[Federal Register Volume 82, Number 195 (Wednesday, October 11, 2017)]
[Notices]
[Pages 47257-47262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21775]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32849; 812-14248]


OppenheimerFunds, Inc., et al.

October 4, 2017.
AGENCY: Securities and Exchange Commission (``Commission'')

ACTION: Notice.

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    Notice of application for an order under sections 6(c) and 17(b) of 
the

[[Page 47258]]

Investment Company Act of 1940 (``Act'') for exemptions from section 
17(a) of the Act, and under section 17(d) of the Act and rule 17d-1 
thereunder to permit certain joint transactions.

Summary of Application:  Applicants requests an order to permit certain 
registered open-end management investment companies or series thereof 
to invest in a private investment vehicle established by their 
investment advisers for the purpose of investing in China A Shares and 
certain other Chinese securities.

Applicants:  OppenheimerFunds, Inc. (``OFI''), OFI Global Asset 
Management, Inc. (``OFI Global''), and OFI Global Institutional, Inc. 
(``OFI Global Institutional,'' and together with OFI and OFI Global, 
the ``Initial Advisers''); OFI Global China Fund, LLC (the ``OFI Global 
China Fund''); and Oppenheimer Developing Markets Fund, Oppenheimer 
Global Fund, Oppenheimer Global Opportunities Fund, Oppenheimer Global 
Value Fund, Oppenheimer International Growth Fund, Oppenheimer 
International Small-Mid Company Fund and Oppenheimer International 
Equity Fund (together, the ``Trusts'').

Filing Dates:  The application was filed on December 12, 2013, and 
amended on June 6, 2014, November 21, 2014, May 1, 2015, October 16, 
2015, April 7, 2016, August 9, 2016, May 12, 2017, August 29, 2017, and 
September 26, 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 30, 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, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090. Applicants: 225 Liberty Street, 
New York, NY 10281.

