Federal Register / Vol. 74, No. 137 / Monday, July 20, 2009 / Notices 35211 

1UTG is the only closed-end investment 

company that currently intends to rely on the order. 

Applicants request that the order also apply to any 

registered closed-end investment company that in 

the future: (a) Is advised by the Investment Adviser 

(including any successor in interest) or by any 

entity controlling, controlled by, or under common 

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

Act) with the Investment Adviser; and (b) complies 

with the terms and conditions of the requested 

order (collectively with UTG, ‘‘Funds’’). 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. 

Commission’s docket room for 

inspection during regular business 

hours, and are available on the 

Commission’s Web site at http:// 

www.prc.gov. 

Further procedures. Section 3661(c) of 

title 39 requires that the Commission 

afford an opportunity for formal, on-therecord hearing of the Postal Service’s 

Request under the terms specified in 

sections 556 and 557 of title 5 of the 

United States Code before issuing its 

advisory opinion. All interested parties 

are hereby notified that notices of 

intervention in this proceeding shall be 

due on July 28, 2009. Any participant 

requesting a hearing in this matter shall 

so state in conformance with 39 CFR 

3001.20(b). 

At this time, the Commission cannot 

anticipate the duration, or even the 

exact form, proceedings on this matter 

will take. Participants who wish to offer 

their views on these issues may do so 

in their interventions. Due to the nature 

of this Initiative, the Commission may 

consider holding public hearings 

outside of Washington, DC. 

The Postal Service indicates that its 

Initiative was fostered, in part, by the 

current financial crisis and the 

continuing decline in mail volume. In 

light of this, it requests that the 

Commission expeditiously issue its 

opinion. However, a proposal for 

changes which could impact the nature 

of postal service on a nationwide basis 

must be examined carefully. The 

Commission urges participants to 

carefully consider, prior to the 

prehearing conference, the justification 

for any proposed discovery period. 

The Commission will hold a 

prehearing conference in this docket on 

July 30, 2009 at which these questions 

will be discussed. 

Public participation. Section 3661(c) 

of title 39 requires the participation of 

an ‘‘officer of the Commission who shall 

be required to represent the interests of 

the general public’’ in these 

proceedings. Robert Sidman is 

designated to serve as Public 

Representative to represent the interests 

of the general public. 

It is ordered: 

1. The Commission establishes Docket 

No. N2009–1 to consider the Postal 

Service Request referred to in the body 

of this order. 

2. The Commission will act en banc 

in this proceeding. 

3. Notices of intervention shall be 

filed no later than July 28, 2009. 

4. Participants who wish to request a 

hearing on the Postal Service’s Request 

in this docket shall submit such a 

request, together with statements in 

conformance with 39 CFR 3001.20(b), 

on or before July 28, 2009. 

5. A prehearing conference is 

scheduled for July 30, 2009, at 9:30 a.m., 

in the Commission’s hearing room. 

6. Pursuant to 39 U.S.C. 3661(c), the 

Commission appoints Robert Sidman to 

represent the interests of the general 

public in this proceeding. 

7. The Secretary shall arrange for 

publication of this notice in the Federal 

Register. 

Issued: July 10, 2009. 

By the Commission. 

Judith M. Grady, 

Acting Secretary. 

[FR Doc. E9–17155 Filed 7–17–09; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28818; File No. 812–13200] 

Reaves Utility Income Fund, et al.; 

Notice of Application 

July 14, 2009. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of 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. 

SUMMARY OF APPLICATION: Applicants 

request an order to permit a registered 

closed-end investment company to 

make periodic distributions of long-term 

capital gains with respect to its common 

shares as often as monthly in any one 

taxable year, and as frequently as 

distributions are specified by or in 

accordance with the terms of its 

preferred shares. 

APPLICANTS: Reaves Utility Income Fund 

(‘‘UTG’’) and W.H. Reaves & Co., Inc. 

(‘‘Investment Adviser’’). 

DATES: Filing Dates: June 14, 2005, and 

amended on February 14, 2007, October 

15, 2008, April 20, 2009, and July 10, 

2009. 

