57696 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 

4Rule 15c6–1 under the Exchange Act requires 

that most securities transactions be settled within 

three business days of the trade. Applicants 

acknowledge that no relief obtained from the 

requirements of section 22(e) will affect any 

obligations applicants may have under rule 

15c6–1. 

suspending the right of redemption or 

postponing the date of payment of 

redemption proceeds for more than 

seven days after the tender of a security 

for redemption. Applicants state that the 

settlement of redemptions for the 

Foreign Funds is contingent not only on 

the settlement cycle of the markets in 

the United States, but also on currently 

practicable delivery cycles in local 

markets for the foreign securities held 

by the Foreign Funds. Applicants state 

that local market delivery cycles for 

transferring certain foreign securities to 

investors redeeming Creation Units, 

together with local market holiday 

schedules, will under certain 

circumstances require a delivery process 

in excess of seven calendar days for the 

Foreign Funds. Applicants request relief 

under section 6(c) of the Act from 

section 22(e) in such circumstances to 

allow the Foreign Funds to pay 

redemption proceeds up to 14 calendar 

days after the tender of any Creation 

Unit for redemption. Except as 

disclosed in the Foreign Fund’s 

prospectus or statement of additional 

information (‘‘SAI’’), applicants expect 

that each Foreign Fund will be able to 

deliver redemption proceeds within 

seven days.4 With respect to Future 

Foreign Funds, applicants seek the same 

relief from section 22(e) only to the 

extent that circumstances similar to 

those described in the application exist. 

2. Applicants state that section 22(e) 

was designed to prevent unreasonable, 

undisclosed and unforeseen delays in 

the payment of redemption proceeds. 

Applicants assert that the requested 

relief will not lead to the problems that 

section 22(e) was designed to prevent. 

Applicants state that the SAI for each 

Foreign Fund will disclose those local 

holidays (over the period of at least one 

year following the date of the SAI), if 

any, that are expected to prevent the 

delivery of redemption proceeds in 

seven calendar days, and the maximum 

number of days needed to deliver the 

proceeds for the relevant Foreign Fund. 

Applicants are not seeking relief from 

section 22(e) of the Act with respect to 

Foreign Funds that do not effect 

creations and redemptions of Creation 

Units in-kind. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the same conditions as the 

Prior Order. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23346 Filed 10–2–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28419; 812–13458] 

WisdomTree Asset Management, Inc. 

and WisdomTree Trust; Notice of 

Application 

September 29, 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 

(‘‘Act’’) for an exemption from sections 

2(a)(32), 5(a)(1) and 22(d) of the Act and 

rule 22c–1 under the Act, and under 

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

exemption from section 17(a) of the Act, 

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

exemption from sections 12(d)(1)(A) and 

(B) of the Act. 

APPLICANTS: WisdomTree Asset 

Management, Inc. (the ‘‘Advisor’’) and 

WisdomTree Trust (the ‘‘Trust’’). 

SUMMARY OF APPLICATION: Applicants 

request an order that permits: (a) Series 

of certain open-end management 

investment companies that utilize active 

management investment strategies to 

issue shares (‘‘Shares’’) redeemable in 

large aggregations only (‘‘Creation 

Units’’); (b) secondary market 

transactions in Shares to occur at 

negotiated market prices; (c) 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 (d) certain registered 

management investment companies and 

unit investment trusts outside of the 

same group of investment companies as 

the series to acquire Shares. 

FILING DATES: The application was filed 

on December 5, 2007 and amended on 

April 15, 2008 and September 26, 2008. 

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 October 24, 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, 380 Madison Avenue, 

21st Floor, New York, New York 10017. 

FOR FURTHER INFORMATION CONTACT: 

Laura J. Riegel, Senior Counsel at (202) 

551–6873, or Marilyn Mann, 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 Room, 

100 F Street, NE., Washington, DC 

20549–1520 (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 

will offer four new series: WisdomTree 

U.S. Equity Fund, WisdomTree 

International Equity Fund, WisdomTree 

Domestic Total Return Bond Fund, and 

WisdomTree International Total Return 

Bond (collectively, the ‘‘New Funds’’). 

The New Funds may invest in equity 

securities or fixed income securities 

traded in the U.S. or non-U.S. markets. 

Applicants request that the order apply 

to any future series of the Trust or of 

other open-end management companies 

that also may invest in equity securities 

or fixed-income securities traded in the 

U.S. or non-U.S. markets (‘‘Future 

Funds’’). Any Future Fund will be (a) 

advised by the Advisor or an entity 

controlling, controlled by, or under 

common control with the Advisor, and 

(b) comply with the terms and 

conditions of the order. The New Funds 

and Future Funds together are the 

‘‘Funds.’’ Each Fund will operate as an 

actively-managed exchange-traded fund 

(‘‘ETF’’). 

2. The Advisor, a Delaware 

corporation, is registered as an 

investment adviser under the 

Investment Advisers Act of 1940 

(‘‘Advisers Act’’) and serves as 

investment adviser to each Fund. The 

Advisor and the Trust may retain one or 

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Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57697 

1All entities that currently intend to rely on the 

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. An 

Investing Fund (as defined below) may rely on the 

order only to invest in Funds and not in any other 

registered investment company. 

