Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 63179 

1The only registered closed-end investment 

company that currently intends to rely on the order 

has been named as an applicant. Applicants request 

that the order also apply to each other registered 

closed-end investment company advised or to be 

advised in the future by ALPS or by an entity 

controlling, controlled by, or under common 

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

Act) with ALPS (including any successor in 

interest) (each such entity, including ALPS, the 

‘‘Adviser’’) that in the future seeks to rely on the 

order (such investment companies, together with 

PGZ, are collectively, the ‘‘Funds’’ and 

individually, a ‘‘Fund’’). Any Fund that relies on 

the order in the future will comply with the terms 

and conditions of the application. A successor in 

interest is limited to entities that result from a 

reorganization into another jurisdiction or a change 

in the type of business organization. 

2Any investment adviser to a Fund will be 

registered under the Advisers Act. 

By the Commission. 

Shoshana M. Grove, 

Secretary. 

[FR Doc. 2014–25014 Filed 10–21–14; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31290; File No. 812–14295] 

Principal Real Estate Income Fund and 

ALPS Advisors, Inc.; Notice of 

Application 

October 16, 2014. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application under 

section 6(c) of the Investment Company 

Act of 1940 (‘‘Act’’) for an exemption 

from section 19(b) of the Act and rule 

19b–1 under the Act. 

APPLICANTS: Principal Real Estate 

Income Fund (‘‘PGZ’’) and Alps 

Advisors, Inc. (‘‘ALPS’’). 

SUMMARY: Summary of Application: 

Applicants request an order to permit 

certain registered closed-end investment 

companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common shares as frequently as twelve 

times in any one taxable year, and as 

frequently as distributions are specified 

by or in accordance with the terms of 

any outstanding preferred shares that 

the investment companies may issue. 

DATES: Filing Dates: The application was 

filed on April 2, 2014, and amended on 

August 14, 2014. 

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 November 10, 2014 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: ALPS Fund Services, Inc., 

1290 Broadway, Suite 1100, Denver, CO 

80203. 

FOR FURTHER INFORMATION CONTACT: 

Courtney S. Thornton, Senior Counsel, 

at (202) 551–6812, or David P. Bartels, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

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. PGZ is registered as a closed-end 

management investment company 

organized as a Delaware statutory trust.1

The common shares of PGZ are listed 

and traded on the New York Stock 

Exchange. The investment objective of 

PGZ is high current income, with a 

secondary objective of capital 

appreciation. Applicants represent that, 

under normal market conditions, PGZ 

invests at least 80% of its total assets in 

commercial real estate securities, 

primarily consisting of commercial 

mortgage backed securities and other 

U.S. and non-U.S. real estate-related 

securities (primarily real estate 

investment trusts (‘‘REITs’’)). Although 

PGZ does not currently intend to issue 

preferred shares, applicants state that 

the board of trustees (‘‘Board’’) of PGZ 

may authorize the issuance of preferred 

shares in the future. 

2. The Adviser, a corporation 

organized under the laws of the State of 

Colorado, is registered as an investment 

adviser under the Investment Advisers 

Act of 1940 (the ‘‘Advisers Act’’).2

Principal Real Estate Investors, LLC, a 

limited liability company organized 

under the laws of the State of Delaware, 

is registered as an investment adviser 

under the Advisers Act and is the subadviser to PGZ. Any sub-adviser to a 

Fund will be registered as an investment 

adviser under the Advisers Act or not 

subject to registration. 