FOR FURTHER INFORMATION CONTACT:  Kieran G. Brown, Senior Counsel, at 
(202) 551-6773, or Robert H. Shapiro, Branch Chief, 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 an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. Each Trust is a Delaware statutory trust and is registered under 
Act as an open-end management investment company. One Trust, the 
Oppenheimer Developing Markets Fund (the ``Initial Fund''), currently 
invests in the OFI Global China Fund, LLC (the ``OFI Global China 
Fund''), which relies on the exemptions from registration under the Act 
provided by section 3(c)(1) and/or 3(c)(7) of the Act.\1\
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    \1\ Each entity that currently intends to rely on the requested 
relief has been named as an applicant. Any Trusts and their existing 
or future series and any other existing or future registered open-
end management investment company or series thereof for which an 
Initial Adviser, or an Initial Adviser's successor, or any person 
controlling, controlled by, or under common control with an Initial 
Adviser (an ``OFI Affiliate'') acts as investment adviser (such 
Initial Adviser or OFI Affiliate acting as investment adviser, an 
``Adviser'') that may rely on the requested relief in the future is 
a ``Future Fund'' (together with the Initial Fund, the ``Funds''). 
For purposes of the requested order, ``successor'' is limited to an 
entity that results from a reorganization into another jurisdiction 
or a change in the type of business organization. Each Fund or other 
entity that may rely on the requested relief in the future will do 
so only in accordance with the terms and conditions of the requested 
order.
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    2. Each Adviser is registered as an investment adviser under the 
Investment Advisers Act of 1940 (``Advisers Act''), and OFI Global and 
OFI Global Institutional are each a wholly-owned subsidiary of OFI. OFI 
Global serves as investment adviser to the Initial Fund pursuant to an 
investment advisory agreement between OFI Global and the Initial Fund 
(the ``Advisory Agreement''). OFI serves as sub-adviser to the Initial 
Fund pursuant to a subadvisory agreement between OFI Global and OFI. As 
the Initial Fund's investment adviser and sub-adviser, OFI Global and 
OFI are responsible for making investment decisions for the Initial 
Fund and for administering the business and affairs of the Initial 
Fund. OFI Global is entitled, under the terms of the Advisory 
Agreement, to receive management fees from the Initial Fund at a 
specified rate. OFI Global also serves as the investment adviser to the 
other Trusts and their series and has entered into subadvisory 
agreements with OFI whereby OFI also provides investment advisory 
services to the other Trusts and their series. As investment adviser 
and sub-adviser, OFI Global and OFI's activities are subject to the 
oversight of the Boards of Trustees (the ``Board'' or ``Boards,'' as 
applicable) of the Trusts, at least a majority of whose members are not 
considered ``interested persons'' of the Trusts (as defined in section 
2(a)(19) of the Act) (the ``Independent Trustees'').
    3. OFI and the other Advisers also manage or may manage collective 
investment trusts, private pooled investment vehicles and investment 
companies registered in other jurisdictions (together, ``Other 
Vehicles''), as well as separately managed accounts (together with the 
Other Vehicles, ``Other Accounts'').\2\ Applicants state that these 
Other Accounts may have similar investment objectives and strategies as 
the Funds and will invest in OFI Global China Fund Series (defined 
below) along with one or more Funds.
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    \2\ The Applicants acknowledge that they are not seeking nor 
receiving relief with respect to the separately managed accounts.
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    4. The Funds desire to purchase and redeem limited liability 
company interests (``Interests'') of separately identified series of 
the OFI Global China Fund (each separate series of the OFI Global China 
Fund, an ``OFI Global China Fund Series''). The OFI Global China Fund 
Series invests in class A Shares listed on People's Republic of China 
(``PRC'') stock exchanges, rights to invest in such class A Shares, 
corporate or government bonds listed on PRC stock exchanges or traded 
in the over-the-counter markets of the PRC and warrants listed on PRC 
stock exchanges (together, ``Chinese Securities'').\3\ Notwithstanding 
the foregoing, a security will only be a ``Chinese Security'' if it is 
subject to the quota systems described in the application (as such 
quota systems may be amended or altered from time to time). Interests 
in the OFI Global China Fund will be sold only to the Funds and the 
Other Accounts.
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    \3\ Applicants represent that the OFI Global China Fund will not 
invest in derivatives or in other pooled investment vehicles.
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    5. Applicants assert that, for a variety of reasons, it is not 
practical or economical for the Funds to invest a significant amount of 
assets directly in Chinese Securities. Applicants state that, until 
2002, the Chinese government restricted investment in China A Shares 
and other Chinese Securities to domestic (i.e., Chinese)

[[Page 47259]]