2 In addition to the list of names and amount of 

each security constituting the current Deposit 

Securities, it is intended that, on each day that a 

Fund is open, including as required by section 22(e) 

of the Act (‘‘Business Day’’), the Cash Component 

effective as of the previous Business Day, will be 

made available. The Exchange (as defined below) 

intends to disseminate, every 15 seconds, during 

regular trading hours, through the facilities of the 

Consolidated Tape Association, an approximate 

amount per Share representing the sum of the 

estimated Cash Component, plus the current value 

of the Deposit Securities, on a per Share basis. 

3Where a Fund permits a purchaser to substitute 

cash in lieu of depositing a portion of the requisite 

Deposit Securities, the purchaser may be assessed 

a higher Transaction Fee to cover the cost of 

purchasing such Deposit Securities, including 

brokerage costs. 

4 If Shares are listed on the Nasdaq, no particular 

Market Maker will be contractually obligated to 

make a market in Shares, although Nasdaq’s listing 

requirements stipulate that at least two Market 

Makers must be registered as Market Makers in 

Shares to maintain the listing. Registered Market 

Makers are required to make a continuous, twosided market at all times or be subject to regulatory 

sanctions. 

5Shares will be registered in book-entry form 

only. DTC or its nominee will be the registered 

owner of all outstanding Shares. DTC or DTC 

Participants will maintain records reflecting 

beneficial owners of Shares. 

more subadvisers to the Funds (each, a 

‘‘Subadvisor’’). Any Subadvisor will be 

registered as an investment adviser 

under the Advisers Act. ALPS 

Distributors, Inc., a Colorado 

corporation, is registered as a brokerdealer under the Securities Exchange 

Act of 1934 (‘‘Exchange Act’’) and will 

serve as the principal underwriter and 

distributor for the Funds 

(‘‘Distributor’’).1

3. Shares of the Funds will be sold at 

a price of between $25 and $100 per 

Share in Creation Units of between 

50,000 and 100,000 Shares. All orders to 

purchase Creation Units must be placed 

with the Distributor by or through a 

party that has entered into an agreement 

with the Trust, the Distributor and the 

transfer agent to the Trust (‘‘Authorized 

Participant’’). An Authorized 

Participant must be either: (a) A brokerdealer or other participant in the 

continuous net settlement system of the 

National Securities Clearing Corporation 

(‘‘NSCC’’), or (b) a participant in the 

Depository Trust Company (‘‘DTC,’’ and 

such participant, ‘‘DTC Participant’’). 

Shares of each Fund generally will be 

sold in Creation Units in exchange for 

an in-kind deposit by the purchaser of 

a portfolio of securities designated by 

the Advisor (the ‘‘Deposit Securities’’), 

together with the deposit of a specified 

cash payment (‘‘Cash Component’’). The 

Cash Component is an amount equal to 

the difference between (a) the net asset 

value (‘‘NAV’’) per Creation Unit of the 

Fund and (b) the total aggregate market 

value per Creation Unit of the Deposit 

Securities.2 Applicants state that in 

some circumstances it may not be 

practicable or convenient for a Fund to 

operate exclusively on an ‘‘in-kind’’ 

basis. The Trust reserves the right to 

permit, under certain circumstances, a 

purchaser of Creation Units to substitute 

cash in lieu of depositing some or all of 

the Deposit Securities. 

4. An investor purchasing a Creation 

Unit from a Fund will be charged a fee 

(‘‘Transaction Fee’’) to prevent the 

dilution of the interests of the remaining 

shareholders resulting from costs in 

connection with the purchase of 

Creation Units.3 The maximum 

Transaction Fees relevant to each Fund 

will be fully disclosed in the prospectus 

(‘‘Prospectus’’) of such Fund and the 

method of calculating these Transaction 

Fees will be fully disclosed in its 

statement of additional information 

(‘‘SAI’’). All orders to purchase Creation 

Units will be placed with the Distributor 

by or through an Authorized Participant 

and it will be the Distributor’s 

responsibility to transmit such orders to 

the Trust. The Distributor also will be 

responsible for delivering the 

Prospectus to those persons purchasing 

Creation Units, and for maintaining 

records of both the orders placed with 

it and the confirmations of acceptance 

furnished by it. In addition, the 

Distributor will maintain a record of the 

instructions given to the Trust to 

implement the delivery of Shares. 

5. Purchasers of Shares in Creation 

Units may hold such Shares or may sell 

such Shares into the secondary market. 

Shares will be listed and traded at 

negotiated prices on a national 

securities exchange as defined in 

section 2(a)(26) of the Act (‘‘Exchange’’). 

It is expected that one or more member 

firms of a listing Exchange will be 

designated to act as a specialist and 

maintain a market for Shares on the 

Exchange (the ‘‘Specialist’’), or if 

Nasdaq is the listing Exchange, one or 

more member firms of Nasdaq will act 

as a market maker (‘‘Market Maker’’) 

and maintain a market for Shares.4

Prices of Shares trading on an Exchange 

will be based on the current bid/offer 

market. Shares sold in the secondary 

market will be subject to customary 

brokerage commissions and charges. 