3. Applicants state that prior to the 

Fund’s implementing a distribution 

policy (‘‘Distribution Policy’’) in 

reliance on the order, the Board, 

including a majority of the trustees who 

are not ‘‘interested persons’’ of the 

Fund, as defined in section 2(a)(19) of 

the Act (the ‘‘Independent Trustees’’), 

will request, and the Adviser will 

provide, the information as is 

reasonably necessary to make an 

informed determination of whether the 

Board should adopt a proposed 

Distribution Policy. In particular, the 

Board and the Independent Trustees 

will review information regarding the 

purpose and terms of the Distribution 

Policy; the likely effects of the policy on 

the Fund’s long-term total return (in 

relation to market price and its net asset 

value per common share (‘‘NAV’’)); the 

expected relationship between the 

Fund’s distribution rate on its common 

shares under the policy and the Fund’s 

total return (in relation to NAV); 

whether the rate of distribution would 

exceed the Fund’s expected total return 

in relation to its NAV; and any 

reasonably foreseeable material effects 

of the policy on the Fund’s long-term 

total return (in relation to market price 

and NAV). The Independent Trustees 

also will consider what conflicts of 

interest the Adviser and the affiliated 

persons of the Adviser and the Fund 

might have with respect to the adoption 

or implementation of the Distribution 

Policy. Applicants state that only after 

considering the information will the 

Board, including the Independent 

Trustees, approve a Distribution Policy 

and, in connection with the approval, 

will determine that the Distribution 

Policy is consistent with the Fund’s 

investment objectives and in the best 

interests of the Fund’s common 

shareholders. 

1. Applicants state that the purpose of 

a Distribution Policy, generally, would 

be to permit a Fund to distribute over 

the course of each year, through 

periodic distributions in relatively equal 

amounts (plus any required special 

distributions) that are composed of 

payments received from portfolio 

holdings, supplemental amounts 

generally representing capital gains or, 

possibly, returns of capital that may 

represent unrealized capital gains. The 

Fund seeks to establish a distribution 

rate that approximates the Fund’s 

projected total return that can 

reasonably be expected to be generated 

by the Fund over an extended period of 

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63180 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 

time, although the distribution rate will 

not be solely dependent on the amount 

of income earned or capital gains 

realized by the Fund. Under the 

Distribution Policy, the Fund would 

distribute periodically (as frequently as 

12 times in any taxable year) to its 

respective common shareholders a fixed 

percentage of the market price of the 

Fund’s common shares at a particular 

point in time or a fixed percentage of 

NAV at a particular time or a fixed 

amount per share of common shares, 

any of which may be adjusted from time 

to time. It is anticipated that under a 

Distribution Policy, the minimum 

annual distribution rate with respect to 

the Fund’s common shares would be 

independent of the Fund’s performance 

during any particular period but would 

be expected to correlate with the Fund’s 

performance over time. Except for 

extraordinary distributions and 

potential increases or decreases in the 

amount of the distributions in the final 

dividend period in light of a Fund’s 

projected performance for the entire 

calendar year and to enable the Fund to 

comply with the distribution 

requirements of Subchapter M of the 

Internal Revenue Code (‘‘Code’’) for the 

calendar year, each distribution on the 

Fund’s common shares would be at the 

stated rate then in effect. 

2. Applicants state that prior to the 

implementation of a Distribution Policy 

for the Fund, the Board will have 

adopted policies and procedures under 

rule 38a–1 under the Act that: (i) Are 

reasonably designed to ensure that all 

notices required to be sent to the Fund’s 

shareholders pursuant to section 19(a) 

of the Act, rule 19a–1 thereunder and 

condition 4 below (each a ‘‘19(a) 

Notice’’) include the disclosure required 

by rule 19a–1 under the Act and by 

condition 2(a) below, and that all other 

written communications by the Fund or 

its agents regarding distributions under 

the Distribution Policy include the 

disclosure required by condition 3(a) 

below; and (ii) require the Fund to keep 

records that demonstrate its compliance 

with all of the conditions of the order 

and are necessary for the Fund to form 

the basis for, or demonstrate the 

calculation of, the amounts disclosed in 

its 19(a) Notices. 

