4058 Federal Register / Vol. 74, No. 13 / Thursday, January 22, 2009 / Notices 

1Applicants request that the order extend to any 

future series of the Trust, and any other existing or 

future registered open-end management investment 

companies and their series that are part of the same 

group of investment companies, as defined in 

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

are, or may in the future be, advised by the Adviser 

or any other investment adviser controlling, 

controlled by, or under common control with the 

Adviser (included in the term, ‘‘Funds’’). The Trust 

is the only registered investment company that 

currently intends to rely on the requested order. 

Any other entity that relies on the order in the 

future will comply with the terms and conditions 

of the application. 

1:30 p.m. Briefing on Uranium 

Enrichment—Part 2 (Public 

Meeting). 

(Contact for both parts: Brian Smith, 

301–492–3137) 

Both parts of this meeting will be 

webcast live at the Web address— 

www.nrc.gov 

3 p.m. Briefing on Uranium 

Enrichment (Closed—Ex. 1). 

Week of February 9, 2009—Tentative 

There are no meetings scheduled for 

the week of February 9, 2009. 

Week of February 16, 2009—Tentative 

There are no meetings scheduled for 

the week of February 16, 2009. 

Week of February 23, 2009—Tentative 

There are no meetings scheduled for 

the week of February 23, 2009. 

* * * * * 

*The schedule for Commission 

meetings is subject to change on short 

notice. To verify the status of meetings, 

call (recording)—(301) 415–1292. 

Contact person for more information: 

Rochelle Bavol, (301) 415–1651. 

* * * * * 

The NRC Commission Meeting 

Schedule can be found on the Internet 

at: www.nrc.gov/about-nrc/policymaking/schedule.html 

* * * * * 

The NRC provides reasonable 

accommodation to individuals with 

disabilities where appropriate. If you 

need a reasonable accommodation to 

participate in these public meetings, or 

need this meeting notice or the 

transcript or other information from the 

public meetings in another format (e.g., 

braille, large print), please notify the 

NRC’s Disability Program Coordinator, 

Rohn Brown, at 301–492–2279, TDD: 

301–415–2100, or by e-mail at 

rohn.brown@nrc.gov. Determinations on 

requests for reasonable accommodation 

will be made on a case-by-case basis. 

* * * * * 

This notice is distributed by mail to 

several hundred subscribers; if you no 

longer wish to receive it, or would like 

to be added to the distribution, please 

contact the Office of the Secretary, 

Washington, DC 20555 (301–415–1969). 

In addition, distribution of this meeting 

notice over the Internet system is 

available. If you are interested in 

receiving this Commission meeting 

schedule electronically, please send an 

electronic message to 

darlene.wright@nrc.gov. 

January 15, 2009. 

Rochelle C. Bavol, 

Office of the Secretary. 

[FR Doc. E9–1370 Filed 1–16–09; 11:15 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28581; 812–13523] 

Allstate Financial Investment Trust, et 

al.; Notice of Application 

January 12, 2009. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

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

Investment Company Act of 1940 

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

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

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

for an exemption from section 17(a) of 

the Act. 

Summary of the Application: 

Applicants request an order that would 

permit certain registered open-end 

management investment companies to 

acquire shares of other registered openend management investment companies 

and unit investment trusts that are 

within and outside the same group of 

investment companies. 

Applicants: Allstate Financial 

Investment Trust (‘‘Trust’’) and Allstate 

Institutional Advisers, LLC (‘‘Adviser’’). 

Filing Dates: The application was 

filed on April 18, 2008 and amended on 

October 14, 2008. Applicants have 

agreed to file an amendment during the 

notice period, the substance of which is 

reflected in this notice. 

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 February 6, 2009, 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, c/o Renee M. Hardt, 

Vedder Price P.C., 222 N. LaSalle Street, 

Chicago, IL 60601. 

