Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices 53357 

1Applicants request that the relief apply to each 

existing and future Fund and to each existing and 

future registered open-end management investment 

company or series thereof that is advised by the 

Adviser or any entity controlling, controlled by or 

under common control with the Adviser and which 

is part of the same group of investment companies 

(as defined in section 12(d)(1)(G)(ii)) as the Trust 

(included in the term ‘‘Funds’’). 

2Certain of the Unaffiliated Funds may be 

registered under the Act as either UITs or open-end 

management investment companies and have 

received exemptive relief to permit their shares to 

be listed and traded on a national securities 

exchange at negotiated prices (‘‘ETFs’’). 

6. Within 90 days of the hiring of any 

new Subadviser, shareholders of the 

affected Fund will be furnished all 

information about the new Subadviser 

that would be included in a proxy 

statement. To meet this condition, each 

affected Fund will provide shareholders 

with an information statement meeting 

the requirements of Regulation 14C, 

Schedule 14C and Item 22 of Schedule 

14A under the 1934 Act. 

7. The Adviser will provide general 

management services to each Fund, 

including overall supervisory 

responsibility for the general 

management and investment of each 

Fund’s assets, and, subject to the review 

and approval by the Board, will: (i) Set 

each Fund’s overall investment 

strategies; (ii) evaluate, select and 

recommend Subadvisers to manage all 

or part of each Fund’s assets; (iii) when 

appropriate, allocate and reallocate each 

applicable Fund’s assets among 

multiple Subadvisers; (iv) monitor and 

evaluate the performance of 

Subadvisers; and (v) implement 

procedures reasonably designed to 

ensure that the Subadvisers comply 

with each Fund’s investment objective, 

policies and restrictions. 

8. No Board Member or officer of a 

Mutual Fund, or director or officer of 

the Adviser will own directly or 

indirectly (other than through a pooled 

investment vehicle that is not controlled 

by such person), any interest in a 

Subadviser except for: (i) Ownership of 

interests in the Adviser or any entity 

that controls, is controlled by, or under 

common control with the Adviser; or (ii) 

ownership of less than 1% of the 

outstanding securities of any class of 

equity or debt of a publicly-traded 

company that is either a Subadviser or 

an entity that controls, is controlled by, 

or is under common control with a 

Subadviser. 

9. In the event that the Commission 

adopts a rule under the Act providing 

substantially similar relief to that in the 

order requested in the application, the 

requested order will expire on the 

effective date of that rule. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21625 Filed 8–30–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

29400; File No. 812–13775] 

Aston Funds, et al.; Notice of 

Application 

August 26, 2010. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

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

Investment Company Act of 1940 (the 

‘‘Act’’) for an exemption from sections 

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

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

exemption from sections 17(a)(1) and (2) 

of the Act, and under section 6(c) of the 

Act for an exemption from rule 12d1– 

2(a) under the Act. 

SUMMARY:

Summary of the Application: The 

requested order would (a) permit certain 

registered open-end management 

investment companies that operate as 

‘‘funds of funds’’ to acquire shares of 

certain registered open-end management 

investment companies and unit 

investment trusts (‘‘UITs’’) that are 

within and outside the same group of 

investment companies as the acquiring 

investment companies, and (b) permit 

funds of funds relying on rule 12d1–2 

under the Act to invest in certain 

financial instruments. 

Applicants: Aston Funds (‘‘Trust’’) 

and Aston Asset Management, LP 

(‘‘Adviser’’). 

DATES: 

Filing Dates: The application was 

filed on May 21, 2010, and amended on 

August 11, 2010, and August 16, 2010. 

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 September 20, 2010, 

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: 120 N. LaSalle Street, 

25th Floor, Chicago, Illinois 60602. 

FOR FURTHER INFORMATION CONTACT: Julia 

Kim Gilmer, Branch Chief, at (202) 551– 

16821 (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 via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http:// 

www.sec.gov/search/search.htm, or by 

calling (202) 551–8090. 

Applicants’ Representations 

1. The Trust is an open-end 

management investment company 

registered under the Act and organized 

as a Delaware statutory trust. The Trust 

is comprised of separate series (‘‘Funds’’) 

that pursue distinct investment 

objectives and strategies.1 Certain Funds 

currently pursue their investment 

objectives by investing primarily in 

other investment companies, including 

exchange-traded funds, in reliance on 

Section 12(d)(1)(F) of the Act. The 

Adviser, a Delaware limited 

partnership, is registered as an 

investment adviser under the 

Investment Advisers Act of 1940 

(‘‘Advisers Act’’) and serves as 

investment adviser for each of the 

Funds. 