Applicants’ Legal Analysis 

1. Section 19(b) of the Act generally 

makes it unlawful for any registered 

investment company to make long-term 

capital gains distributions more than 

once every twelve months. Rule 19b–1 

limits the number of capital gains 

dividends, as defined in section 

852(b)(3)(C) of the Code 

(‘‘distributions’’), that a fund may make 

with respect to any one taxable year to 

one, plus a supplemental distribution 

made pursuant to section 855 of the 

Code not exceeding 10% of the total 

amount distributed for the year, plus 

one additional capital gain dividend 

made in whole or in part to avoid the 

excise tax under section 4982 of the 

Code. 

2. Section 6(c) of the Act provides, in 

relevant part, that the Commission may 

exempt any person or transaction from 

any provision of the Act to the extent 

that the exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. 

3. Applicants state that one of the 

concerns leading to the enactment of 

section 19(b) and adoption of rule 19b– 

1 was that shareholders might be unable 

to distinguish between frequent 

distributions of capital gains and 

dividends from investment income. 

Applicants state, however, that rule 

19a–1 effectively addresses this concern 

by requiring that distributions (or the 

confirmation of the reinvestment 

thereof) estimated to be sourced in part 

from capital gains or capital be 

accompanied by a separate statement 

showing the sources of the distribution 

(e.g., estimated net income, net shortterm capital gains, net long-term capital 

gains and/or return of capital). 

Applicants state that similar 

information is included in the Fund’s 

annual report to shareholders and on 

the Internal Revenue Service Form 1099 

DIV, which is sent to each common and 

preferred shareholder who received 

distributions during a particular year. 

4. Applicants further state that the 

Fund will make the additional 

disclosures required by the conditions 

set forth below and will adopt 

compliance policies and procedures in 

accordance with rule 38a–1 under the 

Act to ensure that all required 19(a) 

Notices and disclosures are sent to 

shareholders. Applicants state that the 

information required by section 19(a), 

rule 19a–1, the Distribution Policy, the 

policies and procedures under rule 38a– 

1 noted above, and the conditions listed 

below will help ensure that the Fund’s 

shareholders are provided sufficient 

information to understand that their 

periodic distributions are not tied to a 

Fund’s net investment income (which 

for this purpose is the Fund’s taxable 

income other than from capital gains) 

and realized capital gains to date, and 

may not represent yield or investment 

return. Accordingly, applicants assert 

that continuing to subject the Fund to 

section 19(b) and rule 19b–1 would 

afford shareholders no extra protection. 

5. Applicants note that section 19(b) 

and rule 19b–1 also were intended to 

prevent certain improper sales practices, 

including, in particular, the practice of 

urging an investor to purchase shares of 

a fund on the basis of an upcoming 

capital gains dividend (‘‘selling the 

dividend’’), where the dividend would 

result in an immediate corresponding 

reduction in NAV and would be in 

effect a taxable return of the investor’s 

capital. Applicants submit that the 

‘‘selling the dividend’’ concern should 

not apply to closed-end investment 

companies, such as the Fund. According 

to applicants, if the underlying concern 

extends to secondary market purchases 

of shares of closed-end funds that are 

subject to a large upcoming capital gains 

dividend, adoption of a periodic 

distribution plan actually helps 

minimize the concern by avoiding, 

through periodic distributions, any 

buildup of large end-of-the-year 

distributions. 

6. Applicants also note that common 

shares of closed-end funds often trade in 

the marketplace at a discount to their 

NAV. Applicants believe that this 

discount may be reduced if the Funds 

are permitted to pay relatively frequent 

dividends on their common shares at a 

consistent rate, whether or not those 

dividends contain an element of longterm capital gains. 

7. Applicants assert that the 

application of rule 19b–1 to a 

Distribution Policy actually could have 

an inappropriate influence on portfolio 

management decisions. Applicants state 

that, in the absence of an exemption 

from rule 19b–1, the adoption of a 

periodic distribution plan imposes 

pressure on management (i) not to 

realize any net long-term capital gains 

until the point in the year that the fund 

can pay all of its remaining distributions 

in accordance with rule 19b–1, and (ii) 

not to realize any long-term capital 

gains during any particular year in 

excess of the amount of the aggregate 

pay-out for the year (since as a practical 

matter excess gains must be distributed 

and accordingly would not be available 

to satisfy pay-out requirements in 

following years), notwithstanding that 

purely investment considerations might 

favor realization of long-term gains at 

different times or in different amounts. 