investors.\4\ According to Applicants, since 2002, the Chinese 
Government has permitted certain non-Chinese investors to invest in 
China A Shares and gradually has liberalized applicable rules to permit 
non-Chinese investors to invest in other types of Chinese Securities. 
However, subject to limited exceptions described in the application, to 
do so, a foreign investor must receive a license from PRC regulators 
and be allotted a quota, representing the amount in renminbi of Chinese 
Securities that the investor may purchase. As described more fully in 
the application, individual applications on behalf of each Fund or 
Other Account would generally not be practical or feasible. 
Accordingly, OFI has obtained a license under the Qualified Foreign 
Institutional Investor (``QFII'') quota program, naming OFI Global 
China Fund as the investing vehicle in its application, and was granted 
a quota of US$200 million in late 2014, and has since obtained an 
additional $1.3 billion of quota, so that it can invest in Chinese 
Securities on behalf of the Funds and Other Accounts.
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    \4\ Applicants assert that, for a variety of reasons, China A 
Shares are a more attractive means to invest in Chinese companies 
than are other categories of stock that are available on the 
Shanghai, Shenzhen and Hong Kong Stock Exchanges (which is where a 
significant majority of publicly traded Chinese companies list their 
shares).
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    6. Applicants state that the OFI Global China Fund would allow the 
Funds, and Other Accounts, to gain dedicated exposure to Chinese 
Securities and provide numerous additional investment opportunities for 
the Funds that are consistent with their investment objectives and 
policies. Applicants state that each OFI Global China Fund Series will 
invest only in Chinese securities, cash and cash equivalents.
    7. The OFI Global China Fund is organized as a Delaware limited 
liability company. OFI serves as, and in the future an OFI Affiliate 
may serve as, the managing member of the OFI Global China Fund. The OFI 
Global China Fund does not have a board of directors or trustees. A 
Fund or Other Account may invest in some or all of the different OFI 
Global China Fund Series.\5\ Each OFI Global China Fund Series will 
have its own portfolio manager or portfolio management team at OFI who 
will be responsible for selecting particular Chinese Securities for 
investment by that OFI Global China Fund Series. Each Fund or Other 
Account investing in an OFI Global China Fund Series will hold 
Interests which will represent a proportionate share of the OFI Global 
China Fund Series' net assets and a proportionate claim on the OFI 
Global China Fund Series' net income. Interests in an OFI Global China 
Fund Series used by the Funds will be valued daily in accordance with 
the Funds' valuation procedures as approved by the Funds' Boards and in 
accordance with section 2(a)(41) of the Act. Each Interest would have 
the same rights as any other Interest, and the OFI Global China Fund 
Series would not issue preferred interests.
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    \5\ Applicants state that one OFI Global China Fund Series is 
contemplated, but in the future additional OFI Global China Fund 
Series may be established to invest in different issuers, or types, 
of Chinese Securities based generally on the particular 
characteristics of those issuers, or types, of Chinese Securities.
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    8. OFI will not charge advisory fees to OFI Global China Fund 
Series used by the Funds. OFI Global and the other Advisers will, 
however, be entitled to receive applicable advisory fees from the Funds 
or Other Accounts. Expenses of the OFI Global China Fund Series will be 
charged to the OFI Global China Fund Series as a whole and accrue on a 
daily basis.\6\ The OFI Global China Fund's books and those of the OFI 
Global China Fund Series will be accounted for under standard 
accounting principles and in accordance with U.S. Generally Accepted 
Accounting Principles (``GAAP''), and they will be audited annually by 
a nationally recognized and PCAOB-registered audit firm in accordance 
with U.S. Generally Accepted Auditing Standards (``GAAS'').\7\ The OFI 
Global China Fund Series in which a Fund invests will not borrow or 
engage in leverage.
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    \6\ Expenses of the OFI Global China Fund Series will include 
basic fees and expenses of service providers, such as the 
administrator, transfer agent, accountant, local custodian and legal 
counsel. OFI will engage an OFI Affiliate as its transfer agent. No 
fees will be paid by the OFI Global China Fund to a transfer agent 
that is an OFI Affiliate except in accordance with condition 3.
    \7\ Applicants state that the GAAS standards applicable to the 
audit of the OFI Global China Fund would be the same standards as 
those applicable to a registered investment company. Further, 
applicants state that GAAP would apply to both the OFI Global China 
Fund audit and a registered investment company audit. Thus, 
applicants assert that critical accounting policies governing 
security valuation, accounting for investment transactions, 
recognition of investment income and of expenses, and accrual of 
expenses, which are often the critical policies applicable to 
investment companies, would apply in substantially the same manner 
for the audit of the OFI Global China Fund.
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    9. A Fund's decision to invest in an OFI Global China Fund Series 
will be made by a Fund's portfolio manager(s). Because the PRC 
restricts repatriation of the proceeds from sales of Chinese 
Securities, each Fund will treat its entire investment in the OFI 
Global China Fund as an investment that is not liquid for purposes of 
any applicable rules or guidance of the Commission or its staff 
regarding the management of liquidity and will otherwise be subject to 
the limits described in condition 4. Applicants state that access by 
the Funds and Other Accounts to the quota (i.e., to Chinese Securities) 
through the OFI Global China Fund Series is a limited opportunity and 
will be allocated in accordance with the Advisers' trade order 
aggregation and trade allocation policies and procedures (the 
``Advisers' Trade Allocation Policy''). Under the Advisers' Trade 
Allocation Policy, if fewer Interests are available than requested by 
the portfolio managers of the Funds and Other Accounts, Interests will 
generally be allocated across participating accounts on a pro rata 
basis according to requested order size. Similarly, if more than one 
Fund or Other Account seeks to repatriate proceeds at or about the same 
time, and Chinese regulations limit the aggregate amount of proceeds 
that may be repatriated at any given time to a level below the 
aggregate amount sought to be repatriated, the requests by the 
applicable portfolio manager(s) will be aggregated, if received at or 
about the same time, and proceeds available for repatriation will be 
allocated pro rata among requesting Funds and Other Accounts.\8\ The 
Advisers will not consider the potential impact on the quota when 
making investment decisions for the Funds or Other Accounts.\9\
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    \8\ Applicants are not seeking comfort nor is the Commission 
providing any opinion on whether the Advisers' Trade Allocation 
Policy meets the standards applicable under the Act or the Advisers 
Act.
    \9\ Applicants state that the Chinese authorities may reduce or 
revoke a QFII's quota if the QFII does not invest the full amount of 
its quota over a phase-in period, or if it repatriates its 
investments below the quota amount.
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    10. Applicants state that OFI contemplates making a nominal (i.e., 
not to exceed $1,000) investment in the OFI Global China Fund. OFI will 
acquire Interests in the OFI Global China Fund (or series thereof) 
having rights, duties and obligations that are identical in all 
respects to Interests purchased by other investors in the OFI Global 
China Fund (or series thereof). The sole purpose of the proposed 
investment is to permit OFI to serve as the tax matters partner of the 
OFI Global China Fund, which intends to be treated as a partnership for 
U.S. federal tax purposes. Applicants state that in the absence of 
OFI's investment, it is likely that the U.S. Internal Revenue Service 
would appoint a non-managing member

