71466 Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 

19This estimate is based on the following 

calculations: (9612 hours + 23,200 hours + 133.5 

hours = 32,945.5 hours); ($3,652,560 + $8,816,000 

+ $7609.50 = $12,476,169.50). 

20This estimate is based on the following 

calculations: (52 + 365 = 417); (417 × 801 fund 

groups = 334,017). 

21This estimate is based on the following 

calculations: (884 hours (board determination) + 

32,945.5 hours (information sharing agreements) = 

33,829.5 total hours); ($12,476,169.50 + $646,952 = 

$13,123,121.50). 

sharing agreement requirements of rule 

22c–2(a)(2) and (3), it requires a total of 

32,945.5 hours at a cost of 

$12,476,169.50.19

The Commission staff estimates that 

on average, each fund group requests 

shareholder information once a week, 

and gives instructions regarding the 

restriction of shareholder trades every 

day, for a total of 417 responses related 

to information sharing systems per fund 

group each year, and a total 334,017 

responses for all fund groups 

annually.20 In addition, as described 

above, the staff estimates that funds 

make 68 responses related to board 

determinations, 2403 responses related 

to new intermediaries of existing fund 

groups, 5800 responses related to new 

fund group information sharing 

agreements, and 801 responses related 

to recordkeeping, for a total of 9072 

responses related to the other 

requirements of rule 22c–2. Therefore, 

the Commission staff estimates that the 

total number of responses is 343,164 

(334,017 + 9147 = 343,164). 

The Commission staff estimates that 

the total hour burden for rule 22c–2 is 

33,829.5 hours at a cost of 

$13,123,121.50.21 Responses provided 

to the Commission will be accorded the 

same level of confidentiality accorded to 

other responses provided to the 

Commission in the context of its 

examination and oversight program. 

Responses provided in the context of 

the Commission’s examination and 

oversight program are generally kept 

confidential. Complying with the 

information collections of rule 22c–2 is 

mandatory for funds that redeem their 

shares within 7 days of purchase. An 

agency may not conduct or sponsor, and 

a person is not required to respond to 

a collection of information unless it 

displays a currently valid control 

number. 

The public may view the background 

documentation for this information 

collection at the following Web site, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. Comments must be 

submitted to OMB within 30 days of 

this notice. 

Dated: November 25, 2014. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28309 Filed 12–1–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IC–31359; 812–14390 

Banc of America Mortgage Securities, 

Inc., et al.; Notice of Application and 

Temporary Order 

November 25, 2014. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Temporary order and notice of 

application for a permanent order under 

section 9(c) of the Investment Company 

Act of 1940 (‘‘Act’’). 

SUMMARY: Applicants have received a 

temporary order (the ‘‘Temporary 

Order’’) exempting them from section 

9(a) of the Act, with respect to 

injunctions entered against Bank of 

America, N.A. (‘‘BANA’’), Merrill 

Lynch, Pierce, Fenner & Smith 

Incorporated (‘‘Merrill Lynch’’), and 

Banc of America Mortgage Securities, 

Inc. (‘‘BOAMS,’’ and, together with 

BANA and Merrill Lynch, the 

‘‘Respondents’’) on November 25, 2014 

by the United States District Court for 

the Western District of North Carolina 

(the ‘‘District Court’’) until the 

Commission takes final action on an 

application for a permanent order (the 

‘‘Permanent Order,’’ and with the 

Temporary Order, the ‘‘Orders’’). 

Applicants also have applied for a 

Permanent Order. 

Applicants: BofA Advisors, LLC 

(‘‘BoA Advisors’’), BofA Distributors, 

Inc. (‘‘BoA Distributors’’), KECALP Inc. 

(‘‘KECALP’’), Merrill Lynch Ventures, 

LLC (‘‘Ventures’’), Merrill Lynch Global 

Private Equity, Inc. (‘‘MLGPE’’), and 

Merrill Lynch Alternative Investments 

LLC (‘‘MLAI’’) (each, an ‘‘Applicant’’ 

and collectively, the ‘‘Applicants’’), and 

solely for purposes of agreeing to 

condition 3 of the application, the 

Respondents. 