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 August 10, 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, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1090; 

Applicants: Reaves Utility Income 

Fund, 1290 Broadway, Suite 1100, 

Denver, CO 80203, and W.H. Reaves & 

Co., Inc., 10 Exchange Place, 18th Floor, 

Jersey City, NJ 07302. 

FOR FURTHER INFORMATION CONTACT: 

Courtney S. Thornton, Senior Counsel, 

at (202) 551–6812, or Mary Kay Frech, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Office of Investment Company 

Regulation). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained 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. UTG is a registered closed-end 

management investment company 

organized as a Delaware statutory trust.1

UTG’s primary investment objective is 

to provide a high level of after-tax 

income and total return consisting 

primarily of tax-advantaged dividend 

income and capital appreciation. The 

common shares issued by UTG are 

listed on the NYSE Amex. UTG 

currently has three series of preferred 

shares outstanding, which are not listed 

or traded on any stock exchange. 

Applicants believe that the shareholders 

of UTG are generally conservative, 

dividend-sensitive investors who desire 

current income periodically and may 

favor a fixed distribution policy. 

2. The Investment Adviser is a 

Delaware corporation registered under 

the Investment Advisers Act of 1940 

(‘‘Advisers Act’’). The Investment 

Adviser serves as investment adviser to 


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35212 Federal Register / Vol. 74, No. 137 / Monday, July 20, 2009 / Notices 

UTG and may in the future serve as 

investment adviser to one or more 

additional Funds. Each Fund will be 

advised by an investment adviser that is 

registered under the Advisers Act. 

3. Applicants state that on December 

12, 2006, the Board of Trustees (the 

‘‘Board’’) of UTG, including a majority 

of the members of the Board who are not 

‘‘interested persons’’ of UTG as defined 

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

‘‘Independent Trustees’’), reviewed 

information regarding the purpose and 

terms of a proposed distribution policy, 

the reasonably foreseeable effect of such 

policy on UTG’s long-term total return 

(based on market price and net asset 

value (‘‘NAV’’) per common share) and 

the expected relationship between 

UTG’s distribution rate on its common 

shares under the policy and UTG’s total 

return (in relation to NAV per share). 

Applicants state that the Independent 

Trustees also considered information 

about any potential or actual conflicts of 

interest that the Investment Adviser, 

any affiliated persons of the Investment 

Adviser, or any other affiliated persons 

of UTG may have relating to the 

adoption or implementation of such 

policy. Applicants further state that 

after considering such information the 

Board, including the Independent 

Trustees, approved a distribution policy 

with respect to UTG’s common shares 

(the ‘‘Plan’’) and determined that such 

Plan is consistent with UTG’s 

investment objectives and policies and 

in the best interests of UTG’s common 

shareholders. Prior to implementing the 

Plan, the Board of UTG, including the 

Independent Trustees, will review the 

factors considered in connection with 

its approval of the Plan, as well as any 

changes in such factors since the date of 

its approval, and will confirm that the 

Plan is consistent with UTG’s 

investment objectives and policies and 

in the best interests of UTG’s common 

shareholders. 

4. Applicants state that the purpose of 

the Plan is to provide to UTG’s common 

shareholders a regular, monthly 

distribution that is not dependent on the 

timing or amount of investment income 

earned or capital gains realized by UTG. 

Applicants note that under the Plan, 

UTG will distribute all available 

investment income to shareholders, 

consistent with UTG’s primary 

investment objective of providing a high 

level of after-tax income and total 

returns. Applicants state that if and 

when sufficient investment income is 

not available on a monthly basis, UTG 

will distribute long-term capital gains 

and/or return of capital to its 

shareholders to maintain the level 

distribution rate that has been approved 

by the Board. Applicants further state 

that the minimum annual distribution 

rate will be independent of UTG’s 

performance during any particular 

period, but is expected to correlate with 

UTG’s performance over time. 

Applicants represent that the amount 

and frequency of distributions may be 

amended at any time by the Board 

without prior notice to UTG’s 

shareholders. Applicants state that if 

UTG’s net investment income and net 

realized capital gains for any year 

exceed the amount required to be 

distributed under the Plan, UTG will at 

a minimum make distributions 

necessary to comply with the 

distribution requirements of subchapter 

M of the Internal Revenue Code of 1986 

(‘‘Code’’). Applicants note that the Plan 

provides that it can be amended, 

suspended, or terminated at any time by 

the Board without prior notice to UTG’s 

shareholders. 

