46116 Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Notices 

1Applicants request that the order apply to the 

initial fund and any additional series of the Trust, 

and any other existing or future open-end 

management investment company or existing or 

future series thereof (each, included in the term 

‘‘Fund’’), each of which will operate as an ETF, and 

their respective existing or future master funds, and 

will track a specified index comprised of domestic 

and/or foreign equity securities and/or domestic 

and/or foreign fixed income securities (each, an 

‘‘Underlying Index’’). Any Fund will (a) be advised 

by the Initial Adviser or an entity controlling, 

controlled by, or under common control with the 

Initial Adviser (each, an ‘‘Adviser’’) and (b) comply 

with the terms and conditions of the application. 

there are 10 credit rating agencies 

registered as NRSROs with the 

Commission. Based on staff experience 

and comments received during the 60- 

day comment period soliciting 

comments on this collection of 

information, the Commission estimates 

that the revised ongoing annual burden 

for respondents to comply with Rule 

17g–1 and Form NRSRO is 2,750 hours. 

In addition, the Commission estimates 

an industry-wide annual external cost to 

NRSROs of $4,000 to comply with the 

requirements. 

The Commission may not conduct or 

sponsor a collection of information 

unless it displays a currently valid OMB 

control number. No person shall be 

subject to any penalty for failing to 

comply with a collection of information 

subject to the PRA that does not display 

a valid OMB control number. 

Background documentation for this 

information collection may be viewed at 

the following Web site: 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

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

Dyson, Director/Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

100 F St NE., Washington, DC 20549 or 

send an email to: PRA_Mailbox@

sec.gov. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: September 27, 2017. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21193 Filed 10–2–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32836; 812–14681] 

Wells Fargo Exchange-Traded Funds 

Trust, et al. 

September 27, 2017. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

under section 6(c) of the Investment 

Company Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. The requested order would 

permit (a) index-based series of certain 

open-end management investment 

companies (‘‘Funds’’) to issue shares 

redeemable in large aggregations 

(‘‘Creation Units’’); (b) secondary market 

transactions in Fund shares to occur at 

negotiated market prices rather than at 

net asset value (‘‘NAV’’); (c) certain 

Funds to pay redemption proceeds, 

under certain circumstances, more than 

seven days after the tender of shares for 

redemption; (d) certain affiliated 

persons of a Fund to deposit securities 

into, and receive securities from, the 

Fund in connection with the purchase 

and redemption of Creation Units; (e) 

certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

Funds (‘‘Funds of Funds’’) to acquire 

shares of the Funds; (f) certain Funds 

(‘‘Feeder Funds’’) to create and redeem 

Creation Units in-kind in a masterfeeder structure; and (g) certain Funds 

to issue Shares in less than Creation 

Unit size to investors participating in a 

distribution reinvestment program. 

Applicants: Wells Fargo ExchangeTraded Funds Trust (the ‘‘Trust’’), a 

Delaware statutory trust, which will 

register under the Act as an open-end 

management investment company with 

multiple series, Wells Fargo Funds 

Management, LLC (the ‘‘Initial 

Adviser’’), a Delaware limited liability 

company registered as an investment 

adviser under the Investment Advisers 

Act of 1940, and Wells Fargo Funds 

Distributor, LLC (the ‘‘Initial 

Distributor’’), a Delaware limited 

liability company (together with any 

future distributor, the ‘‘Distributor’’). 

Filing Dates: The application was 

filed on August 5, 2016, and amended 

on December 2, 2016, April 19, 2017, 

and September 15, 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 23, 2017, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit, or for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090; 

Applicants: Devin F. Sullivan, Esq., 

Wells Fargo Funds Management, LLC, 

45 Fremont Street, 26th Floor, San 

Francisco, CA 94105. 