Applicants assert that by limiting the 

number of long-term capital gain 

dividends that the Fund may make with 

respect to any one year, rule 19b–1 may 

prevent the normal and efficient 

operation of a periodic distribution plan 

whenever the Fund’s realized net longterm capital gains in any year exceed 

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Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 63181 

3Returns of capital as used in the application 

means return of capital for financial accounting 

purposes and not for tax accounting purposes. 

4The disclosure in condition 2(a)(ii)(2) will be 

included only if the current distribution or the 

fiscal year-to-date cumulative distributions are 

estimated to include a return of capital. 

the total of the periodic distributions 

that may include the capital gains under 

the rule. 

8. Applicants also assert that rule 

19b–1 may force fixed regular periodic 

distributions under a periodic 

distribution plan to be funded with 

returns of capital 3 (to the extent net 

investment income and realized shortterm capital gains are insufficient to 

fund the distribution), even though 

realized net long-term capital gains 

otherwise would be available. To 

distribute all of a Fund’s long-term 

capital gains within the limits in rule 

19b–1, a Fund may be required to make 

total distributions in excess of the 

annual amount called for by its periodic 

distribution plan, or to retain and pay 

taxes on the excess amount. Applicants 

assert that the requested order would 

minimize these anomalous effects of 

rule 19b–1 by enabling the Fund to 

realize long-term capital gains as often 

as investment considerations dictate 

without fear of violating rule 19b–1. 

9. Applicants state that Revenue 

Ruling 89–81 under the Code requires 

that a fund that seeks to qualify as a 

regulated investment company under 

the Code and that has both common 

shares and preferred shares outstanding 

designate the types of income, e.g., 

investment income and capital gains, in 

the same proportion as the total 

distributions distributed to each class 

for the tax year. To satisfy the 

proportionate designation requirements 

of Revenue Ruling 89–81, whenever a 

fund has realized a long-term capital 

gain with respect to a given tax year, the 

fund must designate the required 

proportionate share of the capital gain to 

be included in common and preferred 

share dividends. Applicants state that 

although rule 19b–1 allows a fund some 

flexibility with respect to the frequency 

of capital gains distributions, a fund 

might use all of the exceptions available 

under the rule for a tax year and still 

need to distribute additional capital 

gains allocated to the preferred shares to 

comply with Revenue Ruling 89–81. 

10. Applicants assert that the 

potential abuses addressed by section 

19(b) and rule 19b–1 do not arise with 

respect to preferred shares issued by a 

closed-end fund. Applicants assert that 

the distributions are either fixed or 

determined in periodic auctions by 

reference to short-term interest rates 

rather than by reference to performance 

of the issuer, and Revenue Ruling 89– 

81 determines the proportion of the 

distributions that are comprised of longterm capital gains. 

11. Applicants also submit that the 

‘‘selling the dividend’’ concern is not 

applicable to preferred shares, which 

entitle a holder to no more than a 

specified periodic dividend at a fixed 

rate or the rate determined by the 

market, and, like a debt security, are 

priced based upon their liquidation 

preference, dividend rate, credit quality, 

and frequency of payment. Applicants 

state that investors buy preferred shares 

for the purpose of receiving payments at 

the frequency bargained for, and any 

application of rule 19b–1 to preferred 

shares would be contrary to the 

expectation of investors. 

12. Applicants request an order under 

section 6(c) of the Act granting an 

exemption from the provisions of 

section 19(b) of the Act and rule 19b– 

1 thereunder to permit the Fund to 

distribute periodic capital gain 

dividends (as defined in section 

852(b)(3)(C) of the Code) as frequently 

as twelve times in any one taxable year 

in respect of its common shares and as 

often as specified by, or determined in 

accordance with the terms of, any 

preferred shares issued by the Fund. 