2. Applicants request an order to 

permit (a) a Fund that operates as a 

‘‘fund of funds’’ (each a ‘‘Fund of 

Funds’’) to acquire shares of (i) 

registered open-end management 

investment companies that are not part 

of the same ‘‘group of investment 

companies,’’ within the meaning of 

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

Fund of Funds (‘‘Unaffiliated Investment 

Companies’’) and UITs that are not part 

of the same group of investment 

companies as the Fund of Funds 

(‘‘Unaffiliated Trusts,’’ together with the 

Unaffiliated Investment Companies, 

‘‘Unaffiliated Funds’’) 2 or (ii) registered 

open-end management companies or 

UITs that are part of the same group of 

investment companies as the Fund of 

Funds (collectively, ‘‘Affiliated Funds,’’ 


srobinson on DSKHWCL6B1PROD with NOTICES
53358 Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices 

3All entities that currently intend to rely on the 

requested order are named as applicants. Any other 

entity that relies on the order in the future will 

comply with the terms and conditions of the 

application. 

4A ‘‘Fund of Funds Affiliate’’ is the Adviser, any 

subadviser, 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. An ‘‘Unaffiliated Fund Affiliate’’ is 

an investment adviser, sponsor, promoter, or 

principal underwriter of an Unaffiliated Fund, as 

well as any person controlling, controlled by, or 

under common control with any of those entities. 

5An Unaffiliated Investment Company, including 

an ETF, would retain its right to reject any initial 

investment by a Fund of Funds in excess of the 

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

together with the Unaffiliated Funds, 

‘‘Underlying Funds’’) and (b) each 

Underlying Fund, any principal 

underwriter for the Underlying Fund, 

and any broker or dealer registered 

under the Securities Exchange Act of 

1934 (‘‘Broker’’) to sell shares of the 

Underlying Fund to the Fund of Funds.3

Applicants also request an order under 

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

exempt applicants from section 17(a) to 

the extent necessary to permit 

Underlying Funds to sell their shares to 

Funds of Funds and redeem their shares 

from Funds of Funds. 

3. Applicants also request an 

exemption under section 6(c) from rule 

12d1–2 under the Act to permit any 

existing or future Fund of Funds that 

relies on section 12(d)(1)(G) of the Act 

(‘‘Same Group Fund of Funds’’) and that 

otherwise complies with rule 12d1–2 to 

also invest, to the extent consistent with 

its investment objective, policies, 

strategies and limitations, in financial 

instruments that may not be securities 

within the meaning of section 2(a)(36) of 

the Act (‘‘Other Investments’’). 

4. Consistent with its fiduciary 

obligations under the Act, the board of 

directors or trustees (‘‘Board’’) of each 

Same Group Fund of Funds will review 

the advisory fees charged by the Same 

Group Fund of Fund’s investment 

adviser to ensure that they are based on 

services provided that are in addition to, 

rather than duplicative of, services 

provided pursuant to the advisory 

agreement of any investment company 

in which the Same Group Fund of 

Funds may invest. 

Applicants’ Legal Analysis 

Investments in Underlying Funds 

A. Section 12(d)(1) 

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

relevant part, 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 investment company’s 

shares to another investment company if 

the sale will cause the acquiring 

company to own more than 3% of the 

acquired company’s total outstanding 

voting stock, or if the sale will cause 

more than 10% of the acquired 

company’s total outstanding 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 to permit 

a Funds of Funds to acquire shares of 

the Underlying Funds in excess of the 

limits in section 12(d)(1)(A), and an 

Underlying Fund, any principal 

underwriter for an Underlying Fund, 

and any Broker to sell shares of an 

Underlying Fund to a Fund of Funds in 

excess of the limits in section 

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

3. Applicants state that the terms and 

conditions of 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 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 believe that neither a 

Fund of Funds nor a Fund of Funds 

Affiliate would be able to exert undue 

influence over the Unaffiliated Funds.4

To limit the control that a Fund of 

Funds may have over an Unaffiliated 

Fund, applicants propose a condition 

prohibiting the Adviser, any person 

controlling, controlled by, or under 

common control with the 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 

that is advised or sponsored by the 

Adviser or any person controlling, 

controlled by, or under common control 

with the Adviser (the ‘‘Advisory Group’’) 

from controlling (individually or in the 

aggregate) an Unaffiliated Fund within 

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

The same prohibition would apply to 

any other investment adviser within the 

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

to a Fund of Funds (‘‘Subadviser’’), any 

person controlling, controlled by or 

under common control with the 

Subadviser, and any investment 

company or issuer that would be an 

investment company but for section 

3(c)(1) or 3(c)(7) of the Act (or portion 

of such investment company or issuer) 

advised or sponsored by the Subadviser 

or any person controlling, controlled by 

or under common control with the 

Subadviser (the ‘‘Subadvisory Group’’). 

