 

FOR FURTHER INFORMATION CONTACT: 

Barbara T. Heussler, Senior Counsel, at 

(202) 551–6990, or Marilyn Mann, 

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 Desk, 

100 F Street, NE., Washington, DC 

20549–1520 (telephone (202) 551–5850). 

Applicants’ Representations 

1. The Trusts, organized as Delaware 

statutory trusts, are registered under the 

Act as open-end management 

investment companies and offer 

multiple series, each of which has its 

own distinct investment objectives and 

policies (‘‘Funds’’). GST currently offers 

86 Funds and VIT offers 11 Funds. 

Shares of the Trusts are registered under 

the Securities Act of 1933, as amended 

(the ‘‘1933 Act’’). Shares of GST are 

offered directly to the public. Shares of 

VIT are not offered directly to the public 

but only to insurance company separate 

accounts (‘‘Separate Accounts’’) that 

fund variable annuity and variable life 

insurance contracts (‘‘Variable 

Contracts’’) issued by participating 

insurance companies. The Separate 

Accounts may be registered under the 

Act (‘‘Registered Separate Accounts’’), 

or unregistered thereunder 

(‘‘Unregistered Separate Accounts’’). 

2. GSAM is a Delaware limited 

partnership and a wholly-owned 

subsidiary of The Goldman Sachs 

Group, Inc. GSAM is a registered 

investment adviser under the 

Investment Advisers Act of 1940, as 

amended (the ‘‘Advisers Act’’) and 

serves as investment adviser for eightysix of the Funds. GSAMI is a company 

organized under the laws of England 

and Wales and is a registered 

investment adviser under the Advisers 

Act. GSAMI is indirectly wholly-owned 

by The Goldman Sachs Group, Inc. 

3. Applicants request relief to permit: 

(a) A Fund (each a ‘‘Fund of Funds’’) to 

acquire shares of registered open-end 

management investment companies (the 

‘‘Unaffiliated Investment Companies’’) 

and unit investment trusts (‘‘UITs’’) that 

are not part of the same ‘‘group of 

investment companies’’ as defined in 

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

(‘‘Unaffiliated Trusts,’’ and together 

with Unaffiliated Investment 

Companies, the ‘‘Unaffiliated Funds’’); 

(b) the Unaffiliated Investment 

Companies, their principal underwriters 


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1Applicants request that the order extend to any 

future series of the Trusts, and any other existing 

or future registered open-end management 

investment companies and their series that are part 

of the same group of investment companies, as 

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

Trusts and are, or may in the future be, advised by 

the Advisers or any other investment adviser 

controlling, controlled by, or under common 

control with the Advisers (included in the term, 

‘‘Funds’’). The Trusts are the only registered 

investment companies that currently intend to rely 

on the requested order. Any other entity that relies 

on the order in the future will comply with the 

terms and conditions of the application. 

and any broker or dealer (‘‘Broker’’) 

registered under the Securities 

Exchange Act of 1934 to sell their shares 

to the Fund of Funds; (c) the Fund of 

Funds to acquire shares of certain other 

Funds in the same group of investment 

companies as the Fund of Funds (the 

‘‘Affiliated Funds,’’ and together with 

the Unaffiliated Funds, the ‘‘Underlying 

Funds’’); and (d) the Affiliated Funds, 

their principal underwriters and any 

Brokers to sell their shares to the Fund 

of Funds.1 Certain of the Unaffiliated 

Funds have obtained exemptions from 

the Commission to permit their shares 

to be listed and traded on a national 

securities exchange at negotiated prices 

(‘‘ETFs’’). Each Fund of Funds may also 

invest in other securities and financial 

instruments that are not issued by 

registered investment companies and 

are consistent with its investment 

objective and restrictions. 

Applicants’ Legal Analysis 

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 and any broker or dealer 

from selling the shares of the investment 

company 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. 

2. 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. 

Applicants seek an exemption under 

section 12(d)(1)(J) of the Act from the 

limitations of sections 12(d)(1)(A) and 

(B) to the extent necessary to permit the 

Funds of Funds to acquire shares of the 

Underlying Funds in excess of the limits 

set forth in section 12(d)(1)(A) of the Act 

and to permit the Unaffiliated 

Investment Companies and Affiliated 

Funds, their principal underwriters and 

any Broker to sell their shares to the 

Funds of Funds in excess of the limits 

set forth in section 12(d)(1)(B) of the 

Act. 