DATES: Filing Date: The application was 

filed on November 25, 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 December 22, 2014, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, 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: BOAMS, 21 North Tryon 

Street, Charlotte, NC 28255; BANA and 

Merrill Lynch, Bank of America Tower, 

One Bryant Park, New York, NY 10036; 

BoA Advisors and BoA Distributors, 100 

Federal Street, Boston, MA 02110; 

KECALP and Ventures, 135 South 

LaSalle Street, Chicago, IL 60604; 

MLGPE, 135 South La Salle Street, Suite 

811, Chicago, IL 60603; and MLAI, 4 

World Financial Center, 250 Vesey 

Street, 11th Floor, New York, NY 10080. 

FOR FURTHER INFORMATION CONTACT: 

David J. Marcinkus, Senior Counsel, at 

202–551–6882 or Mary Kay Frech, 

Branch Chief, at 202–551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a temporary order and 

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. Bank of America Corporation 

(‘‘BAC’’), a corporation organized under 

the laws of Delaware, is a publicly 

traded company headquartered in 

Charlotte, North Carolina. As noted 

below, each of the Respondents and 

each of the Applicants is a direct or 

indirect wholly-owned subsidiary of 

BAC. BANA is a nationally chartered 

banking association headquartered in 

Charlotte, North Carolina that conducts 

retail, trust and commercial banking 

operations. BANA is an indirect whollyVerDate Sep<11>2014 15:30 Dec 01, 2014 Jkt 235001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1

rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 71467 

1The conduct alleged in the Complaint is referred 

to herein as the ‘‘Conduct.’’ 

2Securities and Exchange Commission v. Bank of 

America, N.A., et al., Civil Action No. 3:13–cv–447 

(W.D.N.C. Nov. 25, 2014). 

3BANA was not named as a defendant in 

connection with the Commission’s section 5(b)(1) 

claim and therefore did not consent to the entry of 

an injunction under that section. 

owned subsidiary of BAC. BOAMS, a 

corporation organized under the laws of 

Delaware, is a direct wholly-owned 

subsidiary of BANA. Merrill Lynch, a 

corporation organized under the laws of 

Delaware, is an indirect wholly-owned 

subsidiary of BAC. Merrill Lynch, 

directly and through its subsidiaries and 

affiliates, provides investment, 

financing, advisory, insurance, banking 

and related products and services, and 

is registered as a broker-dealer under the 

Securities Exchange Act of 1934, and as 

an investment adviser under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’). Merrill Lynch does not 

currently engage in Fund Service 

Activities (defined below), but it may do 

so in the future. 

2. Each of the Applicants serves either 

as investment adviser (as defined in 

section 2(a)(20) of the Act) to 

investment companies registered under 

the Act or series of such companies 

(‘‘Funds’’) or employees’ securities 

companies (‘‘ESCs’’), or as principal 

underwriter (as defined in section 

2(a)(29) of the Act) to open-end 

management investment companies 

registered under the Act (‘‘Open-End 

Funds’’). BoA Advisors, a limited 

liability company organized under the 

laws of Delaware, is registered as an 

investment adviser under the Advisers 

Act. BoA Advisors is a direct whollyowned subsidiary of BofA Global 

Capital Management Group, LLC, which 

is in turn a direct wholly-owned 

subsidiary of BANA. BoA Distributors, a 

corporation organized under the laws of 

Massachusetts, is an indirect whollyowned subsidiary of BoA Advisors. BoA 

Distributors is a limited purpose brokerdealer registered with the Commission. 

KECALP, a corporation organized under 

the laws of Delaware, is an indirect 

wholly-owned subsidiary of BAC. 

