44474 Federal Register / Vol. 82, No. 183 / Friday, September 22, 2017 / Notices 

5Notice, 82 FR at 30931. 

6 Id. at 30931–32. 

7 15 U.S.C. 78s(b)(2)(C). 

8 15 U.S.C. 78q–1(b)(3)(F). 

9 15 U.S.C. 78q–1. 

10Notice, 82 FR at 30932. 

11 15 U.S.C. 78q–1(b)(3)(F). 

12 15 U.S.C. 78q–1. 

13 15 U.S.C. 78s(b)(2). 

14 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

15 17 CFR 200.30–3(a)(12). 

terms consistent with the other EM 

Contracts approved for clearing at ICC 

and governed by Subchapter 26D of the 

Rules.5 ICC has also represented that 

clearing of the additional EM Contracts 

will not require any changes to ICC’s 

Risk Management Framework or other 

policies and procedures constituting 

rules within the meaning of the Act.6

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if the Commission finds 

that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to such selfregulatory organization.7 Section 

17A(b)(3)(F) of the Act 8 requires that, 

among other things, that the rules of a 

clearing agency be designed to promote 

the prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and transactions, 

to assure the safeguarding of securities 

and funds which are in the custody or 

control of the clearing agency or for 

which it is responsible and, in general, 

to protect investors and the public 

interest. 

The Commission finds that the rule 

change is consistent with the 

requirements of Section 17A of the Act 9

and the rules and regulations 

thereunder applicable to ICC. The 

Commission has reviewed the terms and 

conditions of these contracts and has 

determined that they are substantially 

similar to the other contracts listed in 

Subchapter 26D of the ICC Rules, all of 

which ICC currently clears, the key 

difference being that the underlying 

reference obligations will be issuances 

by the Kingdom of Saudi Arabia and the 

Republic of Kazakhstan, the new 

Eligible SES Reference Entities. 

Moreover, the Commission has 

reviewed the Notice and ICC’s Rules, 

policies and procedures, which provide 

that the additional EM Contracts will be 

cleared pursuant to ICC’s existing 

clearing arrangements and related 

financial safeguards, protections and 

risk management procedures.10 In 

addition, the Commission has evaluated 

information submitted by ICC, including 

data on volume, open interest, and the 

number of ICC clearing participants 

(‘‘CPs’’) that currently trade in the 

additional EM Contracts as well as 

certain model parameters for the 

additional EM Contracts. Based on this 

review, the Commission finds that ICC’s 

rules, policies, and procedures are 

reasonably designed to price and 

measure the potential risk presented by 

these products; collect financial 

resources in proportion to such risk; and 

liquidate these products in the event of 

a CP default. Thus, the Commission 

finds that acceptance of the additional 

EM Contracts, on the terms and 

conditions set out in ICC’s Rules, is 

consistent with the prompt and accurate 

clearance of and settlement of securities 

transactions and derivative agreements, 

contracts and transactions cleared by 

ICC, the safeguarding of securities and 

funds in the custody or control of ICC, 

and the protection of investors and the 

public interest, within the meaning of 

Section 17A(b)(3)(F) of the Act.11

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the 

Act 12 and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (File No. SR–ICC– 

2017–008) be, and hereby is, 

approved.14

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–20203 Filed 9–21–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32821; File No. 812–14741] 

AQR Funds, et al. 

September 18, 2017. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

pursuant to: (a) Section 6(c) of the 

Investment Company Act of 1940 

(‘‘Act’’) granting an exemption from 

sections 18(f) and 21(b) of the Act; (b) 

section 12(d)(1)(J) of the Act granting an 

exemption from section 12(d)(1) of the 

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

Act granting an exemption from sections 

17(a)(1), 17(a)(2) and 17(a)(3) of the Act; 

and (d) section 17(d) of the Act and rule 

17d–1 under the Act to permit certain 

joint arrangements and transactions. 

Applicants request an order that would 

permit certain registered open-end 

management investment companies to 

participate in a joint lending and 

borrowing facility. 

Applicants: AQR Funds (the ‘‘Trust’’), 

registered under the Act as an open-end 

management investment company, and 

AQR Capital Management, LLC 

(‘‘AQR’’), registered as an investment 

adviser under the Investment Advisers 

Act of 1940. 

Filing Dates: The application was 

filed on February 2, 2017 and amended 

on July 6, 2017. 

Hearing or Notification of Hearing: An 

order granting the requested relief 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 October 13, 2017 and 

should be accompanied by proof of 

service on the 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: AQR Capital Management, 

LLC, Two Greenwich Plaza, 4th Floor, 

Greenwich, CT 06830. 

FOR FURTHER INFORMATION CONTACT: 

James Maclean, Senior Counsel, at (202) 

551–7794, or Robert Shapiro, Branch 

Chief, at (202) 551–7758 (Division of 

Investment Management, Chief 

Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or an applicant using the 

Company name box, at http://

Federal Register / Vol. 82, No. 183 / Friday, September 22, 2017 / Notices 44475 

1Applicants request that the order apply to the 

applicants and to any existing or future series of the 

Trust and any existing or future registered open-end 

management investment company or series thereof 

(each a ‘‘Fund’’) for which AQR, or an entity 

controlling, controlled by, or under common 

control with AQR or any successor thereto serves 

as investment adviser (with AQR, each an 

‘‘Adviser’’). For purposes of the requested order, 

‘‘successor’’ is limited to any entity that results 

from a reorganization into another jurisdiction or a 

change in the type of a business organization. 