3. Applicants state that the proposed 

arrangement will not give rise to the 

policy concerns underlying sections 

12(d)(1)(A) and (B), which include 

concerns about undue influence by a 

fund of funds or its affiliated persons 

over underlying funds, excessive 

layering of fees, and overly complex 

fund structures. Accordingly, applicants 

believe that the requested exemption is 

consistent with the public interest and 

the protection of investors. 

4. Applicants state that the proposed 

arrangement will not result in undue 

influence by a Fund of Funds or its 

affiliated persons over the Underlying 

Funds. The concern about undue 

influence does not arise in connection 

with a Fund of Funds’ investment in the 

Affiliated Funds, since they are part of 

the same group of investment 

companies. To limit the control that a 

Fund of Funds or its affiliated persons 

may have over an Unaffiliated Fund, 

applicants submit that: (a) the Advisers 

and any person controlling, controlled 

by or under common control with the 

Advisers, any investment company and 

any issuer that would be an investment 

company but for section 3(c)(1) or 

section 3(c)(7) of the Act advised or 

sponsored by the Advisers or any 

person controlling, controlled by or 

under common control with the 

Advisers (collectively, the ‘‘Group’’); 

and (b) any investment adviser within 

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

Act to a Fund of Funds (‘‘Sub-Adviser’’) 

and any person controlling, controlled 

by or under common control with the 

Sub-Adviser, 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 by the Sub-Adviser or any 

person controlling, controlled by or 

under common control with the SubAdviser (collectively, the ‘‘Sub-Adviser 

Group’’) will not control (individually 

or in the aggregate) an Unaffiliated Fund 

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

the Act. 

5. Applicants further state that 

condition 2 below precludes a Fund of 

Funds or the Advisers, any Sub-Adviser, 

promoter or principal underwriter of a 

Fund of Funds, as well as any person 

controlling, controlled by, or under 

common control with any of those 

entities (each, a ‘‘Fund of Funds 

Affiliate’’) from taking advantage of an 

Unaffiliated Fund with respect to 

transactions between a Fund of Funds 

or a Fund of Funds Affiliate and the 

Unaffiliated Fund or its investment 

adviser(s), sponsor, promoter, and 

principal underwriter and any person 

controlling, controlled by or under 

common control with any of those 

entities (each, an ‘‘Unaffiliated Fund 

Affiliate’’). No Fund of Funds or Fund 

of Funds Affiliate (except to the extent 

it is acting in its capacity as an 

investment adviser to an Unaffiliated 

Investment Company or sponsor to an 

Unaffiliated Trust) will cause an 

Unaffiliated Fund to purchase a security 

in an offering of securities during the 

existence of any underwriting or selling 

syndicate of which a principal 

underwriter is an officer, director, 

trustee, advisory board member, 

investment adviser, Sub-Adviser or 

employee of the Fund of Funds, or a 

person of which any such officer, 

director, trustee, investment adviser, 

Sub-Adviser, member of an advisory 

board, or employee is an affiliated 

person (each, an ‘‘Underwriting 

Affiliate,’’ except any person whose 

relationship to the Unaffiliated 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. To further assure that an 

Unaffiliated Investment Company 

understands the implications of a Fund 

of Funds’ investment under the 

requested exemptive relief, prior to its 

investment in the shares of an 

Unaffiliated Investment Company in 

excess of the limit in section 

12(d)(1)(A)(i) of the Act, a Fund of 

Funds and the Unaffiliated Investment 

Company will execute an agreement 

stating, without limitation, that their 

boards of directors or trustees 

(‘‘Boards’’) and their investment 

advisers understand the terms and 

conditions of the order and agree to 

fulfill their responsibilities under the 

order (‘‘Participation Agreement’’). 

Applicants note that an Unaffiliated 

Fund (other than an ETF whose shares 

are purchased by a Fund of Funds in the 


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2An Unaffiliated Fund, including an ETF, would 

retain its right to reject any initial investment by a 

Fund of Funds in excess of the limits in section 

12(d)(1)(A)(i) of the Act by declining to execute the 

Participation Agreement with the Fund of Funds. 