6. Applicants expect that purchasers 

of Creation Units will include 

institutional investors and arbitrageurs. 

The Specialist, or Market Maker, in 

providing a fair and orderly secondary 

market for the Shares, also may 

purchase Creation Units for use in its 

market-making activities. Applicants 

expect that secondary market 

purchasers of Shares will include both 

institutional investors and retail 

investors.5 Applicants expect that the 

price at which the Shares trade will be 

disciplined by arbitrage opportunities 

created by the ability to continually 

purchase or redeem Creation Units at 

their NAV, which should ensure that 

the Shares will not trade at a material 

discount or premium in relation to their 

NAV. 

7. Shares will not be individually 

redeemable, and owners of Shares may 

acquire those Shares from a Fund, or 

tender such Shares for redemption to 

the Fund, in Creation Units only. To 

redeem, an investor will have to 

accumulate enough Shares to constitute 

a Creation Unit. Redemption orders 

must be placed by or through an 

Authorized Participant. An investor 

redeeming a Creation Unit generally 

will receive (a) a portfolio of securities 

designated to be delivered for Creation 

Unit redemptions on the date that the 

request for redemption is submitted 

(‘‘Fund Securities’’), which may not be 

identical to the Deposit Securities 

required to purchase Creation Units on 

that date, and (b) a ‘‘Cash Redemption 

Amount,’’ that is cash in an amount 

equal to the difference between the NAV 

of the Shares being redeemed and the 

market value of the Fund Securities. An 

investor may receive the cash equivalent 

of a Fund Security in certain 

circumstances, such as if the investor is 

constrained from effecting transactions 

in the security by regulation or policy. 

A redeeming investor will pay a 

Transaction Fee, calculated in the same 

manner as a Transaction Fee payable in 

connection with purchases of Creation 

Units. 

8. Neither the Trust nor any 

individual Fund will be marketed or 

otherwise held out as an ‘‘open-end 

investment company’’ or a ‘‘mutual 

fund.’’ Instead, each Fund will be 

marketed as an ‘‘actively-managed 

exchange-traded fund.’’ All marketing 

materials that describe the method of 

obtaining, buying or selling Shares, or 

refer to redeemability, will prominently 

disclose that Shares are not individually 

redeemable and that the owners of 

Shares may purchase or redeem Shares 

from a Fund in Creation Units only. The 

same approach will be followed in the 

SAI, shareholder reports and any 

marketing or advertising materials 

issued or circulated in connection with 

the Shares. The Funds will provide 

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57698 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 

6Applicants note that under accounting 

procedures followed by the Funds, trades made on 

the prior Business Day (‘‘T’’) will be booked and 

reflected in NAV on the current Business Day (‘‘T 

+ 1’’). Accordingly, the Funds will be able to 

disclose at the beginning of the Business Day the 

portfolio that will form the basis for the NAV 

calculation at the end of the Business Day. 

copies of their annual and semi-annual 

shareholder reports to DTC Participants 

for distribution to beneficial owners of 

Shares. 

9. The Funds’ Web site will include 

the Prospectus and information about 

the Funds that is updated on a daily 

basis, including the mid-point of the 

bid-ask spread at the time of the 

calculation of NAV (‘‘Bid/Ask Price’’). 

On each Business Day, before the 

commencement of trading in Shares on 

the Exchange, each Fund will disclose 

the identities and quantities of the 

securities (‘‘Portfolio Securities’’) and 

other assets held in the Fund portfolio 

that will form the basis for the Fund’s 

calculation of NAV at the end of the 

Business Day.6

Applicants’ Legal Analysis 

1. Applicants request an order under 

section 6(c) of the Act granting an 

exemption from sections 2(a)(32), 5(a)(1) 

and 22(d) of the Act and rule 22c–1 

under the Act; and under sections 6(c) 

and 17(b) of the Act granting an 

exemption from sections 17(a) of the 

Act, and under section 12(d)(1)(J) for an 

exemption from sections 12(d)(1)(A) and 

(B) of the Act. 

2. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security or transaction, or any 

class of persons, securities or 

transactions, from any provision of the 

Act, if and to the extent that such 

exemption is necessary or appropriate 

in the public interest and consistent 

with the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the Act. Section 17(b) 

of the Act authorizes the Commission to 

exempt a proposed transaction from 

section 17(a) of the Act if evidence 

establishes that the terms of the 

transaction, including the consideration 

to be paid or received, are reasonable 

and fair and do not involve 

overreaching on the part of any person 

concerned, and the proposed 

transaction is consistent with the 

policies of the registered investment 

company and the general provisions of 

the Act. 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. 

Sections 5(a)(1) and 2(a)(32) of the Act 

3. Section 5(a)(1) of the Act defines an 

‘‘open-end company’’ as a management 

investment company that is offering for 

sale or has outstanding any redeemable 

security of which it is the issuer. 

Section 2(a)(32) of the Act defines a 

redeemable security as any security, 

other than short-term paper, under the 

terms of which the holder, upon its 

presentation to the issuer, is entitled to 

receive approximately his proportionate 

share of the issuer’s current net assets, 

or the cash equivalent. Because Shares 

will not be individually redeemable, 

applicants request an order that would 

permit each Fund, as a series of an 

open-end management investment 

company, to issue Shares that are 

redeemable in Creation Units only. 