Applicants’ Conditions 

Applicants agree that, with respect to 

each Fund seeking to rely on the order, 

the order will be subject to the following 

conditions: 

1. Compliance Review and Reporting 

The Fund’s chief compliance officer 

will: (a) Report to the Fund’s Board, no 

less frequently than once every three 

months or at the next regularly 

scheduled quarterly Board meeting, 

whether (i) the Fund and the Adviser 

have complied with the conditions of 

the order, and (ii) a material compliance 

matter (as defined in rule 38a–1(e)(2) 

under the Act) has occurred with 

respect to the conditions; and (b) review 

the adequacy of the policies and 

procedures adopted by the Board no less 

frequently than annually. 

2. Disclosures to Fund Shareholders 

(a) Each 19(a) Notice disseminated to 

the holders of the Fund’s common 

shares, in addition to the information 

required by section 19(a) and rule 19a– 

1: 

(i) Will provide, in a tabular or 

graphical format: 

(1) The amount of the distribution, on 

a per common share basis, together with 

the amounts of the distribution amount, 

on a per common share basis and as a 

percentage of the distribution amount, 

from estimated: (A) Net investment 

income; (B) net realized short-term 

capital gains; (C) net realized long-term 

capital gains; and (D) return of capital 

or other capital source; 

(2) the fiscal year-to-date cumulative 

amount of distributions, on a per 

common share basis, together with the 

amounts of the cumulative amount, on 

a per common share basis and as a 

percentage of the cumulative amount of 

distributions, from estimated: (A) Net 

investment income; (B) net realized 

short-term capital gains; (C) net realized 

long-term capital gains; and (D) return 

of capital or other capital source; 

(3) the average annual total return in 

relation to the change in NAV for the 

5-year period (or, if the Fund’s history 

of operations is less than five years, the 

time period commencing immediately 

following the Fund’s first public 

offering) ending on the last day of the 

month ended immediately prior to the 

most recent distribution record date 

compared to the current fiscal period’s 

annualized distribution rate expressed 

as a percentage of NAV as of the last day 

of the month prior to the most recent 

distribution record date; and 

(4) the cumulative total return in 

relation to the change in NAV from the 

last completed fiscal year to the last day 

of the month prior to the most recent 

distribution record date compared to the 

fiscal year-to-date cumulative 

distribution rate expressed as a 

percentage of NAV as of the last day of 

the month prior to the most recent 

distribution record date. 

Such disclosure shall be made in a 

type size at least as large and as 

prominent as the estimate of the sources 

of the current distribution; and 

(ii) will include the following 

disclosure: 

(1) ‘‘You should not draw any 

conclusions about the Fund’s 

investment performance from the 

amount of this distribution or from the 

terms of the Applicants’ Distribution 

Policy’’; 

(2) ‘‘The Fund estimates that it has 

distributed more than its income and 

net realized capital gains; therefore, a 

portion of your distribution may be a 

return of capital. A return of capital may 

occur, for example, when some or all of 

the money that you invested in the 

Fund is paid back to you. A return of 

capital distribution does not necessarily 

reflect the Fund’s investment 

performance and should not be 

confused with ‘yield’ or ‘income’ 4’’; and 

(3) ‘‘The amounts and sources of 

distributions reported in this 19(a) 

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63182 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 

Notice are only estimates and are not 

being provided for tax reporting 

purposes. The actual amounts and 

sources of the amounts for tax reporting 

purposes will depend upon the Fund’s 

investment experience during the 

remainder of its fiscal year and may be 

subject to changes based on tax 

regulations. The Fund will send you a 

Form 1099–DIV for the calendar year 

that will tell you how to report these 

distributions for federal income tax 

purposes.’’ 

The disclosure shall be made in a type 

size at least as large as and as prominent 

as any other information in the 19(a) 

Notice and placed on the same page in 

close proximity to the amount and the 

sources of the distribution. 