5. Applicants state that at the 

December 12, 2006 meeting, the Board 

adopted policies and procedures under 

rule 38a–1 under the Act that are 

reasonably designed to ensure that all 

notices required to be sent to UTG’s 

shareholders pursuant to section 19(a) 

of the Act, rule 19a–1 under the Act, 

and condition IV below (‘‘19(a) 

Notices’’) comply with condition II 

below, and that all other written 

communications by UTG or its agents 

regarding distributions under the Plan 

include the disclosure required by 

condition III below. Applicants state 

that the Board also adopted policies and 

procedures at that meeting that require 

UTG to keep records that demonstrate 

its compliance with all of the conditions 

of the requested order and that are 

necessary for UTG 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 

under the Act 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 ‘‘clean up’’ 

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) provides that the 

Commission may, by order upon 

application, conditionally or 

unconditionally exempt any person, 

security, or transaction, or any class or 

classes of persons, securities or 

transactions, from any provision of the 

Act, if and 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 underlying section 19(b) and 

rule 19b–1 is that shareholders might be 

unable to differentiate 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 a separate statement 

showing the sources of a distribution 

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

gains and/or return of capital) 

accompany any distributions (or the 

confirmation of the reinvestment of 

distributions) estimated to be sourced in 

part from capital gains or capital. 

Applicants state that the same 

information also is included in UTG’s 

annual reports to shareholders and on 

its IRS Form 1099–DIV, which is sent to 

each common and preferred shareholder 

who received distributions during a 

particular year (including shareholders 

who have sold shares during the year). 

4. Applicants further state that UTG 

will make the additional disclosures 

required by the conditions set forth 

below, and has adopted compliance 

policies and procedures in accordance 

with rule 38a–1 to ensure that all 

required 19(a) Notices and disclosures 

are sent to shareholders. Applicants 

argue that by providing the information 

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

1, and by complying with the 

procedures adopted under the Plan and 

the conditions listed below, UTG’s 

shareholders are provided sufficient 

information to understand that their 

periodic distributions are not tied to 

UTG’s net investment income (which 

for this purpose is UTG’s taxable 

income other than from capital gains) 

and realized capital gains to date, and 

may not represent yield or investment 

return. Applicants also state that 

compliance with UTG’s compliance 

procedures and condition III set forth 

below will ensure that prospective 

shareholders and third parties are 

provided with the same information. 

Accordingly, applicants assert that 

continuing to subject UTG 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 


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2Returns of capital as used in the application 

means return of capital for financial accounting 

purposes and not for tax accounting purposes. 

3Applicants state that a future Fund that relies on 

the requested order will satisfy each of the 

representations in the application except that such 

representations will be made in respect of actions 

by the board of directors or trustees of such future 

Fund and will be made at a future time. 

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 assert that the 

‘‘selling the dividend’’ concern should 

not apply to closed-end investment 

companies, such as UTG, that do not 

continuously distribute shares. 

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 endof-the-year distributions. 

6. Applicants also note that common 

shares of closed-end funds that invest 

primarily in equity securities often trade 

in the marketplace at a discount to the 

funds’ NAV. Applicants believe that this 

discount may be reduced for closed-end 

funds that pay relatively frequent 

dividends on their common shares at a 

consistent rate, whether or not those 

dividends contain an element of longterm capital gain. 

7. Applicants assert that the 

application of rule 19b–1 to the Plan 

actually could have an undesirable 

influence on portfolio management 

decisions. Applicants state that, in the 

absence of an exemption from rule 19b– 

1, the implementation of a periodic 

distribution plan imposes pressure on 

management (a) 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 (b) 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 thus 

assert that the limitation on the number 

of capital gain distributions that a fund 

may make with respect to any one year 

imposed by rule 19b–1, may prevent the 

efficient operation of a periodic 

distribution plan whenever that fund’s 

realized net long-term capital gains in 

any year exceed the total of the periodic 

distributions that may include such 

capital gains under the rule. 