Applicants state that investors may 

purchase Shares in Creation Units from 

each Fund and redeem Creation Units 

from each Fund. Applicants further 

state that because the market price of 

Shares will be disciplined by arbitrage 

opportunities, investors should be able 

to sell Shares in the secondary market 

at prices that do not vary substantially 

from their NAV. 

Section 22(d) of the Act and Rule 22c– 

1 Under the Act 

4. Section 22(d) of the Act, among 

other things, prohibits a dealer from 

selling a redeemable security that is 

currently being offered to the public by 

or through a principal underwriter, 

except at a current public offering price 

described in the prospectus. Rule 22c– 

1 under the Act generally requires that 

a dealer selling, redeeming, or 

repurchasing a redeemable security do 

so only at a price based on its NAV. 

Applicants state that secondary market 

trading in Shares will take place at 

negotiated prices, not at a current 

offering price described in the 

Prospectus, and not at a price based on 

NAV. Thus, purchases and sales of 

Shares in the secondary market will not 

comply with section 22(d) of the Act 

and rule 22c–1 under the Act. 

Applicants request an exemption under 

section 6(c) from these provisions. 

5. Applicants assert that the concerns 

sought to be addressed by section 22(d) 

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

with respect to pricing are equally 

satisfied by the proposed method of 

pricing Shares. Applicants maintain that 

while there is little legislative history 

regarding section 22(d), its provisions, 

as well as those of rule 22c–1, appear to 

have been designed to (a) prevent 

dilution caused by certain risklesstrading schemes by principal 

underwriters and contract dealers, (b) 

prevent unjust discrimination or 

preferential treatment among buyers 

resulting from sales at different prices, 

and (c) assure an orderly distribution of 

investment company shares by 

eliminating price competition from 

dealers offering shares at less than the 

published sales price and repurchasing 

shares at more than the published 

redemption price. 

6. Applicants believe that none of 

these purposes will be thwarted by 

permitting Shares to trade in the 

secondary market at negotiated prices. 

Applicants state that (a) secondary 

market trading in Shares does not 

involve the Funds as parties and cannot 

result in dilution of an investment in 

Shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in Shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

contend that the proposed distribution 

system will be orderly because arbitrage 

activity will ensure that the difference 

between the market price of Shares and 

their NAV remains narrow. 

Section 12(d)(1) of the Act 

7. 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. 

8. Applicants request that the order 

permit certain investment companies 

registered under the Act to acquire 

Shares beyond the limitations in section 

12(d)(1)(A) and permit the Funds, any 

principal underwriter for the Funds, 

and any broker or dealer registered 

under the Exchange Act (‘‘Brokers’’), to 

sell Shares beyond the limitations in 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57699 

7An ‘‘Investing Fund Affiliate’’ is an Investing 

Fund Advisor, Investing Fund Subadvisor, Sponsor, 

promoter, and principal underwriter of an Investing 

Fund, and any person controlling, controlled by, or 

under common control with any of those entities. 

A ‘‘Fund Affiliate’’ is an investment adviser, 

promoter, or principal underwriter of a Fund, and 

any person controlling, controlled by, or under 

common control with any of those entities. 

section 12(d)(1)(B). Applicants request 

that these exemptions apply to: (1) any 

Fund that is currently or subsequently 

part of the same ‘‘group of investment 

companies’’ as the New Funds within 

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

the Act as well as any principal 

underwriter for the Funds and any 

Brokers selling Shares of a Fund to an 

Investing Fund (as defined below); and 

(2) each management investment 

company or unit investment trust 

registered under the Act that is not part 

of the same ‘‘group of investment 

companies’’ as the Funds within the 

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

Act and that enters into a FOF 

Participation Agreement (as defined 

below) with a Fund (such management 

investment companies are referred to 

herein as ‘‘Investing Management 

Companies,’’ such unit investment 

trusts are referred to herein as 

‘‘Investing Trusts,’’ and Investing 

Management Companies and Investing 

Trusts are ‘‘Investing Funds’’). Investing 

Funds do not include the Funds. Each 

Investing Trust will have a sponsor 

(‘‘Sponsor’’) and each Investing 

Management Company will have an 

investment adviser within the meaning 

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

(‘‘Investing Fund Advisor’’) that does 

not control, is not controlled by or 

under common control with the 

Advisor. Each Investing Management 

Company may also have one or more 

investment advisers within the meaning 

of Section 2(a)(20)(B) of the Act (each, 

an ‘‘Investing Fund Subadvisor’’). 

9. 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 

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. 