(b) On the inside front cover of each 

report to shareholders under rule 30e– 

1 under the Act, the Fund will: 

(i) Describe the terms of the 

Distribution Policy (including the fixed 

amount or fixed percentage of the 

distributions and the frequency of the 

distributions); 

(ii) include the disclosure required by 

condition 2(a)(ii)(1) above; 

(iii) state, if applicable, that the 

Distribution Policy provides that the 

Board may amend or terminate the 

Distribution Policy at any time without 

prior notice to Fund shareholders; and 

(iv) describe any reasonably 

foreseeable circumstances that might 

cause the Fund to terminate the 

Distribution Policy and any reasonably 

foreseeable consequences of the 

termination. 

(c) Each report provided to 

shareholders of the Fund under rule 

30e-1 under the Act and each 

prospectus filed with the Commission 

on Form N–2 under the Act, will 

provide the Fund’s total return in 

relation to changes in NAV in the 

financial highlights table and in any 

discussion about the Fund’s total return. 

3. Disclosure to Shareholders, 

Prospective Shareholders and Third 

Parties 

(a) The Fund will include the 

information contained in the relevant 

19(a) Notice, including the disclosure 

required by condition 2(a)(ii) above, in 

any written communication (other than 

a communication on Form 1099) about 

the Distribution Policy or distributions 

under the Distribution Policy by the 

Fund, or agents that the Fund has 

authorized to make the communication 

on the Fund’s behalf, to any Fund 

shareholder, prospective shareholder or 

third-party information provider; 

(b) The Fund will issue, 

contemporaneously with the issuance of 

any 19(a) Notice, a press release 

containing the information in the 19(a) 

Notice and will file with the 

Commission the information contained 

in the 19(a) Notice, including the 

disclosure required by condition 2(a)(ii) 

above, as an exhibit to its next filed 

Form N–CSR; and 

(c) The Fund will post prominently a 

statement on its (or the Adviser’s) Web 

site containing the information in each 

19(a) Notice, including the disclosure 

required by condition 2(a)(ii) above, and 

will maintain the information on the 

Web site for at least 24 months. 

4. Delivery of 19(a) Notices to Beneficial 

Owners 

If a broker, dealer, bank or other 

person (‘‘financial intermediary’’) holds 

common shares issued by the Fund in 

nominee name, or otherwise, on behalf 

of a beneficial owner, the Fund: (a) Will 

request that the financial intermediary, 

or its agent, forward the 19(a) Notice to 

all beneficial owners of the Fund’s 

shares held through the financial 

intermediary; (b) will provide, in a 

timely manner, to the financial 

intermediary, or its agent, enough 

copies of the 19(a) Notice assembled in 

the form and at the place that the 

financial intermediary, or its agent, 

reasonably requests to facilitate the 

financial intermediary’s sending of the 

19(a) Notice to each beneficial owner of 

the Fund’s shares; and (c) upon the 

request of any financial intermediary, or 

its agent, that receives copies of the 

19(a) Notice, will pay the financial 

intermediary, or its agent, the 

reasonable expenses of sending the 19(a) 

Notice to the beneficial owners. 

5. Additional Board Determinations for 

Funds Whose Common Shares Trade at 

a Premium 

If: 

(a) The Fund’s common shares have 

traded on the stock exchange that they 

primarily trade on at the time in 

question at an average premium to NAV 

equal to or greater than 10%, as 

determined on the basis of the average 

of the discount or premium to NAV of 

the Fund’s common shares as of the 

close of each trading day over a 12-week 

rolling period (each the 12-week rolling 

period ending on the last trading day of 

each week); and 

(b) The Fund’s annualized 

distribution rate for the 12-week rolling 

period, expressed as a percentage of 

NAV as of the ending date of the 12- 

week rolling period, is greater than the 

Fund’s average annual total return in 

relation to the change in NAV over the 

2-year period ending on the last day of 

the 12-week rolling period; then: 

(i) At the earlier of the next regularly 

scheduled meeting or within four 

months of the last day of the 12-week 

rolling period, the Board, including a 

majority of the Independent Trustees: 