Ventures, a limited liability company 

organized under the laws of Delaware, 

is an indirect wholly-owned subsidiary 

of BAC. MLGPE, a corporation 

organized under the laws of Delaware, 

is registered as an investment adviser 

under the Advisers Act. MLGPE is an 

indirect wholly-owned subsidiary of 

BAC. MLAI, a limited liability company 

organized under the laws of Delaware, 

is registered as an investment adviser 

under the Advisers Act. MLAI is an 

indirect wholly-owned subsidiary of 

BAC. 

3. While no existing company of 

which the Respondents is an ‘‘affiliated 

person’’ within the meaning of section 

2(a)(3) of the Act (‘‘Affiliated Person’’), 

other than the Applicants, currently 

serves as an investment adviser or 

depositor of any Fund or ESC or 

investment company that has elected to 

be treated as a business development 

company under the Act, or principal 

underwriter for any Open-End Fund, 

unit investment trust registered under 

the Act, or face-amount certificate 

company registered under the Act (such 

activities, collectively, (‘‘Fund Service 

Activities’’), Applicants request that any 

relief granted also apply to any existing 

company of which any of the 

Respondents is an Affiliated Person and 

to any other company of which any of 

the Respondents may become an 

Affiliated Person in the future (together 

with Applicants and Merrill Lynch, the 

‘‘Covered Persons’’) with respect to any 

activity contemplated by section 9(a) of 

the Act. 

4. On August 6, 2013, the Commission 

filed a complaint (the ‘‘Complaint’’) 

against the Respondents in the District 

Court in a civil action captioned 

Securities and Exchange Commission v. 

Bank of America, N.A., et al. (the 

‘‘BOAMS Action’’).1 The Complaint 

alleges violations of sections 17(a)(2) 

and 17(a)(3) of the Securities Act of 

1933 (the ‘‘Securities Act’’) by 

Respondents arising out of an offering of 

prime residential mortgage-backed 

securities (‘‘RMBS’’) in 2008 known as 

BOAMS 2008–A. The Complaint also 

alleges that Merrill Lynch and BOAMS 

violated section 5(b)(1) of the Securities 

Act by disclosing certain data regarding 

BOAMS 2008–A to some, but not all, 

investors, as well as by failing to file 

such data with the Commission. 

5. In settlement of the BOAMS 

Action, Respondents submitted 

executed Consents of Defendants 

BANA, Merrill Lynch and BOAMS (the 

‘‘Consents’’). In the Consents, 

Respondents agreed to the entry of a 

final judgment, without admitting or 

denying the allegations contained in the 

Complaint (other than those relating to 

the jurisdiction of the District Court). 

On November 25, 2014 the District 

Court entered a judgment against 

Respondents (the ‘‘Judgment’’) 2 that 

enjoined Respondents from violating, 

directly or indirectly, sections 17(a)(2), 

17(a)(3) and 5(b)(1) 3 of the Securities 

Act (the ‘‘Injunctions’’). 

Applicants’ Legal Analysis 

1. Section 9(a)(2) of the Act, in 

relevant part, prohibits a person who 

has been enjoined from engaging in or 

continuing any conduct or practice in 

connection with the purchase or sale of 

a security, or in connection with 

activities as an underwriter, from 

performing Fund Service Activities. 

Section 9(a)(3) of the Act makes the 

prohibition in section 9(a)(2) applicable 

to a company, any Affiliated Person of 

which has been disqualified under the 

provisions of section 9(a)(2). Section 

2(a)(3) of the Act defines ‘‘affiliated 

person’’ to include, among others: (a) 

Any person directly or indirectly 

owning, controlling, or holding with 

power to vote, five per centum or more 

of the outstanding voting securities of 

such other person; (b) any person five 

per centum or more of whose 

outstanding voting securities are 

directly or indirectly owned, controlled, 

or held with power to vote, by such 

other person; and (c) any person directly 

or indirectly controlling, controlled by, 

or under common control, with the 

other person. Applicants state that, 

taken together, sections 9(a)(2) and 

9(a)(3) would have the effect of 

precluding Applicants and Covered 

Persons from engaging in Fund Service 

Activities upon the entry of the 

Injunctions because the Respondents are 

Affiliated Persons of each Applicant and 

Covered Person. 