10. Applicants believe that neither the 

Investing Funds nor an Investing Fund 

Affiliate would be able to exert undue 

influence over the Funds.7 To limit the 

control that an Investing Fund may have 

over a Fund, applicants propose a 

condition prohibiting the Investing 

Fund Advisor or Sponsor; any person 

controlling, controlled by, or under 

common with the Investing Fund 

Advisor or 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 Investing 

Fund Advisor or advised or sponsored 

by the Sponsor, or any person 

controlling, controlled by, or under 

common control with the Investing 

Fund Advisor or Sponsor (‘‘Investing 

Fund’s Advisory Group’’) from 

controlling (individually or in the 

aggregate) a Fund within the meaning of 

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

prohibition would apply to any 

Investing Fund Subadvisor; any person 

controlling, controlled by, or under 

common control with the Investing 

Fund Subadvisor; 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 Investing 

Fund Subadvisor or any person 

controlling, controlled by, or under 

common control with the Investing 

Fund Subadvisor (‘‘Investing Fund’s 

Subadvisory Group’’). 

11. Applicants propose other 

conditions to limit the potential for 

undue influence over the Funds, 

including that no Investing Fund or 

Investing Fund Affiliate (except to the 

extent it is acting in its capacity as an 

investment adviser to a Fund) will cause 

a Fund to purchase a security in any 

offering of securities during the 

existence of any underwriting or selling 

syndicate of which a principal 

underwriter is an Underwriting Affiliate 

(‘‘Affiliated Underwriting’’). An 

‘‘Underwriting Affiliate’’ is a principal 

underwriter in any underwriting or 

selling syndicate that is an officer, 

director, member of an advisory board, 

Investing Fund Advisor, Investing Fund 

Subadvisor, employee or Sponsor of an 

Investing Fund, or a person of which 

any such officer, director, member of an 

advisory board, Investing Fund Advisor, 

Investing Fund Subadvisor, employee, 

or Sponsor is an affiliated person 

(except any person whose relationship 

to the Fund is covered by section 10(f) 

of the Act is not an Underwriting 

Affiliate). 

12. Applicants do not believe that the 

proposed arrangement will involve 

excessive layering of fees. The board of 

directors or trustees of each Investing 

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 Investing 

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 Fund in 

which the Investing Management 

Company may invest. In addition, the 

Investing Fund Advisor, trustee of an 

Investing Trust (‘‘Trustee’’) or Sponsor, 

as applicable, will waive fees otherwise 

payable to it by the Investing Fund in 

an amount at least equal to any 

compensation received from a Fund by 

the Investing Fund Advisor, Trustee or 

Sponsor, or an affiliated person of the 

Investing Fund Advisor, Trustee or 

Sponsor (other than any advisory fees), 

in connection with the investment by 

the Investing Fund in the Funds. 

Applicants also state that any sales 

charges and/or service fees charged with 

respect to shares of an Investing Fund 

will not exceed the limits applicable to 

a fund of funds set forth in Conduct 

Rule 2830 of the NASD (‘‘Rule 2830’’). 

13. Applicants submit that the 

proposed arrangement will not create an 

overly complex fund structure. 

Applicants note that a 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. 

14. To ensure that Investing Funds are 

aware of the terms and conditions of the 

requested order, the Investing Funds 

must enter into an agreement with the 

respective Funds (‘‘FOF Participation 

Agreement’’). The FOF Participation 

Agreement will include an 

acknowledgement from the Investing 

Fund that it may rely on the order only 

to invest in the Funds and not in any 

other investment company. The FOF 

Participation Agreement will further 

require any Investing Fund that exceeds 

the 5% or 10% limitation in section 

12(d)(1)(A)(ii) or (iii), respectively, to 

disclose in its Prospectus that it may 

invest in ETFs and disclose, in ‘‘plain 

English,’’ in its Prospectus the unique 

characteristics of the Investing Funds, 

including but not limited to the expense 

structure and any additional expenses of 

investing in investment companies. 

Section 17(a) of the Act 

15. Section 17(a) of the Act generally 

prohibits an affiliated person of a 

registered investment company, or an 

affiliated person of such a person 

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

security to or purchasing any security 

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

Act defines ‘‘affiliated person’’ to 

include any person directly or indirectly 

owning, controlling, or holding with 

power to vote 5% or more of the 

outstanding voting securities of the 

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57700 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 

8Applicants acknowledge that the receipt of 

compensation by (a) an affiliated person of an 

Investing Fund, or an affiliated person of such 

person, for the purchase by the Investing Fund of 

Shares of a Fund of Shares of a Fund or (b) an 

affiliated person of a Fund, or an affiliated person 

of such person, for the sale by the Fund of Shares 

to an Investing Fund, is subject to section 17(e)(1) 

of the Act. The FOF Participation Agreement will 

also include this acknowledgement. 

other person and any person directly or 

indirectly controlling, controlled by, or 

under common control with, the other 

person. Section 2(a)(9) of the Act 

provides that a control relationship will 

be presumed where one person owns 

more than 25% of another person’s 

voting securities. The Funds may be 

deemed to be controlled by the Advisor 

or an entity controlling, controlled by or 

under common control with the Advisor 

and hence affiliated persons of each 

other. In addition, the Funds may be 

deemed to be under common control 

with any other registered investment 

company (or series thereof) advised by 

the Advisor or an entity controlling, 

controlled by or under common control 

with the Advisor (an ‘‘Affiliated 

Fund’’).8

16. Applicants request an exemption 

from section 17(a) under sections 6(c) 

and 17(b), to permit in-kind purchases 

and redemptions by persons that are 

affiliated persons or second tier 

affiliates of the Funds solely by virtue 

of one or more of the following: (1) 