(1) Will request and evaluate, and the 

Fund’s Adviser will furnish, the 

information as may be reasonably 

necessary to make an informed 

determination of whether the 

Distribution Policy should be continued 

or continued after amendment; 

(2) will determine whether 

continuation, or continuation after 

amendment, of the Distribution Policy is 

consistent with the Fund’s investment 

objective(s) and policies and is in the 

best interests of the Fund and its 

shareholders, after considering the 

information in condition 5(b)(i)(1) 

above; including, without limitation: 

(A) Whether the Distribution Policy is 

accomplishing its purpose(s); 

(B) the reasonably foreseeable 

material effects of the Distribution 

Policy on the Fund’s long-term total 

return in relation to the market price 

and NAV of the Fund’s common shares; 

and 

(C) the Fund’s current distribution 

rate, as described in condition 5(b) 

above, compared with the Fund’s 

average annual taxable income or total 

return over the 2-year period, as 

described in condition 5(b), or the 

longer period as the Board deems 

appropriate; and 

(3) based upon that determination, 

will approve or disapprove the 

continuation, or continuation after 

amendment, of the Distribution Policy; 

and 

(ii) The Board will record the 

information considered by it, including 

its consideration of the factors listed in 

condition 5(b)(i)(2) above, and the basis 

for its approval or disapproval of the 

continuation, or continuation after 

amendment, of the Distribution Policy 

in its meeting minutes, which must be 

made and preserved for a period of not 

less than six years from the date of the 

meeting, the first two years in an easily 

accessible place. 

6. Public Offerings 

The Fund will not make a public 

offering of the Fund’s common shares 

other than: 

(a) A rights offering below NAV to 

holders of the Fund’s common shares; 

(b) an offering in connection with a 

dividend reinvestment plan, merger, 

consolidation, acquisition, spin-off or 

reorganization of the Fund; or 

(c) an offering other than an offering 

described in conditions 6(a) and 6(b) 

above, provided that, with respect to the 

other offering: 

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Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 63183 

5 If the Fund has been in operation fewer than six 

months, the measured period will begin 

immediately following the Fund’s first public 

offering. 

6 If the Fund has been in operation fewer than five 

years, the measured period will begin immediately 

following the Fund’s first public offering. 

1The term ‘‘Adviser’’ means (i) BlackRock 

Advisors and (ii) any entity controlling, controlled 

by or under common control with, BlackRock 

Advisors or its successor. For purposes of the 

requested order, ‘‘successor’’ is limited to an entity 

that results from a reorganization into another 

jurisdiction or a change in the type of business 

organization. 

2The term ‘‘Board’’ includes the board of 

directors or trustees of a Subadvised Fund. 

3A ‘‘Subadviser’’ for a Subadvised Fund is (a) an 

indirect or direct ‘‘wholly-owned subsidiary’’ (as 

such term is defined in the Act) of the Adviser for 

that Subadvised Fund; (b) a sister company of the 

Adviser for that Subadvised Fund that is an indirect 

or direct ‘‘wholly-owned subsidiary’’ (as such term 

is defined in the Act) of the same company that, 

indirectly or directly, wholly owns the Adviser 

(each of (a) and (b), a ‘‘Wholly-Owned Subadviser’’ 

and collectively, the ‘‘Wholly-Owned 

Subadvisers’’), or (c) not an ‘‘affiliated person’’ (as 

such term is defined in section 2(a)(3) of the Act) 

of the applicable Subadvised Fund, the Corporation 

or the Trust, as applicable, or the Adviser, except 

to the extent that an affiliation arises solely because 

the Subadviser serves as a subadviser to a 

Subadvised Fund (each, a ‘‘Non-Affiliated 

Subadviser’’). 