FOR FURTHER INFORMATION CONTACT: 

Keith A. Gregory, Senior Counsel, at 

(202) 551–6815, or Mary Kay Frech, 

Branch Chief, at (202) 551–6821 (Office 

of Investment Company Regulation, 

Division of Investment Management). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained for a fee at the 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549–1520 (telephone (202) 551–5850). 

Applicants’ Representations 

1. The Trust, a Delaware statutory 

trust, is registered under the Act as an 

open-end management investment 

company. The Trust is a series trust 

which currently offers eight series, each 

of which has its own investment 

objectives and policies (‘‘Funds’’).1

2. The Adviser, a Delaware limited 

liability company, is registered as an 

investment adviser under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’) and serves as 

investment adviser to the Funds. The 

Adviser is a wholly-owned subsidiary of 

Allstate Life Insurance Company, which 

is an indirect, wholly-owned subsidiary 

of The Allstate Corporation. The 

Adviser currently employs 

AllianceBerstein L.P. to manage the 

Funds of Funds (as defined below) and 

Allstate Investment Management 

Company (‘‘AIMCO’’), an affiliate of the 

Adviser, to manage the Allstate Large 

Cap Index, a Fund of the Trust. 

AllianceBernstein L.P. and AIMCO are, 

and any future subadviser will be, 

registered under the Advisers Act. 

3. Applicants request relief to permit: 

(a) A Fund (each a ‘‘Fund of Funds’’) to 

acquire shares of registered open-end 

management investment companies (the 

‘‘Unaffiliated Investment Companies’’) 

and unit investment trusts (‘‘UITs’’) that 

are not part of the ‘‘same group of 

investment companies’’ (as defined in 

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

Fund of Funds (‘‘Unaffiliated Trusts,’’ 


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2An Unaffiliated Fund, including an ETF, would 

retain its right to reject any initial investment by a 

Continued 

together with the Unaffiliated 

Investment Companies, the 

‘‘Unaffiliated Funds’’); (b) the 

Unaffiliated Funds, their principal 

underwriters and any broker or dealer 

registered under the Securities 

Exchange Act of 1934 (‘‘Broker’’) to sell 

shares of the Unaffiliated Funds to the 

Fund of Funds; (c) the Fund of Funds 

to acquire shares of Allstate Large Cap 

Index Fund and other Funds in the 

‘‘same group of investment companies’’ 

(as defined in section 12(d)(1)(G)(ii) of 

the Act) as the Fund of Funds 

(collectively, the ‘‘Affiliated Funds,’’ 

and together with the Unaffiliated 

Funds, the ‘‘Underlying Funds’’); and 

(d) the Affiliated Funds, their principal 

underwriters and any Broker to sell 

shares of the Affiliated Funds to the 

Fund of Funds. Certain of the 

Unaffiliated Funds may be registered 

under the Act as either UITs or openend management investment companies 

and have obtained exemptions from the 

Commission necessary to permit their 

shares to be listed and traded on a 

national securities exchange at 

negotiated prices (‘‘ETFs’’). Each Fund 

of Funds also may invest in other 

securities and financial instruments that 

are not issued by registered investment 

companies and are consistent with its 

investment objective and restrictions. 

Applicants’ Legal Analysis 

A. Section 12(d)(1) 

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

prohibits a registered investment 

company from acquiring shares of an 

investment company if the securities 

represent more than 3% of the total 

outstanding voting stock of the acquired 

company, more than 5% of the total 

assets of the acquiring company, or, 

together with the securities of any other 

investment companies, more than 10% 

of the total assets of the acquiring 

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

prohibits a registered open-end 

investment company, its principal 

underwriter and any broker or dealer 

from selling the shares of the investment 

company to another investment 

company if the sale will cause the 

acquiring company to own more than 

3% of the acquired company’s voting 

stock, or if the sale will cause more than 

10% of the acquired company’s voting 

stock to be owned by investment 

companies generally. 