3Applicants acknowledge that receipt of any 

compensation by (a) an affiliated person of a Fund 

of Funds, or an affiliated person of such person, for 

the purchase by the Fund of Funds of shares of an 

Underlying Fund or (b) an affiliated person of an 

Underlying Fund, or an affiliated person of such 

person, for the sale by the Underlying Fund of its 

shares to a Fund of Funds is subject to section 17(e) 

of the Act. The Participation Agreement also will 

include this acknowledgement. 

4Applicants note that a Fund of Funds generally 

would purchase and sell shares of an Unaffiliated 

Fund that operates as an ETF through secondary 

market transactions rather than through principal 

transactions with the Unaffiliated Fund. To the 

extent that a Fund of Funds purchases or redeems 

shares from an ETF that is an affiliated person, or 

an affiliated person of an affiliated person of the 

Fund of Funds, in exchange for a basket of specified 

securities as described in the application for the 

exemptive order upon which the ETF relies, 

applicants also request relief from section 17(a) for 

those transactions. 

secondary market) will retain its right at 

all times to reject any investment by a 

Fund of Funds.2

7. Applicants do not believe that the 

proposed arrangement will involve 

excessive layering of fees. To assure that 

the advisory fees are not duplicative, 

applicants state that, in connection with 

the approval of any advisory contract 

under section 15 of the Act, the Board 

of each Fund of Funds, including a 

majority of the trustees who are not 

‘‘interested persons,’’ as defined in 

section 2(a)(19) of the Act 

(‘‘Independent Trustees’’) will find that 

the advisory fees charged under the 

advisory contract are based on services 

provided that are in addition to, rather 

than duplicative of, services provided 

pursuant to any Underlying Fund’s 

advisory contract(s). Applicants further 

state that an Adviser will waive fees 

otherwise payable to it by a Fund of 

Funds in an amount at least equal to any 

compensation (including fees received 

pursuant to any plan adopted by an 

Unaffiliated Investment Company 

pursuant to rule 12b–1 under the Act) 

received from an Unaffiliated Fund by 

the Adviser, or an affiliated person of 

the Adviser, other than any advisory 

fees paid to the Adviser or an affiliated 

person of the Adviser by the 

Unaffiliated Fund, in connection with 

the investment by the Fund of Funds in 

the Unaffiliated Fund. 

8. Applicants state that with respect 

to Registered Separate Accounts that 

invest in a Fund of Funds, no sales load 

will be charged at the Fund of Funds 

level or at the Underlying Fund level. 

Other sales charges and service fees, as 

defined in Rule 2830 of the Conduct 

Rules of the National Association of 

Securities Dealers (‘‘NASD Conduct 

Rule 2830’’), will only be charged at the 

Fund of Funds level or at the 

Underlying Fund level, not both. With 

respect to other investments in a Fund 

of Funds, any sales charges and/or 

service fees charged with respect to 

shares of a Fund of Funds will not 

exceed the limits applicable to funds of 

funds set forth in NASD Conduct Rule 

2830. 

9. Applicants represent that each 

Fund of Funds will represent in the 

Participation Agreement that no 

insurance company sponsoring a 

Registered Separate Account funding 

Variable Contracts will be permitted to 

invest in the Fund of Funds unless the 

insurance company has certified to the 

Fund of Funds that the aggregate of all 

fees and charges associated with each 

contract that invests in the Fund of 

Funds, including fees and charges at the 

separate account, Fund of Funds, and 

Underlying Fund levels, are reasonable 

in relation to the services rendered, the 

expenses expected to be incurred, and 

the risks assumed by the insurance 

company. 

10. Applicants state that the proposed 

arrangement will not create an overly 

complex fund structure because no 

Underlying Fund will acquire securities 

of any other investment company or 

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

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

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

Act, except in certain circumstances 

identified in condition 12 below. 

Applicants also represent that a Fund of 

Funds’ prospectus and sales literature 

will contain clear, concise, ‘‘plain 

English’’ disclosure designed to inform 

investors about the unique 

characteristics of the proposed 

arrangement, including, but not limited 

to, the expense structure and the 

additional expenses of investing in 

Underlying Funds. 

B. Section 17(a) 

1. Section 17(a) of the Act generally 

prohibits sales or purchases of securities 

between a registered investment 

company and its affiliated persons or 

affiliated persons of such persons. 