8. Applicants also assert that rule 

19b–1 may cause fixed regular periodic 

distributions under a periodic 

distribution plan to be funded with 

returns of capital 2 (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 could 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 

thus assert that the requested order 

would minimize these effects of rule 

19b–1 by enabling UTG to realize longterm 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 has both common stock 

and preferred stock 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 such capital gain 

to be included in common and preferred 

stock 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 stock 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 stock issued by a 

closed-end fund. Applicants assert that 

such distributions are 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 such 

distributions that are comprised of the 

long-term capital gains. 

11. Applicants also submit that the 

‘‘selling the dividend’’ concern is not 

applicable to preferred stock, which 

entitles a holder to no more than a 

periodic dividend at a fixed rate or the 

rate determined by the market, and, like 

a debt security, is priced based upon its 

liquidation value, 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 do not expect the 

liquidation value of their shares to 

change. 

12. Applicants request an order under 

section 6(c) granting an exemption from 

section 19(b) and rule 19b–1 to permit 

UTG to make periodic long-term capital 

gains distributions (as defined in section 

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

monthly in any one taxable year in 

respect of its common shares and as 

often as specified by or determined in 

accordance with the terms thereof in 

respect of its preferred shares.3

Applicants’ Conditions: 

Applicants agree that any order of the 

Commission granting the requested 

relief will be subject to the following 

conditions: 

I. Compliance Review and Reporting 

Each 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 its Investment 

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 such 

conditions; and (b) review the adequacy 

of the policies and procedures adopted 

by the Board no less frequently than 

annually. 

II. 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: 

1. Will provide, in a tabular or 

graphical format: 

(a) The amount of the distribution, on 

a per share basis, together with the 

amounts of such distribution amount, 

on a per share basis and as a percentage 

of such 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; 


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4The disclosure in this condition II.A.2(b) will be 

included only if the current distribution or the 

fiscal year-to-date cumulative distributions are 

estimated to include a return of capital. 

(b) The fiscal year-to-date cumulative 

amount of distributions, on a per share 

basis, together with the amounts of such 

cumulative amount, on a per share basis 

and as a percentage of such 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; 

(c) 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 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 

(d) 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 

2. Will include the following 

disclosure: 

(a) ‘‘You should not draw any 

conclusions about the Fund’s 

investment performance from the 

amount of this distribution or from the 

terms of the Fund’s Plan’’; 

(b) ‘‘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 

(c) ‘‘The amounts and sources of 

distributions reported in this 19(a) 

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.’’ 

Such 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: 

1. Describe the terms of the Plan 

(including the fixed amount or fixed 

percentage of the distributions and the 

frequency of the distributions); 

2. Include the disclosure required by 

condition II.A.2(a) above; 

3. State, if applicable, that the Plan 

provides that the Board may amend or 

terminate the Plan at any time without 

prior notice to Fund shareholders; and 

4. Describe any reasonably foreseeable 

circumstances that might cause the 

Fund to terminate the Plan and any 

reasonably foreseeable consequences of 

such termination. 

C. Each report provided to 

shareholders under rule 30e–1 under 

the Act and in 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. 

III. Disclosure to Shareholders, 

Prospective Shareholders and Third 

Parties 

A. Each Fund will include the 

information contained in the relevant 

19(a) Notice, including the disclosure 

required by condition II.A.2 above, in 

any written communication (other than 

a communication on Form 1099) about 

the Plan or distributions under the Plan 

by the Fund, or agents that the Fund has 

authorized to make such 

communication on the Fund’s behalf, to 

any Fund common shareholder, 

prospective common shareholder or 

third-party information provider; 

B. Each 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 such 19(a) Notice, including the 

disclosure required by condition II.A.2 

above, as an exhibit to its next filed 

Form N–CSR; and 

C. Each Fund will post prominently a 

statement on its (or the Investment 

Adviser’s) web site containing the 

information in each 19(a) Notice, 

including the disclosure required by 

condition II.A.2 above, and will 

maintain such information on such web 

site for at least 24 months. 

IV. Delivery of 19(a) Notices to 

Beneficial Owners 

If a broker, dealer, bank or other 

person (‘‘financial intermediary’’) holds 

common stock issued by a 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 such 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 such beneficial owners. 