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 

the Funds of Funds to acquire shares of 

the Underlying Funds in excess of the 

limits set forth in section 12(d)(1)(A) of 

the Act and to permit the Underlying 

Funds, their principal underwriters and 

any Broker to sell shares of the 

Underlying Funds to the Funds of 

Funds in excess of the limits set forth 

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

3. Applicants state that 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 or its affiliated persons 

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 state that the proposed 

arrangement will not result in undue 

influence by a Fund of Funds or its 

affiliated persons over the Underlying 

Funds. The concern about undue 

influence does not arise in connection 

with a Fund of Funds’ investment in the 

Affiliated Funds, since they are part of 

the same group of investment 

companies. To limit the control that a 

Fund of Funds or its affiliated persons 

may have over an Unaffiliated Fund, 

applicants submit that: (a) The Adviser 

and any person controlling, controlled 

by or under common control with the 

Adviser, any investment company and 

any issuer that would be an investment 

company but for section 3(c)(1) or 

section 3(c)(7) of the Act advised or 

sponsored by the Adviser or any person 

controlling, controlled by or under 

common control with the Adviser 

(collectively, the ‘‘Group’’), and (b) any 

investment adviser within the meaning 

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

Fund of Funds (‘‘Sub-Adviser’’) and 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 

by the Sub-Adviser or any person 

controlling, controlled by or under 

common control with the Sub-Adviser 

(collectively, the ‘‘Sub-Adviser Group’’) 

will not control (individually or in the 

aggregate) an Unaffiliated Fund within 

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

5. Applicants further state that 

condition 2 below precludes a Fund of 

Funds or the Adviser, any Sub-Adviser, 

promoter or principal underwriter of a 

Fund of Funds, and any person 

controlling, controlled by, or under 

common control with any of those 

entities (each, a ‘‘Fund of Funds 

Affiliate’’) from taking advantage of an 

Unaffiliated Fund with respect to 

transactions between a Fund of Funds 

or a Fund of Funds Affiliate and the 

Unaffiliated Fund or its investment 

adviser(s), sponsor, promoter and 

principal underwriter and any person 

controlling, controlled by or under 

common control with any of those 

entities (each, an ‘‘Unaffiliated Fund 

Affiliate’’). 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 officer, director, 

trustee, advisory board member, 

investment adviser, Sub-Adviser, or 

employee of the Fund of Funds, or a 

person of which any such officer, 

director, trustee, investment adviser, 

Sub-Adviser, member of an advisory 

board, or employee is an affiliated 

person (each, an ‘‘Underwriting 

Affiliate,’’ except any person whose 

relationship to the Unaffiliated Fund is 

covered by section 10(f) of the Act is not 

an Underwriting Affiliate). An offering 

of securities during the existence of any 

underwriting or selling syndicate of 

which a principal underwriter is an 

Underwriting Affiliate is an ‘‘Affiliated 

Underwriting.’’ 

6. 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, a Fund of 

Funds and the Unaffiliated Investment 

Company will execute an agreement 

stating, without limitation, that their 

boards of directors or trustees 

(‘‘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 

Fund (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.2


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4060 Federal Register / Vol. 74, No. 13 / Thursday, January 22, 2009 / Notices 

Fund of Funds in excess of limit in section 

12(d)(1)(A)(i) of the Act by declining to execute the 

Participation Agreement with the Fund of Funds. 

3Applicants 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 the 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) of the Act. The Participation 

Agreement also will include this acknowledgement. 

4Applicants 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) for 

those transactions. 

7. Applicants 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,’’ as defined in 

section 2(a)(19) of the Act 

(‘‘Independent Trustees’’) will find that 

the advisory fees charged under the 

advisory contract are based on services 

provided that are in addition to, rather 

than duplicative of, services provided 

pursuant to any Underlying Fund’s 

advisory contract(s). Applicants further 

state that 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 

pursuant to 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 an affiliated 

person of the Adviser by the 

Unaffiliated Investment Company, in 

connection with the investment by the 

Fund of Funds in the Unaffiliated Fund. 