Section 2(a)(3) of the Act defines an 

‘‘affiliated person’’ of another person to 

include: (a) Any person directly or 

indirectly owning, controlling, or 

holding with power to vote, 5% or more 

of the outstanding voting securities of 

the other person; (b) 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 (c) any 

person directly or indirectly controlling, 

controlled by, or under common control 

with the other person. 

2. Applicants state that the Funds of 

Funds and the Affiliated Funds may be 

deemed to be under common control of 

the Adviser and therefore affiliated 

persons of one another. Applicants also 

state that a Fund of Funds and the 

Underlying Funds may be deemed to be 

affiliated persons of each other if a Fund 

of Funds acquires 5% or more of an 

Underlying Fund’s outstanding voting 

securities. In light of these possible 

affiliations, section 17(a) could prevent 

an Underlying Fund from selling shares 

to and redeeming shares from a Fund of 

Funds.3

3. Section 17(b) of the Act authorizes 

the Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that: (a) The terms of the proposed 

transaction are fair and reasonable 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 concerned; 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. 

4. Applicants submit that the 

proposed transactions satisfy the 

requirements for relief under sections 

17(b) and 6(c) of the Act as the terms are 

fair and reasonable and do not involve 

overreaching. Applicants state that the 

terms upon which an Underlying Fund 

will sell its shares to or purchase its 

shares from a Fund of Funds will be 

based on the net asset value of each 

Underlying Fund.4 Applicants also state 

that the proposed transactions will be 

consistent with the policies of each 

Fund of Funds and Underlying Fund, 

and with the general purposes of the 

Act. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief shall be 

subject to the following conditions: 

1. The members of the Group will not 

control (individually or in the aggregate) 

an Unaffiliated Fund within the 

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

The members of a Sub-Adviser Group 

will not control (individually or in the 

aggregate) an Unaffiliated Fund within 

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

If, as a result of a decrease in the 


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outstanding voting securities of an 

Unaffiliated Fund, the Group or a SubAdviser Group, each in the aggregate, 

becomes a holder of more than 25% of 

the outstanding voting securities of the 

Unaffiliated Fund, then the Group or the 

Sub-Adviser Group (except for any 

member of the Group or the SubAdviser Group that is a Separate 

Account) will vote its shares of the 

Unaffiliated Fund in the same 

proportion as the vote of all other 

holders of the Unaffiliated Fund’s 

shares. This condition will not apply to 

a Sub-Adviser Group with respect to an 

Unaffiliated Fund for which the SubAdviser or a person controlling, 

controlled by, or under common control 

with the Sub-Adviser acts as the 

investment adviser within the meaning 

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

case of an Unaffiliated Investment 

Company) or as the sponsor (in the case 

of an Unaffiliated Trust). 

A Registered Separate Account will 

seek voting instructions from its 

Variable Contract holders and will vote 

its shares of an Unaffiliated Fund in 

accordance with the instructions 

received and will vote those shares for 

which no instructions were received in 

the same proportion as the shares for 

which instructions were received. An 

Unregistered Separate Account will 

either (i) vote its shares of the 

Unaffiliated Fund in the same 

proportion as the vote of all other 

holders of the Unaffiliated Fund’s 

shares; or (ii) seek voting instructions 

from its Variable Contract holders and 

vote its shares in accordance with the 

instructions received and vote those 

shares for which no instructions were 

received in the same proportion as the 

shares for which instructions were 

received. 

2. No Fund of Funds or Fund of 

Funds Affiliate will cause any existing 

or potential investment by the Fund of 

Funds in an Unaffiliated Fund to 

influence the terms of any services or 

transactions between the Fund of Funds 

or a Fund of Funds Affiliate and the 

Unaffiliated Fund or an Unaffiliated 

Fund Affiliate. 

3. The Board of each Fund of Funds, 

including a majority of the Independent 

Trustees, will adopt procedures 

reasonably designed to assure that the 

Adviser and any Sub-Adviser to the 

Fund of Funds are conducting the 

investment program of the Fund of 

Funds without taking into account any 

consideration received by the Fund of 

Funds or Fund of Funds Affiliate from 

an Unaffiliated Fund or an Unaffiliated 

Fund Affiliate in connection with any 

services or transactions. 