[[Page 47260]]

partner of the OFI Global China Fund to serve as tax matters partner in 
an audit proceeding. In addition, absent such an investment by the OFI 
Global China Fund's managing member, the tax matters partner could 
change from year-to-year, which may disrupt preparation of the OFI 
Global China Fund's annual tax return.

Applicants' Legal Analysis

Section 17(a)--Purchase and Sale of Interests

    1. Section 17(a) generally provides, in part, that it is unlawful 
for any affiliated person of a registered investment company (``first-
tier affiliate''), or any affiliated person of such person (``second 
tier affiliate''), acting as principal, to sell or purchase any 
security or other property to or from such investment 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 the 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. Section 2(a)(9) defines 
``control'' to mean ``the power to exercise a controlling influence 
over the management or policies of a company, unless such power is 
solely the result of an official position with such company.''
    2. Applicants state that the Funds and the OFI Global China Fund 
are expected to be affiliated persons under section 2(a)(3) of the Act, 
because it is expected that one or more Funds and Other Vehicles will 
own at least 5%, and potentially, more than 25% of the Interests of the 
OFI Global China Fund or an OFI Global China Fund Series. While 
Interests of the OFI Global China Fund (and OFI Global China Fund 
Series) will be non-voting interests, a Fund or Other Vehicle could 
have power to exercise a controlling influence over the management or 
policies of the OFI Global China Fund or Series and be deemed an 
affiliated person of the OFI Global China Fund or OFI Global China Fund 
Series under section 2(a)(3)(C). In addition, OFI Global is the 
investment adviser to the Initial Fund, OFI serves as the initial sub-
adviser to the Initial Fund, and the Advisers will be investment 
advisers and sub-advisers to any Future Funds. An Adviser or OFI 
Affiliate will also be the managing member of the OFI Global China 
Fund. As a result, the OFI Global China Fund or OFI Global China Fund 
Series may be deemed to be under the Adviser's control under section 
2(a)(3)(C), such that the OFI Global China Fund may be deemed an 
affiliated person of an affiliated person of the Funds.
    3. If a Fund and the OFI Global China Fund are deemed affiliates of 
each other, or even second-tier affiliates, the sale of Interests of 
the OFI Global China Fund to the Fund, and the redemption of such 
Interests by the Fund, would be prohibited under section 17(a) of the 
Act.
    4. Section 17(b) of the Act authorizes the Commission to grant an 
order permitting a transaction otherwise prohibited by section 17(a) if 
the terms of the proposed transaction, including the consideration to 
be paid or received, are fair and reasonable and do not involve 
overreaching on the part of any person concerned, and the proposed 
transaction is consistent with the policies of each registered 
investment company involved and with the general purposes of the Act. 
Section 6(c) of the Act permits the Commission to exempt any person or 
transactions from any provisions 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.
    5. Applicants submit that the proposed arrangement satisfies the 
standards for relief under sections 17(b) and 6(c) of the Act. For the 
reasons discussed below, Applicants submit that the terms of the 
arrangement, including the consideration to be paid, are fair and 
reasonable and do not involve overreaching on the part of any person 
concerned, and that the proposed transactions are consistent with the 
policy of each registered investment company concerned and with the 
general purposes of the Act. Applicants further submit that the Funds' 
participation in the OFI Global China Fund Series will be necessary or 
appropriate in the public interest and consistent with the protection 
of investors and the purposes fairly intended by the policies and 
provisions of the Act.
    6. Applicants state that each Fund and Other Account will be 
treated identically as a holder of Interest in the OFI Global China 
Fund Series, and each Fund and Other Account will purchase and sell 