8. Applicants state that any sales 

charges and/or service fees charged with 

respect to shares of a Fund of Funds 

will not exceed the limits applicable to 

funds of funds set forth in Rule 2830 of 

the Conduct Rules of the NASD. 

9. Applicants state that the proposed 

arrangement will not create an overly 

complex fund structure. Applicants note 

that an Underlying Fund will be 

prohibited from acquiring 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 12 below. Applicants also 

represent that a Fund of Funds’ 

prospectus and sales literature will 

contain concise, ‘‘plain English’’ 

disclosure designed to inform investors 

about the unique characteristics of the 

proposed arrangement, including, but 

not limited to, the expense structure and 

the additional expenses of investing in 

Underlying Funds. 

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 persons 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. Applicants state 

that the Funds of Funds and the 

Affiliated Funds may 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 Underlying 

Funds may be deemed to be affiliated 

persons of each other if a Fund of Funds 

acquires 5% or more of an Underlying 

Fund’s outstanding voting securities. In 

light of these possible affiliations, 

section 17(a) could prevent an 

Underlying Fund from selling shares to 

and redeeming shares from a Fund of 

Funds.3

2. 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 person 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. 

3. Applicants submit that the 

proposed transactions satisfy the 

requirements for relief under sections 

17(b) and 6(c) of the Act as the terms are 

fair and reasonable 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 each 

Underlying Fund.4 Applicants also state 

that the proposed transactions will be 

consistent with the policies of each 

Fund of Funds and Underlying Fund, 

and with the general purposes of the 

Act. 

Applicants’ Conditions 

Applicants agree that the order 

granting the requested relief shall be 

subject to the following conditions: 

1. The members of the 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 Sub-Adviser 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 Group or a SubAdviser Group, each in the aggregate, 

becomes a holder of more than 25% of 

the outstanding voting securities of the 

Unaffiliated Fund, then the Group or the 

Sub-Adviser 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 Sub-Adviser Group with respect to an 

Unaffiliated Fund for which the SubAdviser or a person controlling, 

controlled by, or under common control 

with the Sub-Adviser acts as the 

investment adviser within the meaning 

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 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 Sub-Adviser 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 


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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 procedures 

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 will maintain and preserve 

permanently in an easily accessible 

place a written copy of the procedures 

described in the preceding condition, 

and any modifications to such 

procedures, and will maintain and 

preserve for a period of not less than six 

years from the end of the fiscal year in 

which any purchase from 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) the 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 

Investment Company of any changes to 

the list 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 the 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 

pursuant to 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 the Unaffiliated Investment 

Company, in connection with the 

investment by the Fund of Funds in the 

Unaffiliated Fund. Any Sub-Adviser 

will waive fees otherwise payable to the 

Sub-Adviser, directly or indirectly, by 

the Fund of Funds in an amount at least 

equal to any compensation received by 

the Sub-Adviser, or an affiliated person 

of the Sub-Adviser, from an Unaffiliated 

Fund, other than any advisory fees paid 

to the Sub-Adviser or its affiliated 

person by the Unaffiliated Investment 

Company, in connection with the 

investment by the Fund of Funds in the 

Unaffiliated Fund made at the direction 

of the Sub-Adviser. In the event that the 

Sub-Adviser waives fees, the benefit of 

the waiver will be passed through to the 

Fund of Funds. 

11. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to funds of funds set 

forth in NASD Conduct Rule 2830. 

12. 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) 


rmajette on PRODPC74 with NOTICES
4062 Federal Register / Vol. 74, No. 13 / Thursday, January 22, 2009 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b-4. 

3See Securities Exchange Act Release No. 59053 

(December 4, 2008), 73 FR 76078 (the ‘‘Notice’’). 

4According to ISE, at times, the Exchange is 

unable to list new products because existing PMMs 

are not interested in trading the options class. At 

other times, ISE must delist certain products due to 

lack of PMM interest. ISE represents that this occurs 

most frequently with respect to options on stocks 

that have pending corporate actions and options 

products that are not listed at any other options 

exchange. ISE believes that despite the lack of PMM 

interest, these products may be of interest to other 

market making firms at the Exchange. 