4. Once an investment by a Fund of 

Funds in the securities of an 

Unaffiliated Investment Company 

exceeds the limit of section 

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

the Unaffiliated Investment Company, 

including a majority of the Independent 

Trustees, will determine that any 

consideration paid by the Unaffiliated 

Investment Company to a Fund of 

Funds or a Fund of Funds Affiliate in 

connection with any services or 

transactions: (a) Is fair and reasonable in 

relation to the nature and quality of the 

services and benefits received by the 

Unaffiliated Investment Company; (b) is 

within the range of consideration that 

the Unaffiliated Investment Company 

would be required to pay to another 

unaffiliated entity in connection with 

the same services or transactions; and 

(c) 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 

Unaffiliated Investment Company and 

its investment adviser(s), or any person 

controlling, controlled by, or under 

common control with such investment 

adviser(s). 

5. No Fund of Funds or Fund of 

Funds Affiliate (except to the extent it 

is acting in its capacity as an investment 

adviser to an Unaffiliated Investment 

Company or sponsor to an Unaffiliated 

Trust) will cause an Unaffiliated Fund 

to purchase a security in any Affiliated 

Underwriting. 

6. The Board of an Unaffiliated 

Investment Company, including a 

majority of the Independent Trustees, 

will adopt procedures reasonably 

designed to monitor any purchases of 

securities by the Unaffiliated Investment 

Company in an Affiliated Underwriting 

once an investment by a Fund of Funds 

in the securities of the Unaffiliated 

Investment Company exceeds the limit 

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

including any purchases made directly 

from an Underwriting Affiliate. The 

Board of the Unaffiliated Investment 

Company will review these procedures 

periodically, but no less frequently than 

annually, to determine whether the 

purchases were influenced by the 

investment by the Fund of Funds in the 

Unaffiliated Investment Company. The 

Board of the Unaffiliated Investment 

Company will consider, among other 

things: (a) Whether the purchases were 

consistent with the investment 

objectives and policies of the 

Unaffiliated Investment Company; (b) 

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 (c) 

whether the amount of securities 

purchased by the Unaffiliated 

Investment Company in Affiliated 

Underwritings and the amount 

purchased directly from an 

Underwriting Affiliate have changed 

significantly from prior years. The 

Board of an Unaffiliated Investment 

Company will take any appropriate 

actions based on its review, including, 

if appropriate, the institution of 

procedures designed to assure that 

purchases of securities in Affiliated 

Underwritings are in the best interests 

of shareholders. 

7. Each Unaffiliated Investment 

Company 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 from an Affiliated 

Underwriting occurred, the first two 

years in an easily accessible place, a 

written record of each purchase of 

securities in an Affiliated Underwriting 

once an investment by a Fund of Funds 

in the securities of an Unaffiliated 

Investment Company exceeds the limit 

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

setting forth the: (a) Party from whom 

the securities were acquired, (b) identity 

of the underwriting syndicate’s 

members, (c) terms of the purchase, and 

(d) information or materials upon which 

the determinations of the Board of the 

Unaffiliated Investment Company were 

made. 

8. Prior to its investment in shares of 

an Unaffiliated Investment Company in 

excess of the limit in section 

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

Funds and the Unaffiliated Investment 

Company will execute a Participation 

Agreement stating, without limitation, 

that their Boards and their investment 

advisers 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 Unaffiliated Investment 

Company in excess of the limit in 

section 12(d)(1)(A)(i), a Fund of Funds 

will notify the Unaffiliated Investment 

Company of the investment. At such 

time, the Fund of Funds will also 

transmit to the Unaffiliated Investment 

Company a list of the names of each 

Fund of Funds Affiliate and 

Underwriting Affiliate. The Fund of 

Funds will notify the Unaffiliated 

Investment Company of any changes to 

the list as soon as reasonably practicable 


sroberts on PROD1PC70 with NOTICES
46066 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

after a change occurs. The Unaffiliated 

Investment Company and the Fund of 

Funds will maintain and preserve a 

copy of the order, the Participation 

Agreement, and the list with any 

updated information for the duration of 

the investment and for a period of not 

less than six years thereafter, the first 

two years in an easily accessible place. 

9. Before approving any advisory 

contract under section 15 of the Act, the 

Board of each Fund of Funds, including 

a majority of the Independent Trustees, 

shall find that the advisory fees charged 

under the advisory contract are based on 

services provided that are in addition to, 

rather than duplicative of, services 

provided under the advisory contract(s) 

of any Underlying Fund in which the 

Fund of Funds may invest. Such 

finding, and the basis upon which the 

finding was made, will be recorded fully 

in the minute books of the appropriate 

Fund of Funds. 