Although the applicants do not currently operate 

any money market funds, applicants request that 

the order also apply to any future Fund that is a 

money market fund that complies with rule 2a–7 of 

the Act (each a ‘‘Money Market Fund’’). Money 

Market Funds will not participate as borrowers 

under the interfund lending facility because such 

funds rarely need to borrow cash to meet 

redemptions. 

2Any Fund, however, will be able to call a loan 

on one business day’s notice. 

3Under certain circumstances, a borrowing Fund 

will be required to pledge collateral to secure the 

loan. 4Applicants state that the obligation to repay an 

interfund loan could be deemed to constitute a 

security for the purposes of sections 17(a)(1) and 

12(d)(1) of the Act. 

5Applicants state that any pledge of securities to 

secure an interfund loan could constitute a 

purchase of securities for purposes of section 

17(a)(2) of the Act. 

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

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order that 

would permit the applicants to 

participate in an interfund lending 

facility where each Fund could lend 

money directly to and borrow money 

directly from other Funds to cover 

unanticipated cash shortfalls, such as 

unanticipated redemptions or trade 

fails.1 The Funds will not borrow under 

the facility for leverage purposes and 

the loans’ duration will be no more than 

7 days.2

2. Applicants anticipate that the 

proposed facility would provide a 

borrowing Fund with a source of 

liquidity at a rate lower than the bank 

borrowing rate at times when the cash 

position of the Fund is insufficient to 

meet temporary cash requirements. In 

addition, Funds making short-term cash 

loans directly to other Funds would 

earn interest at a rate higher than they 

otherwise could obtain from investing 

their cash in U.S. Treasury bills or 

certain other short-term money market 

instruments. Thus, applicants assert that 

the facility would benefit both 

borrowing and lending Funds. 

3. Applicants agree that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the application. Among others, 

an Adviser, through a designated 

committee, would administer the 

facility as a disinterested fiduciary as 

part of its duties under the investment 

management agreements with the Funds 

and would receive no additional fee as 

compensation for its services in 

connection with the administration of 

the facility. The facility would be 

subject to oversight and certain 

approvals by the Funds’ Board, 

including, among others, approval of the 

interest rate formula and of the method 

for allocating loans across Funds, as 

well as review of the process in place to 

evaluate the liquidity implications for 

the Funds. A Fund’s aggregate 

outstanding interfund loans will not 

exceed 15% of its net assets, and the 

Fund’s loans to any one Fund will not 

exceed 5% of the lending Fund’s net 

assets.3

4. Applicants assert that the facility 

does not raise the concerns underlying 

section 12(d)(1) of the Act given that the 

Funds are part of the same group of 

investment companies and there will be 

no duplicative costs or fees to the 

Funds.4 Applicants also assert that the 

proposed transactions do not raise the 

concerns underlying sections 17(a)(1), 

17(a)(3), 17(d) and 21(b) of the Act as 

the Funds would not engage in lending 

transactions that unfairly benefit 

insiders or are detrimental to the Funds. 

Applicants state that the facility will 

offer both reduced borrowing costs and 

enhanced returns on loaned funds to all 

participating Funds and each Fund 

would have an equal opportunity to 

borrow and lend on equal terms based 

on an interest rate formula that is 

objective and verifiable. With respect to 

the relief from section 17(a)(2) of the 

Act, applicants note that any collateral 

pledged to secure an interfund loan 

would be subject to the same conditions 

imposed by any other lender to a Fund 

that imposes conditions on the quality 

of or access to collateral for a borrowing 

(if the lender is another Fund) or the 

same or better conditions (in any other 

circumstance).5

5. Applicants also believe that the 

limited relief from section 18(f)(1) of the 

Act that is necessary to implement the 

facility (because the lending Funds are 

not banks) is appropriate in light of the 

conditions and safeguards described in 

the application and because the Funds 

would remain subject to the 

requirement of section 18(f)(1) that all 

borrowings of a Fund, including 

combined interfund loans and bank 

borrowings, have at least 300% asset 

coverage. 

6. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. 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. 

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. 

Rule 17d–1(b) under the Act provides 

that in passing upon an application filed 

under the rule, the Commission will 

consider whether the participation of 

the registered investment company in a 

joint enterprise, joint arrangement or 

profit sharing plan on the basis 

proposed is consistent with the 

provisions, policies and purposes of the 

Act and the extent to which such 

participation is on a basis different from 

or less advantageous than that of the 

other participants. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–20177 Filed 9–21–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–558, OMB Control No. 

3235–0617] 

Submission for OMB Review; 

Comment Request 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

Washington, DC 20549–2736 

Extension: 

Rule 433 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget this 

request for extension of the previously 

approved collection of information 

discussed below.