5Only CMMs that own or lease CMM Rights shall 

be eligible to be appointed as an Alternative PMM. 

That is, Electronic Access Members acting as 

market makers in the Second Market will not be 

eligible to be appointed as Alternative PMMs. 

6For example, Alternative PMMs would enjoy 

privileges that include, among other things, 

participation rights and small order execution 

preference while accepting responsibilities that 

include, among other things, the obligation to 

provide continuous quotations in the options class 

to which the Alternative PMM is appointed, and the 

obligation to conduct the opening rotation on a 

daily basis for as long as the Alternative PMM is 

appointed to that options class. 

7 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

8 15 U.S.C. 78f(b)(5). 

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. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–1083 Filed 1–21–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: [74 FR 1734, January 

13, 2009]. 

STATUS: Closed Meeting. 

PLACE: 100 F Street, NE., Washington, 

DC. 

DATE AND TIME OF PREVIOUSLY ANNOUNCED

MEETING: Thursday, January 15, 2009 at 

1 p.m. 

CHANGE IN THE MEETING: Additional 

Item. 

The following item has been added to 

the Thursday, January 15, 2009 Closed 

Meeting agenda: 

A matter related to a financial 

institution. 

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. 552(b)(c)(7), (8) (9)(B) and and 17 

CFR 200.402(a)(7), (8) and (9)(B) permit 

consideration of the scheduled matter at 

the Closed Meeting. 

Commissioner Aguilar, as duty 

officer, determined that Commission 

business required the above change and 

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: January 15, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–1241 Filed 1–21–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59250; File No. SR–ISE– 

2008–90] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Order Approving Proposed Rule 

Change Relating to Alternative Primary 

Market Makers 

January 14, 2009. 

I. Introduction 

On November 21, 2008, the 

International Securities Exchange, LLC 

(‘‘ISE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (the ‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change 

relating to the introduction of 

Alternative Primary Market Makers 

(‘‘Alternative PMMs’’) on the Exchange. 

The proposed rule change was 

published for comment in the Federal 

Register on December 15, 2008.3 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to amend ISE 

Rule 802 to provide for Alternative 

PMMs. Currently, when the ISE lists 

new options classes, it allocates them to 

one of its Primary Market Makers 

(‘‘PMMs’’) under ISE Rule 802. Pursuant 

to power delegated to the Board, an 

Allocation Committee, which consists of 

representatives of Electronic Access 

Members, makes allocation decisions 

according to the guidelines contained in 

ISE Rule 802. Under ISE Rule 802, 

allocations are voluntary.4 To better 

enable the Exchange to list and retain 

options classes that PMMs do not wish 

to trade, ISE proposes to appoint 

Competitive Market Makers (‘‘CMMs’’) 

that meet certain qualifications as 

Alternative PMMs when none of the 

PMMs want an allocation.5

Under the proposal, if no PMMs or 

Second Market PMMs (as applicable) 

want the allocation, the Alternative 

PMMs would be offered the opportunity 

to serve as PMM in the options class in 

accordance with the Exchange’s regular 

allocation procedures. Once appointed 

to an options class, the Alternative 

PMM would have all of the 

responsibilities and privileges of a PMM 

under the ISE Rules with respect to all 

appointed options classes.6 If an 

Alternative PMM ceases trading of an 

options class, that options class will be 

reallocated by the Exchange. An 

Alternative PMM will not have any 

transferable rights in options classes to 

which it is appointed nor will it have 

any PMM voting rights. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.7 In particular, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,8 which requires that an exchange 

have rules designed to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The Commission believes that the 

proposed rule change, which is 

intended to allow the Exchange to 

allocate more new products and to 

facilitate the continued listing of 

existing products, is consistent with the 

Act. The Commission believes that the 

introduction of Alternative PMMs on 


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