Applicants propose other conditions to 

limit the potential for undue influence 

over the Unaffiliated Funds, including 

that 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 

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, investment adviser, 

Subadviser, or employee of the Fund of 

Funds, or a person of which any such 

officer, director, member of an advisory 

board, investment adviser, Subadviser, 

or employee is an affiliated person. An 

Underwriting Affiliate does not include 

any person whose relationship to an 

Unaffiliated Fund is covered by section 

10(f) of the Act. 

5. To further assure that an 

Unaffiliated Investment Company 

understands the implications of an 

investment by a Fund of Funds under 

the requested order, prior to a Fund of 

Funds’ investment in the 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 an 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 

(‘‘Participation Agreement’’). Applicants 

note that an Unaffiliated Investment 

Company (other than an ETF whose 

shares are purchased by a Fund of 

Funds in the secondary market) will 

retain its right at all times to reject any 

investment by a Fund of Funds.5


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices 53359 

declining to execute the Participation Agreement 

with the Fund of Funds. 6Any references to NASD Conduct Rule 2830 

include any successor or replacement FINRA rule 

to NASD Conduct Rule 2830. 

7Applicants 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 a 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 may be prohibited by 

section 17(e)(1) of the Act. The Participation 

Agreement also will include this acknowledgment. 

8Applicants 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 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) of 

the Act for those in-kind transactions. 

6. Applicants state that they do not 

believe that the proposed arrangement 

will involve excessive layering of fees. 

The Board of each Fund of Funds, 

including a majority of the trustees who 

are not ‘‘interested persons’’ (within the 

meaning of section 2(a)(19) of the Act) 

(‘‘Independent Trustees’’), will find that 

the advisory fees charged under 

investment advisory or management 

contract(s) are based on services 

provided that will be in addition to, 

rather than duplicative of, the services 

provided under such advisory 

contract(s) of any Underlying Fund in 

which the Fund of Funds may invest. In 

addition, the Adviser will waive fees 

otherwise payable to it by the 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 under 

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 an 

Unaffiliated Investment Company, in 

connection with the investment by the 

Fund of Funds in the Unaffiliated Fund. 

Any sales charges and/or service fees 

charged with respect to shares of the 

Fund of Funds will not exceed the 

limits applicable to a fund of funds as 

set forth in Rule 2830 of the Conduct 

Rules of the NASD (‘‘NASD Conduct 

Rule 2830’’).6

7. Applicants submit that the 

proposed arrangement will not create an 

overly complex fund structure. 

Applicants note that no Underlying 

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, except 

in certain circumstances identified in 

condition 11 below. 

B. Section 17(a) 

1. Section 17(a) of the Act generally 

prohibits sales or purchases of securities 

between a registered investment 

company and any affiliated person of 

the company. 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 a Fund of 

Funds and the Affiliated Funds might 

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 

Unaffiliated Funds might be deemed to 

be affiliated persons of one another if 

the Fund of Funds acquires 5% or more 

of an Unaffiliated Fund’s outstanding 

voting securities. In light of these and 

other possible affiliations, section 17(a) 

could prevent an Underlying Fund from 

selling shares to and redeeming shares 

from a Fund of Funds. 

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 involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

Section 6(c) of the Act permits the 

Commission to exempt any persons 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 

standards for relief under sections 17(b) 

and 6(c) of the Act.7 Applicants state 

that the terms of the transactions are 

reasonable and fair 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 the 

Underlying Fund.8 Applicants state that 

the proposed transactions will be 

consistent with the policies of each 

Fund of Funds and each Underlying 

Fund and with the general purposes of 

the Act. 

Other Investments by Same Group 

Funds of Funds 

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

provides that section 12(d)(1) will not 

apply to securities of an acquired 

company purchased by an acquiring 

company if: (i) The acquiring company 

and acquired company are part of the 

same group of investment companies; 

(ii) the acquiring company holds only 

securities of acquired companies that 

are part of the same group of investment 

companies, government securities, and 

short-term paper; (iii) the aggregate sales 

loads and distribution-related fees of the 

acquiring company and the acquired 

company are not excessive under rules 

adopted pursuant to section 22(b) or 

section 22(c) of the Act by a securities 

association registered under section 15A 

of the Exchange Act or by the 

Commission; and (iv) the acquired 

company has a policy that prohibits it 

from acquiring securities of registered 

open-end management investment 

companies or registered unit investment 

trusts in reliance on section 12(d)(1)(F) 

or (G) of the Act. 