FOR FURTHER INFORMATION CONTACT: 

Laura L. Solomon, Senior Counsel, at 

(202) 551–6915, or Daniele Marchesani, 

Assistant Chief Counsel at (202) 551– 

6821 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

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

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order that 

would allow Funds to operate as indexbased exchange traded funds (‘‘ETFs’’).1

Fund shares will be purchased and 

redeemed at their NAV in Creation 

Units (other than pursuant to a 

distribution reinvestment program), as 

described in the application. All orders 

to purchase Creation Units and all 

redemption requests will be placed by 

or through an ‘‘Authorized Participant’’, 

which will have signed a participant 

agreement with the Distributor. Shares 

will be listed and traded individually on 

a national securities exchange, where 

share prices will be based on the current 

bid/offer market. Certain Funds may 

operate as Feeder Funds in a masterfeeder structure. Any order granting the 

requested relief would be subject to the 

terms and conditions stated in the 

application. 

2. Each Fund will hold investment 

positions selected to correspond closely 

to the performance of an Underlying 

Index. In the case of Self-Indexing 


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Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Notices 46117 

2Each Self-Indexing Fund will post on its Web 

site the identities and quantities of the investment 

positions that will form the basis for the Fund’s 

calculation of its NAV at the end of the day. 

Applicants believe that requiring Self-Indexing 

Funds to maintain full portfolio transparency will 

help address, together with other protections, 

conflicts of interest with respect to such Funds. 

3The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants, 

moreover, are not seeking relief from section 17(a) 

for, and the requested relief will not apply to, 

transactions where a Fund could be deemed an 

Affiliated Person, or a Second-Tier Affiliate, of a 

Fund of Funds because an Adviser or an entity 

controlling, controlled by or under common control 

with an Adviser provides investment advisory 

services to that Fund of Funds. 

Funds, an affiliated person, as defined 

in section 2(a)(3) of the Act (‘‘Affiliated 

Person’’), or an affiliated person of an 

Affiliated Person (‘‘Second-Tier 

Affiliate’’), of the Trust or a Fund, of the 

Adviser, of any sub-adviser to or 

promoter of a Fund, or of the Distributor 

will compile, create, sponsor or 

maintain the Underlying Index.2

3. Shares will be purchased and 

redeemed in Creation Units and 

generally on an in-kind basis, or issued 

in less than Creation Unit size to 

investors participating in a distribution 

reinvestment program. Except where the 

purchase or redemption will include 

cash under the limited circumstances 

specified in the application, purchasers 

will be required to purchase Creation 

Units by depositing specified 

instruments (‘‘Deposit Instruments’’), 

and shareholders redeeming their shares 

will receive specified instruments 

(‘‘Redemption Instruments’’). The 

Deposit Instruments and the 

Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) except as specified in the 

application. 

4. Because shares will not be 

individually redeemable, applicants 

request an exemption from Section 

5(a)(1) and Section 2(a)(32) of the Act 

that would permit the Funds to register 

as open-end management investment 

companies and issue shares that are 

redeemable in Creation Units (other 

than pursuant to a dividend 

reinvestment program). 

5. Applicants also request an 

exemption from section 22(d) of the Act 

and rule 22c–1 under the Act as 

secondary market trading in shares will 

take place at negotiated prices, not at a 

current offering price described in a 

Fund’s prospectus, and not at a price 

based on NAV. Applicants state that (a) 

secondary market trading in shares does 

not involve a Fund as a party and will 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that effect 

creations and redemptions of Creation 

Units in kind and that are based on 

certain Underlying Indexes that include 

foreign securities, applicants request 

relief from the requirement imposed by 

section 22(e) in order to allow such 

Funds to pay redemption proceeds 

within fifteen calendar days following 

the tender of Creation Units for 

redemption. Applicants assert that the 

requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

12(d)(1)(A) of the Act; and the Funds, 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

in sections 12(d)(1)(A) and (B) of the 

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit persons that are Affiliated 

Persons, or Second Tier-Affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instrument 

and Redemption Instruments will be 

valued in the same manner as those 

investment positions currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.3

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Applicants also request relief to 

permit a Feeder Fund to acquire shares 

of another registered investment 

company having substantially the same 

investment objectives as the Feeder 

Fund (‘‘Master Fund’’) beyond the 

limitations in section 12(d)(1)(A) and 

permit the Master Fund, and any 

principal underwriter for the Master 

Fund, to sell shares of the Master Fund 

to the Feeder Fund beyond the 

limitations in section 12(d)(1)(B). 

10. 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. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21131 Filed 10–2–17; 8:45 am] 

BILLING CODE 8011–01–P 


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