Interests of an OFI Global China Fund Series on the same terms and on 
the same basis as each other Fund and Other Account that invests in 
that OFI Global China Fund Series. Applicants note that no Adviser or 
OFI Affiliate will receive a fee for advising any OFI Global China Fund 
Series used by a Fund. The Funds, as holders of Interests of the OFI 
Global China Fund, will not be subject to any sales load, redemption 
fee, distribution fee or service fee, except that the OFI Global China 
Fund will have the discretion to impose a redemption fee in accordance 
with applicable law or regulation for the purpose of offsetting 
brokerage, tax or other costs. If a redemption fee is charged, it will 
be charged only to the extent that such a fee may be charged by an 
open-end fund registered under the Act. Each series of the OFI Global 
China Fund will be audited. Moreover, administrative fees and transfer 
agent fees will be paid by the OFI Global China Fund Series used by the 
Funds to an Adviser or OFI Affiliate only upon the determination by 
each Fund's Board, including a majority of Independent Trustees, that 
the fees are (i) for services in addition to, rather than duplicative 
of, services rendered to the Funds directly and (ii) fair and 
reasonable in light of the usual and customary charges imposed by 
others for services of the same nature and quality. Applicants argue 
that the fees payable to the OFI Global China Fund's service providers 
will be for distinct services, and the costs of such fees will be 
outweighed by opportunity to invest in Chinese Securities.

Section 17(d)

    7. Section 17(d) of the Act and rule 17d-1 under the Act generally 
prohibit joint transactions involving registered investment companies 
and their affiliates unless the Commission has approved the 
transaction. In considering whether to approve a joint transaction 
under rule 17d-1, the Commission considers whether the proposed 
transaction is consistent with the provisions, policies, and purposes 
of the Act, and the extent to which the participation of the investment 
companies is on a basis different from or less advantageous than that 
of the other participants.
    8. Applicants state that the Funds (by purchasing Interests of the 
OFI Global China Fund), OFI (by managing the portfolio securities of 
the OFI Global China Fund and the Funds at the same time that the Funds 
are invested in Interests of the OFI Global China Fund and/or by 
providing a nominal tax matters partner investment in the OFI Global 
China Fund), and the OFI Global China Fund (by selling its Interests 
to, and redeeming its Interests from, the Funds), could be deemed to be

[[Page 47261]]

participants in a joint enterprise or arrangement within the meaning of 
section 17(d) and rule 17d-1.
    9. Applicants request an order pursuant to section 17(d) and rule 
17d-1 to permit the proposed transactions with the OFI Global China 
Fund. Applicants submit that the investment by the Funds in the OFI 
Global China Fund on the basis proposed is consistent with the 
provisions, policies and purposes of the Act, and that each Fund will 
invest in Interests of the OFI Global China Fund on the same basis as 
any other shareholder (i.e., the other Funds and Other Accounts). 
Applicants further state that the Advisers will take reasonable steps 
to make sure that allocations among the Funds and Other Accounts are 
fair and equitable. Allocations of Chinese Securities to different OFI 
Global China Fund Series, and allocations of opportunities to invest in 
the OFI Global China Fund Series, by Funds and Other Accounts, will be 
subject to the Advisers' Trade Allocation Policy, under the supervision 
of the Advisers' and the Funds' CCO, and compliance with the Advisers' 
Trade Allocation Policy will be overseen by the Funds' Boards.
    10. Applicants do not believe that OFI's nominal investment as tax 
matters partner in the OFI Global China Fund poses any potential 
conflict of interest not addressed by the conditions contained in the 
application. OFI will acquire Interests having rights, duties and 
obligations that are identical in all respects to Interests purchased 
by other investors in the OFI Global China Fund.