2. Section 9(c) of the Act provides 

that, upon application, the Commission 

shall by order grant an exemption from 

the disqualification provisions of 

section 9(a) of the Act, either 

unconditionally or on an appropriate 

temporary or other conditional basis, to 

any person if that person establishes 

that: (i) The prohibitions of section 9(a), 

as applied to the person, are unduly or 

disproportionately severe or (ii) the 

conduct of the person has been such as 

not to make it against the public interest 

or the protection of investors to grant 

the exemption. Applicants have filed an 

application pursuant to section 9(c) 

seeking a Temporary Order and a 

Permanent Order exempting them and 

other Covered Persons from the 

disqualification provisions of section 

9(a) of the Act. The Applicants and 

other Covered Persons may, if the relief 

is granted, in the future act in any of the 

capacities contemplated by section 9(a) 

of the Act subject to the conditions of 

the Temporary Order and the Permanent 

Order. 

3. Applicants believe they meet the 

standard for exemption specified in 

section 9(c) of the Act. Applicants state 

that the prohibitions of section 9(a) as 

applied to them would be unduly and 

disproportionately severe and that the 

conduct of Applicants has been such as 

not to make it against the public interest 


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71468 Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 

4Applicants state that none of the Respondents 

currently serve in any of the capacities described 

in section 9(a) of the Act, and BANA and BOAMS 

will not do so in the future. Merrill Lynch has 

engaged in Fund Service Activities in the past 

(although it ceased doing so by the end of 2010), 

and it may do so in the future. 

5The ‘‘Adviser Applicants’’ are BoA Advisors, 

KECALP, Ventures, MLGPE, and MLAI. 

or the protection of investors to grant 

the exemption from section 9(a). 

4. Applicants state that the Conduct 

did not involve any of the Applicants 

engaging in Fund Service Activities.4

Applicants also state that the Conduct 

did not involve any Fund or ESC with 

respect to which Applicants engaged in 

Fund Service Activities. In addition, 

Applicants state that none of the Funds 

or ESCs with respect to which 

Applicants provide Fund Service 

Activities purchased or held BOAMS 

2008–A. 

5. Applicants and Respondents state 

that (a) none of the current directors, 

officers or employees of Applicants had 

any involvement in the Conduct; (b) 

none of the current directors, officers or 

employees of Respondents had any 

responsibility for the Conduct; (c) no 

current or former employee of 

Respondents who previously has been 

or who subsequently may be identified 

by Respondents or any U.S. regulatory 

or enforcement agencies as having been 

responsible for the Conduct will be an 

officer, director or employee of any 

Covered Person; and (d) the employees 

of Respondents who were identified as 

having been responsible for the Conduct 

have had no, and will not have any 

involvement in the provision of Fund 

Service Activities on behalf of 

Applicants or other Covered Persons. 

Applicants assert that because the 

personnel of Applicants did not have 

any involvement in the Conduct, 

shareholders of the Funds and ESCs 

were not affected any differently than if 

those Funds and ESCs had received 

services from any investment adviser or 

principal underwriter that was not 

affiliated with Respondents. 

6. Applicants submit that section 9(a) 

should not operate to bar them from 

serving the Funds or ESCs and their 

shareholders in the absence of improper 

activities relating to their Fund Service 

Activities. Applicants state that the 

section 9(a) disqualification would 

result in material economic losses for 

the Funds and ESCs to which 

Applicants provide Funds Service 

Activities, and such Funds’ operations 

would be disrupted, as they sought to 

engage new advisers and distributors. 

Applicants assert that these effects 

would be unduly severe given the 

Applicants’ lack of involvement in the 

Conduct. Moreover, Applicants state 

that the Respondents have taken 

remedial actions to address the 

Conduct, as outlined in the application. 