V. Additional Board Determinations for 

Funds Whose Shares Trade at a 

Premium 

If: 

A. A 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 such 12-week 

rolling period ending on the last trading 

day of each week); and 

B. the Fund’s annualized distribution 

rate for such 12-week rolling period, 

expressed as a percentage of NAV as of 

the ending date of such 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 such 

12-week rolling period; then: 

1. At the earlier of the next regularly 

scheduled meeting or within four 

months of the last day of such 12-week 

rolling period, the Board including a 

majority of the Independent Trustees: 

(a) Will request and evaluate, and the 

Investment Adviser will furnish, such 


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5 If the Fund has been in operation fewer than six 

months, the measured period will being 

immediately following the Fund’s first public 

offering. 

6 If the Fund has been in operation fewer than five 

years, the measured period will being immediately 

following the Fund’s first public offering. 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

information as may be reasonably 

necessary to make an informed 

determination of whether the Plan 

should be continued or continued after 

amendment; 

(b) Will determine whether 

continuation, or continuation after 

amendment, of the Plan is consistent 

with the Fund’s investment objective(s) 

and policies and in the best interests of 

the Fund and its shareholders, after 

considering the information in 

condition V.B.1(a) above; including, 

without limitation: 

(1) Whether the Plan is accomplishing 

its purpose(s); 

(2) The reasonably foreseeable 

material effects of the Plan on the 

Fund’s long-term total return in relation 

to the market price and NAV of the 

Fund’s common shares; and 

(3) The Fund’s current distribution 

rate, as described in condition V.B 

above, compared with the Fund’s 

average annual taxable income or total 

return over the 2-year period, as 

described in condition V.B, or such 

longer period as the Board deems 

appropriate; and 

(c) Based upon that determination, 

will approve or disapprove the 

continuation, or continuation after 

amendment, of the Plan; and 

2. The Board will record the 

information considered by it, including 

its consideration of the factors listed in 

condition V.B.1(b) above, and the basis 

for its approval or disapproval of the 

continuation, or continuation after 

amendment, of the Plan in its meeting 

minutes, which must be made and 

preserved for a period of not less than 

six years from the date of such meeting, 

the first two years in an easily accessible 

place. 

VI. Public Offerings 

A 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 VI.A and VI.B 

above, provided that, with respect to 

such other offering: 

1. 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 per share as of such 

date, is no more than 1 percentage point 

greater than the Fund’s average annual 

total return for the 5-year period ending 

on such date; 6 and 

2. The transmittal letter 

accompanying any registration 

statement filed with the Commission in 

connection with such 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 

stock as frequently as twelve times each 

year, and as frequently as distributions 

are specified in accordance with the 

terms of any outstanding preferred stock 

as such Fund may issue. 

VII. Amendments to Rule 19b–1 

The requested relief 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 stock as frequently as twelve 

times each year. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–17140 Filed 7–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold an Open Meeting 

on Wednesday, July 22, 2009 at 2 p.m., 

in the Auditorium, Room L–002. 

The subject matter of the Open 

Meeting will be: 

The Commission will consider 

whether to propose a rule to address 

‘‘pay to play’’ practices by investment 

advisers. The proposal is designed, 

among other things, to prohibit advisers 

from seeking to influence the award of 

advisory contracts by public entities 

through political contributions to or for 

those officials who are in a position to 

influence the awards. 

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: July 15, 2009. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–17234 Filed 7–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60295; File No. SR–CBOE– 

2009–049] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Market-Maker 

Guidelines 

July 13, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 9, 

2009, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

Rule 8.7, Obligations of Market-Makers, 

to: (i) Eliminate the provision providing 

for bids (offers) to be no more than $1 

lower (higher) than the last preceding 

transaction plus or minus the aggregate 

change in the last sale price of the 

underlying, and (ii) amend the 

provision pertaining to trades that are 

more than $0.25 below parity. The text 

of the proposed rule change is available 

on the Exchange’s Web site (http:// 

www.cboe.org/Legal), at the Exchange’s 

Office of the Secretary and at the 

Commission. 


erowe on DSK5CLS3C1PROD with NOTICES