Holding 5% or more, or more than 25%, 

of the Shares of the Trust or one or more 

Funds; (2) an affiliation with a person 

with an ownership interest described in 

(1); or (3) holding 5% or more, or more 

than 25%, of the shares of one or more 

Affiliated Funds. Applicants also 

request an exemption in order to permit 

each Fund to sell Shares to and redeem 

Shares from, and engage in the in-kind 

transactions that would accompany 

such sales and redemptions with, any 

Investing Fund of which it is an 

affiliated person or second tier affiliate 

because of one or more of the following: 

(1) The Investing Fund holds 5% or 

more of the Shares of the Trust or one 

or more Funds; (2) an Investing Fund 

described in (1) is an affiliated person 

of the Investing Fund; or (3) the 

Investing Fund holds 5% or more of the 

shares of one or more Affiliated Funds. 

17. Applicants contend that no useful 

purpose would be served by prohibiting 

affiliated persons or second tier 

affiliates of a Fund from purchasing or 

redeeming Creation Units through ‘‘inkind’’ transactions. The deposit 

procedure for in-kind purchases and the 

redemption procedure for in-kind 

redemptions will be the same for all 

purchases and redemptions. Deposit 

Securities and Fund Securities will be 

valued under the same objective 

standards applied to valuing Portfolio 

Securities. Therefore, applicants state 

that in-kind purchases and redemptions 

will afford no opportunity for the 

affiliated persons and second tier 

affiliates described above to effect a 

transaction detrimental to the other 

holders of Shares. Applicants also 

believe that in-kind purchases and 

redemptions will not result in abusive 

self-dealing or overreaching by these 

persons of the Fund. 

18. Applicants also submit that the 

sale of Shares to and redemption of 

Shares from an Investing Fund satisfies 

the standards for relief under sections 

17(b) and 6(c) of the Act. Applicants 

note that the consideration paid for the 

purchase or received for the redemption 

of Shares directly from a Fund by an 

Investing Fund (or any other investor) 

will be based on the NAV of the Shares. 

In addition, the securities received or 

transferred by the Fund in connection 

with the purchase or redemption of 

Shares will be valued in the same 

manner as the Fund’s Portfolio 

Securities and thus the transactions will 

not be detrimental to the Investing 

Fund. Applicants also state that the 

proposed transactions will be consistent 

with the policies of each Investing Fund 

and Fund and with the general purposes 

of the Act. Applicants state that the FOF 

Participation Agreement will require an 

Investing Fund to represent that its 

ownership of Shares issued by a Fund 

is consistent with the investment 

policies set forth in the Investing Fund’s 

registration statement. 

Applicants’ Conditions 

The applicants agree that any order of 

the Commission granting the requested 

relief will be subject to the following 

conditions: 

A. Actively-Managed Exchange-Traded 

Fund Relief 

1. Each Prospectus will clearly 

disclose that, for purposes of the Act, 

Shares are issued by a registered 

investment company and that the 

acquisition of Shares by investment 

companies and companies relying on 

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

subject to the restrictions of section 

12(d)(1) of the Act, except as permitted 

by an exemptive order that permits 

registered investment companies to 

invest in a Fund beyond the limits in 

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

and conditions, including that the 

registered investment company enter 

into a FOF Participation Agreement 

with the Fund regarding the terms of the 

investment. 

2. As long as the Funds operate in 

reliance on the requested order, the 

Shares of the Funds will be listed on an 

Exchange. 

3. Neither the Trust nor any Fund will 

be advertised or marketed as an openend investment company or a mutual 

fund. Each Fund’s Prospectus will 

prominently disclose that the Fund is an 

actively managed exchange-traded fund. 

Each Prospectus will prominently 

disclose that the Shares are not 

individually redeemable shares and will 

disclose that the owners of the Shares 

may acquire those Shares from the Fund 

and tender those Shares for redemption 

to the Fund in Creation Units only. Any 

advertising material that describes the 

purchase or sale of Creation Units or 

refers to redeemability will prominently 

disclose that the Shares are not 

individually redeemable and that 

owners of the Shares may acquire those 

Shares from the Fund and tender those 

Shares for redemption to the Fund in 

Creation Units only. 

4. The Web site for the Funds, which 

is and will be publicly accessible at no 

charge, will contain the following 

information, on a per Share basis, for 

each Fund: (a) the prior Business Day’s 

NAV and the Bid/Ask Price, and a 

calculation of the premium or discount 

of the Bid/Ask Price against such NAV; 

and (b) data in chart format displaying 

the frequency distribution of discounts 

and premiums of the daily Bid/Ask 

Price against the NAV, within 

appropriate ranges, for each of the four 

previous calendar quarters (or for the 

life of the Fund, if shorter). 

5. The Prospectus and annual report 

for each Fund will also include: (a) the 

information listed in condition A.4(b), 

(i) in the case of the Prospectus, for the 

most recently completed year (and the 

most recently completed quarter or 

quarters, as applicable) and (ii) in the 

case of the annual report, for the 

immediately preceding five years (or for 

the life of the Fund, if shorter), and (b) 

calculated on a per Share basis for one- 

, five- and ten-year periods (or for the 

life of the Fund, if shorter), the 

cumulative total return and the average 

annual total return based on NAV and 

Bid/Ask Price. 