2. Rule 12d1–2 under the Act permits 

a registered open-end investment 

company or a registered unit investment 

trust that relies on section 12(d)(1)(G) of 

the Act to acquire, in addition to 

securities issued by another registered 

investment company in the same group 

of investment companies, government 

securities, and short-term paper: (1) 

Securities issued by an investment 

company that is not in the same group 

of investment companies, when the 

acquisition is in reliance on section 

12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) 

securities (other than securities issued 

by an investment company); and (3) 

securities issued by a money market 

fund, when the investment is in reliance 

on rule 12d1–1 under the Act. For the 

purposes of rule 12d1–2, ‘‘securities’’ 

means any security as defined in section 

2(a)(36) of the Act. 

3. Applicants state that the proposed 

arrangement would comply with the 

provisions of rule 12d1–2 under the Act, 

but for the fact that a Same Group Fund 

of Funds may invest a portion of its 

assets in Other Investments. Applicants 

request an order under section 6(c) of 

the Act for an exemption from rule 


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53360 Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices 

12d1–2(a) to allow the Same Group 

Funds of Funds to invest in Other 

Investments. Applicants assert that 

permitting Same Group Funds of Funds 

to invest in Other Investments as 

described in the application would not 

raise any of the concerns that the 

requirements of section 12(d)(1) were 

designed to address. 

Applicants’ Conditions 

Investments by Funds of Funds in 

Underlying Funds 

Applicants agree that the relief to 

permit Funds of Funds to invest in 

Underlying Funds shall be subject to the 

following conditions: 

1. The members of an Advisory 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 Subadvisory 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 

outstanding voting securities of an 

Unaffiliated Fund, the Advisory Group 

or a Subadvisory Group, each in the 

aggregate, becomes a holder of more 

than 25 percent of the outstanding 

voting securities of the Unaffiliated 

Fund, then the Advisory Group or the 

Subadvisory Group 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 Subadvisory Group with respect to an 

Unaffiliated Fund for which the 

Subadviser or a person controlling, 

controlled by, or under common control 

with the Subadviser 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). 

2. No Fund of Funds or Fund of 

Funds Affiliate will cause any existing 

or potential investment by the Fund of 

Funds in shares of 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 its 

Adviser and any Subadviser(s) 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 purchases 

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 the 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 shall 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 shall maintain and 

preserve for a period 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 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 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 168 / Tuesday, August 31, 2010 / Notices 53361 

Investment Company of any changes to 

the list of the names as soon as 

reasonably practicable 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 such 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 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 under 

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 an 

Unaffiliated Investment Company, in 

connection with the investment by the 

Fund of Funds in the Unaffiliated Fund. 

Any Subadviser will waive fees 

otherwise payable to the Subadviser, 

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 

Subadviser, from an Unaffiliated Fund, 

other than any advisory fees paid to the 

Subadviser or its affiliated person by an 

Unaffiliated Investment Company, in 

connection with the investment by the 

Fund of Funds in the Unaffiliated Fund 

made at the direction of the Subadviser. 

In the event that the Subadviser waives 

fees, the benefit of the waiver will be 

passed through to the Fund of Funds. 

11. 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 

investment companies for short-term 

cash management purposes, or (ii) 

engage in interfund borrowing and 

lending transactions. 

12. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to fund of funds set 

forth in NASD Conduct Rule 2830. 

Other Investments by Same Group 

Funds of Funds 

Applicants agree that the relief to 

permit Same Group Funds of Funds to 

invest in Other Investments shall be 

subject to the following condition: 

13. Applicants will comply with all 

provisions of rule 12d1–2 under the Act, 

except for paragraph (a)(2) to the extent 

that it restricts any Same Group Fund of 

Funds from investing in Other 

Investments as described in the 

application. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21674 Filed 8–30–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, September 2, 2010 at 2 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Walter, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in a closed session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

September 2, 2010 will be: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: August 26, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–21798 Filed 8–27–10; 11:15 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: [to be announced]. 

STATUS: Closed Meeting. 

PLACE: 100 F Street, NE., Washington, 

DC. 

DATE AND TIME OF PREVIOUSLY ANNOUNCED

MEETING: September 2, 2010 at 2 p.m. 

CHANGE IN THE MEETING: Additional Item. 

The following matter will also be 

considered during the 2 p.m. Closed 

Meeting scheduled for Thursday, 

September 2, 2010 at 2 p.m.: 

Consideration of Amicus Participation 

Commissioner Walter, as duty officer, 

voted to consider the item listed for the 

Closed Meeting in closed session, and 

determined that no earlier notice thereof 

was possible. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. For further 

information and to ascertain what, if 

any, matters have been added, deleted 

or postponed, please contact the Office 

of the Secretary at (202) 551–5400. 

Dated: August 27, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–21857 Filed 8–27–10; 4:15 pm] 

BILLING CODE 8010–01–P 


srobinson on DSKHWCL6B1PROD with NOTICES