Section 17(a)--Cross Transactions

    11. Applicants propose that the Funds be permitted to continue to 
engage in certain purchase and sale cross transactions in securities 
(``Cross Transactions'') between a Fund seeking to implement a 
portfolio strategy and an Other Vehicle seeking to raise or invest 
cash. The Funds currently rely on rule 17a-7 to engage in such Cross 
Transactions; however, if a Fund and an Other Vehicle were deemed to be 
second-tier affiliates of each other by virtue of their ownership or 
control affiliations with the OFI Global China Fund or an OFI Global 
China Fund Series, the Funds may not be entitled to rely on rule 17a-7 
because they would no longer be affiliated solely for the reasons 
permitted by the rule.
    12. Applicants assert that the potential affiliations created by 
the OFI Global China Fund Series structure do not affect the other 
protections provided by the rule, including the integrity of the 
pricing mechanism employed, and oversight by each Fund's Board. 
Applicants represent that the Funds and Other Vehicles will comply with 
the requirements set forth in rule 17a-(7)(a) through (g). Applicants 
thus believe that Cross Transactions will be reasonable and fair, and 
will not involve overreaching, and will be consistent with the purposes 
of the Act and the investment policy of each Fund.

Applicants' Conditions

    Applicants agree that any order granting the requested relief shall 
be subject to the following conditions:
    1. The Funds' investments in Interests of the OFI Global China Fund 
will be undertaken only in accordance with the Funds' stated investment 
restrictions and will be consistent with their stated investment 
policies.
    2. The Advisers and their affiliated persons will receive no 
advisory fee from the OFI Global China Fund in connection with the 
Funds' investment in the OFI Global China Fund. The Advisers and their 
affiliated persons will receive no commissions, fees, or other 
compensation (except for transfer agent fees that are paid in 
accordance with condition 3 as described in the application) from a 
Fund or the OFI Global China Fund in connection with the purchase or 
redemption by the Funds of Interests in the OFI Global China Fund. 
Interests of the OFI Global China Fund will not be subject to a sales 
load, redemption fee, distribution fee or service fee, except that the 
OFI Global China Fund will have the discretion to impose a redemption 
fee in accordance with applicable law or regulation for the purpose of 
offsetting brokerage, tax or other costs. If a redemption fee is 
charged, it will be charged only to the extent that such a fee may be 
charged by an open-end fund registered under the Act.
    3. Administrative fees and transfer agent fees will be paid by the 
OFI Global China Fund Series used by the Funds to an Adviser, or OFI 
Affiliate, only upon a determination by each Fund's Board, including a 
majority of its Independent Trustees, that the fees are (i) for 
services in addition to, rather than duplicative of, services rendered 
to the Funds directly and (ii) fair and reasonable in light of the 
usual and customary charges imposed by others for services of the same 
nature and quality. If such determination is not made by a Fund's 
Board, the Fund's Adviser will reimburse to that Fund the amount of any 
administrative fee and transfer agent fee borne by that Fund as an 
investor in the OFI Global China Fund.
    4. Each Fund will treat its entire investment in the OFI Global 
China Fund as an investment that is not liquid for purposes of any 
applicable rules or guidance of the Commission or its staff regarding 
the management of liquidity. For example, under current guidelines, 
each Fund must limit its aggregate holdings of illiquid assets, which 
for purposes of the requested relief include any investments in the OFI 
Global China Fund, to 15% of its net assets. In addition, each Fund 
will, at all times, limit its holdings in the OFI Global China Fund to 
no more than 15% of its net assets.
    5. Each Fund's Board, including a majority of the Independent 
Trustees, will determine initially and no less frequently than annually 
that the Fund's investment in the OFI Global China Fund is, and 
continues to be, in the best interests of the Fund and the Fund's 
shareholders. As part of this determination, the Fund's Board will 
consider the custody arrangements for the OFI Global China Fund's 
foreign securities (under rule 17f-5) and the bonding arrangements in 
place for certain of the OFI Global China Fund's officers and employees 
(under rule 17g-1).
    6. The Advisers will make the accounts, books and other records of 
the OFI Global China Fund available for inspection by the Commission 
staff and, if requested, will furnish copies of those records to the 
Commission staff.
    7. The OFI Global China Fund will comply with the following 
sections of the Act as if the OFI Global China Fund were an open-end 
management investment company registered under the Act, except as 
noted: Section 9; section 12; section 13 (the Interests issued by OFI 
Global China Fund will be regarded as voting securities under section 
2(a) (42) of the Act for purposes of applying this condition and the 
offering memorandum utilized by the OFI Global China Fund to offer and 
sell Interests will be regarded as a registration statement for 
purposes of applying this condition); section 17(a) (except as 
described in the application); section 17(d) (except as described in 
the application); section 17(e); section 17(f); section 17(h), section 
18 (the Interests issued by the OFI Global China Fund will be regarded 
as voting securities under section 2(a)(42) of the Act for purposes of 
applying this condition); section 21; section 36; and sections 37-53. 
In addition, the OFI Global China Fund will comply with the rules under 
section 17(f) \10\ and section 17(g) of the