6. On each Business Day, before 

commencement of trading in Shares on 

the Exchange, the Fund will disclose on 

its Web site the identities and quantities 

of the Portfolio Securities and other 

assets held by the Fund that will form 

the basis for the Fund’s calculation of 

NAV at the end of the Business Day. 

7. The Advisor or Subadvisor, directly 

or indirectly, will not cause any 

Authorized Participant (or any investor 

on whose behalf an Authorized 

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Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57701 

Participant may transact with the Fund) 

to acquire any Deposit Security for the 

Fund through a transaction in which the 

Fund could not engage directly. 

8. The requested order will expire on 

the effective date of any Commission 

rule under the Act that provides relief 

permitting the operation of activelymanaged exchange-traded funds. 

B. Section 12(d)(1) Relief 

1. The members of the Investing 

Fund’s Advisory Group will not control 

(individually or in the aggregate) a Fund 

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

the Act. The members of the Investing 

Fund’s Subadvisory Group will not 

control (individually or in the aggregate) 

a Fund within the meaning of section 

2(a)(9) of the Act. If, as a result of a 

decrease in the outstanding voting 

securities of a Fund, the Investing 

Fund’s Advisory Group or the Investing 

Fund’s Subadvisory Group, each in the 

aggregate, becomes a holder of more 

than 25 percent of the outstanding 

voting securities of a Fund, it will vote 

its Shares of the Fund in the same 

proportion as the vote of all other 

holders of the Fund’s Shares. This 

condition does not apply to the 

Investing Fund’s Subadvisory Group 

with respect to a Fund for which the 

Investing Fund Subadvisor or a person 

controlling, controlled by or under 

common control with the Investing 

Fund Subadvisor acts as the investment 

adviser within the meaning of section 

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

2. No Investing Fund or Investing 

Fund Affiliate will cause any existing or 

potential investment by the Investing 

Fund in a Fund to influence the terms 

of any services or transactions between 

the Investing Fund or an Investing Fund 

Affiliate and the Fund or a Fund 

Affiliate. 

3. The board of directors or trustees of 

an Investing Management Company, 

including a majority of the disinterested 

directors or trustees, will adopt 

procedures reasonably designed to 

assure that the Investing Fund Advisor 

and any Investing Fund Subadvisor are 

conducting the investment program of 

the Investing Management Company 

without taking into account any 

consideration received by the Investing 

Management Company or an Investing 

Fund Affiliate from a Fund or a Fund 

Affiliate in connection with any services 

or transactions. 

4. Once an investment by an Investing 

Fund in the securities of a Fund exceeds 

the limit in section 12(d)(1)(A)(i) of the 

Act, the board of trustees (‘‘Board’’) of 

a Fund, including a majority of the 

disinterested Board members, will 

determine that any consideration paid 

by the Fund to the Investing Fund or an 

Investing 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 Fund; (ii) is 

within the range of consideration that 

the 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 a Fund and its investment 

adviser(s), or any person controlling, 

controlled by or under common control 

with such investment adviser(s). 

5. The Investing Fund Advisor, or 

Trustee or Sponsor, as applicable, will 

waive fees otherwise payable to it by the 

Investing Fund in an amount at least 

equal to any compensation (including 

fees received pursuant to any plan 

adopted by a Fund under rule 12b–l 

under the Act) received from a Fund by 

the Investing Fund Advisor, or Trustee 

or Sponsor, or an affiliated person of the 

Investing Fund Advisor, or Trustee or 

Sponsor, other than any advisory fees 

paid to the Investing Fund Advisor, or 

Trustee or Sponsor, or its affiliated 

person by the Fund, in connection with 

the investment by the Investing Fund in 

the Fund. Any Investing Fund 

Subadvisor will waive fees otherwise 

payable to the Investing Fund 

Subadvisor, directly or indirectly, by the 

Investing Management Company in an 

amount at least equal to any 

compensation received from a Fund by 

the Investing Fund Subadvisor, or an 

affiliated person of the Investing Fund 

Subadvisor, other than any advisory fees 

paid to the Investing Fund Subadvisor 

or its affiliated person by the Fund, in 

connection with the investment by the 

Investing Management Company in the 

Fund made at the direction of the 

Investing Fund Subadvisor. In the event 

that the Investing Fund Subadvisor 

waives fees, the benefit of the waiver 

will be passed through to the Investing 

Management Company. 

6. No Investing Fund or Investing 

Fund Affiliate (except to the extent it is 

acting in its capacity as an investment 

adviser to a Fund) will cause a Fund to 

purchase a security in an Affiliated 

Underwriting. 

7. The Board of the Fund, including 

a majority of the disinterested Board 

members, will adopt procedures 

reasonably designed to monitor any 

purchases of securities by the Fund in 

an Affiliated Underwriting, once an 

investment by an Investing Fund in the 

securities of the 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 Investing Fund in the 

Fund. The Board will consider, among 

other things: (i) Whether the purchases 

were consistent with the investment 

objectives and policies of the 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 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, if 

appropriate, the institution of 

procedures designed to assure that 

purchases of securities in Affiliated 

Underwritings are in the best interest of 

shareholders. 