4Shareholder approval will continue to be 

required for any other subadviser changes and 

material amendments to an existing subadvisory 

agreement with any subadviser other than a NonAffiliated Subadviser or Wholly-Owned SubContinued 

(i) The Fund’s annualized distribution 

rate for the six months ending on the 

last day of the month ended 

immediately prior to the most recent 

distribution record date,5 expressed as a 

percentage of NAV as of the date, is no 

more than 1 percentage point greater 

than the Fund’s average annual total 

return for the 5-year period ending on 

the date; 6 and 

(ii) the transmittal letter 

accompanying any registration 

statement filed with the Commission in 

connection with the offering discloses 

that the Fund has received an order 

under section 19(b) to permit it to make 

periodic distributions of long-term 

capital gains with respect to its common 

shares as frequently as twelve times 

each year, and as frequently as 

distributions are specified by or 

determined in accordance with the 

terms of any outstanding preferred 

shares as the Fund may issue. 

7. Amendments to Rule 19b–1 

The requested order will expire on the 

effective date of any amendment to rule 

19b–1 that provides relief permitting 

certain closed-end investment 

companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common shares as frequently as twelve 

times each year. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25082 Filed 10–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31291; File No. 812–13784] 

BlackRock Advisors, LLC, et al.; Notice 

of Application 

October 16, 2014. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application under 

section 6(c) of the Investment Company 

Act of 1940 (‘‘Act’’) for an exemption 

from section 15(a) of the Act and rule 

18f–2 under the Act, as well as from 

certain disclosure requirements. 

SUMMARY OF APPLICATION: Applicants 

request an order that would permit them 

to enter into and materially amend 

subadvisory agreements with WhollyOwned Subadvisers (as defined below) 

and non-affiliated subadvisers without 

shareholder approval and would grant 

relief from certain disclosure 

requirements. 

APPLICANTS: BlackRock Advisors, LLC 

(‘‘BlackRock Advisors’’), BlackRock 

Funds (the ‘‘Trust’’), and FDP Series, 

Inc. (the ‘‘Corporation’’). 

FILING DATES: The application was filed 

on June 17, 2010, and amended on 

November 22, 2013, May 9, 2014, and 

October 3, 2014. 

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 November 10, 2014, 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, 55 East 52nd Street, New 

York, NY 10055. 

FOR FURTHER INFORMATION CONTACT: 

David J. Marcinkus, Senior Counsel, at 

(202) 551–6882, or David P. Bartels, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

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 Corporation is an open-end 

management investment company 

registered under the Act that is 

organized as a Maryland corporation. 

The Corporation is organized as a series 

fund (each, an ‘‘FDP Series’’) and 

currently consists of four FDP Series. 

The Trust is an open-end management 

investment company registered under 

the Act that is organized as a 

Massachusetts business trust. The Trust 

is organized as a series fund and 

currently consists of thirty-four series, 

only one of which, the BlackRock MultiManager Alternative Strategies Fund 

(the ‘‘Multi-Manager Fund’’), currently 

intends to operate under the manager of 

managers structure described in the 

application (the ‘‘Manager of Managers 

Structure’’). BlackRock Advisors is a 

Delaware limited liability company that 

is registered with the Commission as an 

investment adviser under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’). 

2. Applicants request an order to 

permit the Adviser,1 subject to the 

approval of the board of directors or 

trustees of the Corporation or the Trust, 

as applicable (each a ‘‘Board’’),2

including a majority of the directors or 

trustees who are not ‘‘interested 

persons’’ as defined in section 2(a)(19) 

of the Act of the Corporation or the 

Trust, as applicable, or of the Adviser 

(the ‘‘Independent Directors’’), to take 

certain actions without obtaining 

shareholder approval as follows: (i) 

Select certain wholly-owned an nonaffiliated investment advisers (each a 

‘‘Subadviser’’ 3) to manage all or a 

portion of the assets of one of more of 

the Subadvised Funds (as defined 

below) pursuant to an investment 

subadvisory agreement with each 

Subadviser (each a ‘‘Subadvisory 

Agreement’’), and (ii) materially amend 

Subadvisory Agreement with such 

Subadvisers.4 Applicants request that 

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