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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Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57703 

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, per 

outstanding Share of each Fund, will be made 

available. The Stock Exchange or a major market 

data vendor intends to disseminate widely, every 15 

seconds, during regular trading hours, an 

approximate amount per Share representing the 

sum of the estimated Cash Component effective 

through and including the previous Business Day, 

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, and part or all of the spread 

between the expected bid and the offer side of the 

market relating to such Deposit Securities. 

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. 

party that has entered into an agreement 

with a Fund and the Distributor 

(‘‘Authorized Participant’’). An 

Authorized Participant must be either: 

(a) A broker-dealer or other participant 

in the continuous net settlement system 

of the National Securities Clearing 

Corporation (‘‘NSCC’’), a clearing 

agency registered with the Commission, 

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 inkind deposit by the purchaser of a 

portfolio of securities designated by the 

Advisor (the ‘‘Deposit Securities’’), 

together with the deposit of a relatively 

small 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. Each 

Fund 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 requisite 

Deposit Securities. 

5. 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’’) or statement of 

additional information (‘‘SAI’’) of such 

Fund. 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 respective Fund’s transfer agent. 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 a Fund to implement the 

delivery of Shares. 

6. 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 on a 

national securities exchange as defined 

in section 2(a)(26) of the Act (‘‘Stock 

Exchange’’). It is expected that one or 

more member firms of a listing Stock 

Exchange will be designated to act as a 

specialist and maintain a market for 

Shares on the Stock Exchange (the 

‘‘Specialist’’), or if Nasdaq is the listing 

Stock 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 a Stock 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. 

7. Applicants expect that purchasers 

of Creation Units will include 

institutional investors and arbitrageurs 

(which could include institutional 

investors). 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. 

8. 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 

Payment,’’ consisting of an amount 

calculated in the same manner as the 

Cash Component, although the actual 

amount of the Cash Redemption 

Payment may differ from the Cash 

Component if the Fund Securities are 

not identical to the Deposit Securities 

on that day. 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 may pay a Transaction Fee, 

calculated in the same manner as a 

Transaction Fee payable in connection 

with purchases of Creation Units. 

9. Neither a 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 investor 

educational materials issued or 

circulated in connection with the 

Shares. The Funds will provide copies 

of their annual and semi-annual 

shareholder reports to DTC Participants 

for distribution to beneficial owners of 

Shares. 

10. The Funds’ Web site, which will 

be publicly available prior to the public 

offering of Shares, will include the 

Prospectus and other 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 Stock Exchange, each Fund will 

disclose the identities and quantities of 

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57704 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. 

7Rule 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. 

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), 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 

granting an exemption from sections 

17(a)(1) and (a)(2) 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. 

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, which 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 22(e) of the Act 

7. Section 22(e) generally prohibits a 

registered investment company from 

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. The principal reason for 

the requested exemption is that 

settlement of redemptions for the 

International Funds is contingent not 

only on the settlement cycle of the 

United States markets, but also on 

currently practicable delivery cycles in 

local markets for underlying foreign 

securities held by the International 

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 International 

Funds. Applicants request relief under 

section 6(c) of the Act from section 22(e) 

in such circumstances to allow the 

International Funds to pay redemption 

proceeds up to 12 calendar days after 

the tender of any Creation Unit for 

redemption. At all other times and 

except as disclosed in the relevant SAI, 

applicants expect that each 

International Fund will be able to 

deliver redemption proceeds within 

seven days.7 With respect to Future 

Funds that are International Funds, 

applicants seek the same relief from 

section 22(e) only to the extent that 

circumstances similar to those described 

in the application exist. 

8. 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 

International Fund will disclose those 

local holidays (over the period of at 

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Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57705 

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 International 

Fund. 

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

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

generally prohibit 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 

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’’). 

10. 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 outstanding Shares of the 

respective 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. 

11. Applicants contend that no useful 

purpose would be served by prohibiting 

these 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. 

Applicants’ Conditions 

The applicants agree that any order of 

the Commission granting the requested 

relief will be subject to the following 

conditions: 

1. Each Prospectus will clearly 

disclose that, for purposes of the Act, 

Shares are issued by the Fund, which is 

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 an 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 a 

Stock Exchange. 

3. Neither the Trusts nor any Fund 

will be advertised or marketed as an 

open-end 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 the 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 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 Stock 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 

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 actively 

managed exchange-traded funds. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23366 Filed 10–2–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58678; File No. SR–Amex– 

2008–64] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Order 

Approving the Adoption of New Rule 

478T To Set Forth the Temporary 

Procedures That Will Apply To 

Disciplinary Proceedings Pending as 

of the Closing Date of the Acquisition 

of Amex by NYSE Euronext 

September 29, 2008. 

On July 28, 2008, American Stock 

Exchange LLC, a Delaware limited 

mstockstill on PROD1PC66 with NOTICES