8. Each 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 an Investing 

Fund in the securities of the 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. 

9. Before investing in a Fund in 

excess of the limits in section 

12(d)(1)(A), an Investing Fund will 

execute a FOF Participation Agreement 

with the Fund stating that their 

respective boards of directors or trustees 

and their investment advisers, or 

Trustee and Sponsor, 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 a 

Fund in excess of the limit in section 

12(d)(1)(A)(i), an Investing Fund will 

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57702 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 

1All entities that currently intend to rely on the 

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. 

notify the Fund of the investment. At 

such time, the Investing Fund will also 

transmit to the Fund a list of the names 

of each Investing Fund Affiliate and 

Underwriting Affiliate. The Investing 

Fund will notify the Fund of any 

changes to the list as soon as reasonably 

practicable after a change occurs. The 

Fund and the Investing Fund will 

maintain and preserve a copy of the 

order, the FOF 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. 

10. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors or trustees of each 

Investing Management Company, 

including a majority of the disinterested 

directors or trustees, will find that the 

advisory fees charged under such 

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 

Fund in which the Investing 

Management Company may invest. 

These findings and their basis will be 

recorded fully in the minute books of 

the appropriate Investing Management 

Company. 

11. Any sales charges and/or service 

fees charged with respect to shares of an 

Investing Fund will not exceed the 

limits applicable to a fund of funds as 

set forth in Rule 2830 of the NASD. 

12. No 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. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23411 Filed 10–2–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28421; 812–13477] 

First Trust Advisors L.P., et al.; Notice 

of Application 

September 29, 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 

(‘‘Act’’) for an exemption from sections 

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

Act and rule 22c–1 under 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. 

APPLICANTS: First Trust Advisors L.P. 

(the ‘‘Advisor’’), First Trust Portfolios 

L.P. (the ‘‘Distributor’’) and First Trust 

Exchange-Traded Fund III (the ‘‘Initial 

Trust’’). 

SUMMARY OF APPLICATION: Applicants 

request an order that permits: (a) Series 

of certain open-end management 

investment companies to issue shares 

(‘‘Shares’’) redeemable in large 

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

secondary market transactions in Shares 

to occur at negotiated market prices; (c) 

certain series to pay redemption 

proceeds, under certain circumstances, 

more than seven days after the tender of 

Shares for redemption; and (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. 

FILING DATES: The application was filed 

on January 14, 2008, and amended on 

July 14, 2008. Applicants have agreed to 

file an amendment during the notice 

period, the substance of which is 

reflected in the 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 

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 October 24, 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: 100 Warrenville Rd., 

Lisle, IL 60532. 

FOR FURTHER INFORMATION CONTACT: 

Bruce R. MacNeil, Senior Counsel, at 

(202) 551–6817, or Marilyn Mann, 

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 Room, 

100 F Street, NE., Washington, DC 

20549–1520 (tel. 202–551–5850). 

Applicants’ Representations 

1. The Initial Trust is an open-end 

management investment company 

registered under the Act and organized 

as a Massachusetts business trust. The 

Initial Trust will offer three initial 

series: the First Trust BRIC Equal 

Weight Fund, the First Trust Target 

Mega Cap Fund, and the First Trust 

Target International Mega Cap Fund (the 

‘‘Initial Funds’’). Each Initial Fund’s 

investment objective will be to provide 

capital appreciation by investing in 

stocks selected according to a 

quantitative screening methodology 

developed by the Advisor. 

2. Applicants request that the order 

apply to any existing or future series 

(‘‘Future Funds’’) of any existing or 

future open-end management 

investment companies (‘‘Future Trusts’’) 

that will invest in equity securities 

traded in the U.S. markets and/or 

foreign equity securities. Any Future 

Fund will be (a) advised by the Advisor 

or an entity controlling, controlled by, 

or under common control with the 

Advisor, and (b) comply with the terms 

and conditions of the order. The Initial 

Funds and Future Funds together are 

the ‘‘Funds’’ and the Initial Trust and 

the Future Trusts together are the 

‘‘Trusts.’’ Funds that invest all or a 

portion of their assets in foreign equity 

securities are each an ‘‘International 

Fund.’’ Each Fund will operate as an 

actively-managed exchange-traded fund 

(‘‘ETF’’). 

3. The Advisor is registered as an 

investment adviser under the 

Investment Advisers Act of 1940 

(‘‘Advisers Act’’) and will serve as the 

investment adviser to the Funds. The 

Advisor may in the future retain one or 

more subadvisers (‘‘Subadvisers’’) to 

manage the Funds’ portfolios. Any 

Subadviser will be registered under the 

Advisers Act. The Distributor, a brokerdealer registered under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’), 

will serve as the principal underwriter 

and distributor for the Funds.1

4. Shares of the Funds will be sold at 

a price of between $20 and $50 per 

Share in Creation Units of between 

25,000 and 150,000 Shares. All orders to 

purchase Creation Units must be placed 

with the Distributor by or through a 

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