[[Page 47262]]

Act, and rule 22c-1 under the Act as if the OFI Global China Fund were 
an open-end management investment company registered under the Act. 
This condition 7 will apply only to OFI Global China Fund Series in 
which a Fund has invested; this condition 7 will not apply to OFI 
Global China Fund Series invested in exclusively by Other Accounts 
except insofar as necessary for the OFI Global China Fund Series 
invested in by a Fund to comply with this condition.
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    \10\ Applicants note that they will operate the OFI Global China 
Fund such that rule 17f-1, rule 17f-2, and rule 17f-3 will not be 
applicable to it.
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    OFI will adopt procedures designed to ensure that the OFI Global 
China Fund complies with the aforementioned sections of the Act and 
rules under the Act. OFI will periodically review and periodically 
update as appropriate such procedures and will maintain books and 
records describing such procedures, and maintain the records required 
by rules 31a-1(b)(1), 31a-1(b)(2)(ii) and 31a-1(b)(9) under the Act. 
All books and records required to be made pursuant to this condition 
will be maintained and preserved for a period of not less than six 
years from the end of the fiscal year in which any transaction 
occurred, the first two years in an easily accessible place, and will 
be subject to examination by the Commission and its staff.
    For purpose of implementing condition 7, any action that the above-
referenced statutory and regulatory provisions require to be taken by 
the directors, officers and/or employees of a registered investment 
company will be performed by OFI (or its successor) \11\ as the 
managing member of the OFI Global China Fund, except to the extent that 
the order requires the Funds' Boards to exercise oversight or take 
action with respect to the OFI Global China Fund as an extension of 
such Board's duties to the Funds.
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    \11\ See supra, footnote 1.
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    8. To engage in Cross Transactions, the Funds will comply with rule 
17a-7 under the Act in all respects other than the requirement that the 
parties to the transaction be affiliated persons (or affiliated persons 
of affiliated persons) of each other solely by reason of having a 
common investment adviser or investment advisers which are affiliated 
persons of each other, common officers, and/or common directors, solely 
because a Fund and Other Vehicle might become affiliated persons within 
the meaning of section 2(a)(3)(A), (B) or (C) of the Act because of 
their investments in the OFI Global China Fund.
    9. An OFI Global China Fund Series in which a Fund invests will not 
borrow or engage in leverage.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21775 Filed 10-10-17; 8:45 am]
 BILLING CODE 8011-01-P