Thus, Applicants believe that granting 

the exemption from section 9(a), as 

requested, would be consistent with the 

public interest and the protection of 

investors. 

7. Applicants state that (a) inability of 

the Adviser Applicants 5 to continue 

providing investment advisory services 

to Funds would result in the Funds and 

their shareholders facing potential 

hardship and (b) the inability of BoA 

Distributors to continue to serve as 

principal underwriters to the Open-End 

Funds would similarly result in 

potential hardship to the Open-End 

Funds and their shareholders. 

Applicants state that they will distribute 

to the board of trustees/directors of the 

Funds (the ‘‘Boards’’) written materials 

describing the circumstances alleged in 

the BOAMS Action and any impact on 

the Funds, and the application. The 

written materials will include an offer to 

discuss the materials at an in-person 

meeting with each Board for which 

Applicants provide Fund Service 

Activities, including the directors who 

are not ‘‘interested persons’’ of the Fund 

as defined in section 2(a)(19) of the Act, 

and their independent legal counsel as 

defined in rule 0–1(a)(6) under the Act. 

Applicants state that they will provide 

the Boards with the information 

concerning the BOAMS Action and the 

application that is necessary for those 

Funds to fulfill their disclosure and 

other obligations under the federal 

securities laws and will provide them a 

copy of the Judgment as entered by the 

District Court. 

8. Applicants state that if the 

Applicants were barred under section 

9(a) of the Act from engaging in Fund 

Service Activities and were unable to 

obtain the requested exemption, the 

effect on their businesses and 

employees would be severe because 

they have committed substantial capital 

and other resources to establishing an 

expertise in the provision of Fund 

Service Activities. Applicants further 

state that prohibiting them from 

providing Fund Service Activities 

would not only adversely affect their 

business, but would also adversely 

affect their employees who are involved 

in those activities. Applicants state that 

many of these employees could 

experience significant difficulties in 

finding alternative fund-related 

employment. 

9. Applicants state that Applicants 

and certain other affiliated persons of 

Applicants have previously received 

orders under section 9(c) of the Act, as 

the result of conduct that triggered 

section 9(a), as described in greater 

detail in the application. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the following conditions: 

1. Any temporary exemption granted 

pursuant to the application will be 

without prejudice to, and will not limit 

the Commission’s rights in any manner 

with respect to, any Commission 

investigation of, or administrative 

proceedings involving or against, 

Covered Persons, including, without 

limitation, the consideration by the 

Commission of a permanent exemption 

from section 9(a) of the Act requested 

pursuant to the application or the 

revocation or removal of any temporary 

exemptions granted under the Act in 

connection with the application. 

2. Each Applicant and Covered Person 

will adopt and implement policies and 

procedures reasonably designed to 

ensure that it will comply with the 

terms and conditions of the Orders 

within 60 days of the date of the 

Permanent Order. 

3. Respondents will comply in all 

material respects with the material 

terms and conditions of the Orders. 

4. Applicants will provide written 

notification to the Chief Counsel of the 

Commission’s Division of Investment 

Management with a copy to the Chief 

Counsel of the Commission’s Division of 

Enforcement of a material violation of 

the terms and conditions of the Orders 

and the Judgment within 30 days of 

discovery of the material violation. 

Temporary Order 

The Commission has considered the 

matter and finds that Applicants have 

made the necessary showing to justify 

granting a temporary exemption. 

Accordingly, 

It is hereby ordered, pursuant to 

section 9(c) of the Act, that Applicants 

and any other Covered Persons are 

granted a temporary exemption from the 

provisions of section 9(a), solely with 

respect to the Injunctions, subject to the 

representations and conditions in the 

application, from November 25, 2014, 

until the Commission takes final action 

on their application for a permanent 

order. 

By the Commission. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28314 Filed 12–1–14; 8:45 am] 

BILLING CODE 8011–01–P 


rljohnson on DSK3VPTVN1PROD with NOTICES