10. The Advisers will waive fees 

otherwise payable to them by a Fund of 

Funds in an amount at least equal to any 

compensation (including fees received 

pursuant to any plan adopted by an 

Unaffiliated Investment Company 

pursuant to rule 12b-1 under the Act) 

received from an Unaffiliated Fund by 

the Adviser, or an affiliated person of 

the Adviser, other than any advisory 

fees paid to the Adviser or its affiliated 

person by the Unaffiliated Fund, in 

connection with the investment by the 

Fund of Funds in the Unaffiliated Fund. 

Any Sub-Adviser will waive fees 

otherwise payable to the Sub-Adviser, 

directly or indirectly, by the Fund of 

Funds in an amount at least equal to any 

compensation received by the SubAdviser, or an affiliated person of the 

Sub-Adviser, from an Unaffiliated Fund, 

other than any advisory fees paid to the 

Sub-Adviser or its affiliated person by 

the Unaffiliated Investment Company, 

in connection with the investment by 

the Fund of Funds in the Unaffiliated 

Investment Company made at the 

direction of the Sub-Adviser. In the 

event that the Sub-Adviser waives fees, 

the benefit of the waiver will be passed 

through to the Fund of Funds. 

11. With respect to Registered 

Separate Accounts that invest in a Fund 

of Funds, no sales load will be charged 

at the Fund of Funds level or at the 

Underlying Fund level. Other sales 

charges and service fees, as defined in 

NASD Conduct Rule 2830, if any, will 

be charged at the Fund of Funds level 

or at the Underlying Fund level, not 

both. With respect to other investments 

in a Fund of Funds, any sales charges 

and/or service fees charged with respect 

to shares of a Fund of Funds will not 

exceed the limits applicable to funds of 

funds set forth in NASD Conduct Rule 

2830. 

12. No Underlying Fund will acquire 

securities of any other investment 

company or company relying on section 

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

the limits contained in section 

12(d)(1)(A) of the Act, except to the 

extent that such Underlying Fund: (a) 

Receives securities of another 

investment company as a dividend or as 

a result of a plan of reorganization of a 

company (other than a plan devised for 

the purpose of evading section 12(d)(1) 

of the Act); or (b) acquires (or is deemed 

to have acquired) securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting such Underlying Fund to: (i) 

Acquire securities of one or more 

affiliated investment companies for 

short-term cash management purposes, 

or (ii) engage in interfund borrowing 

and lending transactions. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18069 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28350; 812–13425] 

Javelin Exchange-Traded Trust, et al.; 

Notice of Application 

July 31, 2008. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) for an exemption from sections 

2(a)(32), 5(a)(1), 22(d), 22(e) and 24(d) of 

the Act and rule 22c–1 under the Act, 

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

from sections 17(a)(1) and (a)(2) of the 

Act. 

SUMMARY OF APPLICATION: Applicants 

request an order that would permit (a) 

series of open-end management 

investment companies to issue shares 

(‘‘Fund Shares’’) that can be redeemed 

only in large aggregations (‘‘Creation 

Unit Aggregations’’); (b) secondary 

market transactions in Fund Shares to 

occur at negotiated prices; (c) dealers to 

sell Fund 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 

series to pay redemption proceeds, 

under certain circumstances, more than 

seven days after the tender of a Creation 

Unit Aggregation for redemption; (e) 

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 Unit Aggregations; and (f) 

certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

series to acquire Fund Shares. 

APPLICANTS: Javelin Exchange-Traded 

Trust (the ‘‘Trust’’), Javelin Investment 

Management, LLC (the ‘‘Adviser’’) and 

ALPS Distributors, Inc. (the 

‘‘Distributor’’). 

FILING DATES: The application was filed 

on September 21, 2007, and amended 

on May 9, 2008 and July 31, 2008. 

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 August 25, 2008, 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, c/o Brinton W. Frith, 

Javelin Investment Management, LLC, 

338 The Great Road, Princeton, NJ 

08540. 

FOR FURTHER INFORMATION CONTACT: John 

Yoder, Senior Counsel, at (202) 551–

6878, 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 Public 

Reference Room, U.S. Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1520, 

telephone (202) 551–5850. 


sroberts on PROD1PC70 with NOTICES