Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 47257 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–81487 

(Aug. 25, 2017), 82 FR 41438 (Aug. 31, 2017) (SR– 

LCH SA–2017–006) (‘‘Notice’’). 

4 15 U.S.C. 78s(b)(2). 

5 17 CFR 200.30–3(a)(12). 

Rule 15c2–7 places disclosure 

requirements on broker-dealers who 

have correspondent relationships, or 

agreements identified in the rule, with 

other broker-dealers. Whenever any 

such broker-dealer enters a quotation for 

a security through an inter-dealer 

quotation system, Rule 15c2–7 requires 

the broker-dealer to disclose these 

relationships and agreements in the 

manner required by the rule. The interdealer quotation system must also be 

able to make these disclosures public in 

association with the quotation the 

broker-dealer is making. 

When rule 15c2–7 was adopted in 

1964, the information it requires was 

necessary for execution of the 

Commission’s mandate under the 

Securities Exchange Act of 1934 to 

prevent fraudulent, manipulative and 

deceptive acts by broker-dealers. In the 

absence of the information collection 

required under Rule 15c2–7, investors 

and broker-dealers would have been 

unable to accurately determine the 

market depth of, and demand for, 

securities in an inter-dealer quotation 

system. 

There are approximately 3,939 brokerdealers registered with the Commission. 

Any of these broker-dealers could be 

potential respondents for Rule 15c2–7, 

so the Commission is using that figure 

to represent the number of respondents. 

Rule 15c2–7 applies only to quotations 

entered into an inter-dealer quotation 

system, such as the OTC Bulletin Board 

(‘‘OTCBB’’), or OTC Link (formerly, 

‘‘Pink Sheets’’), operated by OTC 

Markets Group Inc. (‘‘OTC Link’’). 

According to representatives of both 

OTC Link and the OTCBB, neither 

entity has recently received, or 

anticipates receiving any Rule 15c2–7 

notices. However, because such notices 

could be made, the Commission 

estimates that one filing is made 

annually pursuant to Rule 15c2–7. 

Based on prior industry reports, the 

Commission estimates that the average 

time required to enter a disclosure 

pursuant to the rule is .75 minutes, or 

45 seconds. The Commission sees no 

reason to change this estimate. We 

estimate that impacted respondents 

spend a total of .0125 hours per year to 

comply with the requirements of Rule 

15c2–7 (1 notice (×) 45 seconds/notice). 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, 

DC 20549, or send an email to: PRA_

Mailbox@sec.gov. 

Dated: October 4, 2017. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21909 Filed 10–10–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81819; File No. SR–LCH 

SA–2017–006] 

Self-Regulatory Organizations; LCH 

SA; Notice of Designation of Longer 

Period for Commission Action on 

Proposed Rule Change Relating to 

Options on Index Credit Default Swaps 

October 4, 2017. 

On August 18, 2017, Banque Central 

de Compensation, which conducts 

business under the name LCH SA (‘‘LCH 

SA’’), filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change (SR–LCH SA– 

2017–006) to amend LCH SA’s CDS 

Clearing Rule Book, CDS Clearing 

Supplement, CDS Clearing Procedures, 

and CDS Dispute Resolution Protocol to 

incorporate relevant terms and make 

certain conforming and clarifying 

changes in order to permit LCH SA to 

clear options on index credit default 

swaps. The proposed rule change was 

published for comment in the Federal 

Register on August 31, 2017.3 The 

Commission received no comments 

regarding the proposed changes. 

Section 19(b)(2) of the Act provides 

that within 45 days of the publication of 

the notice of the filing or a proposed 

rule change, or within such longer 

period up to 90 days as the Commission 

may designate if it finds such longer 

period to be appropriate and publishes 

its reasons for so finding, or as to which 

the self-regulatory organization 

consents, the Commission shall either 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether the proposed rule change 

should be disapproved.4 The 45th day 

from the publication of the Notice is 

October 15, 2017. 

The Commission is extending the 45- 

day time period for Commission action 

on the proposed rule change. As noted 

above, LCH SA proposed to revise its 

CDS Clearing Rule Book, CDS Clearing 

Supplement, CDS Clearing Procedures, 

and CDS Dispute Resolution Protocol in 

order to permit it to clear options on 

index credit default swaps. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider LCH SA’s proposed rule 

change and the associated risks. 

Accordingly, the Commission, 

pursuant to Section 19(b)(2) of the Act, 

extends the period by which the 

Commission shall either approve or 

disapprove, or institute proceedings to 

determine whether to disapprove, the 

proposed rule change (File No. SR–LCH 

SA–2017–006) to no later than 

November 29, 2017. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21816 Filed 10–10–17; 8:45 am] 

BILLING CODE 8011–01–P 

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. 

Notice of application for an order 

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


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47258 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

1Each 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. 

2The Applicants acknowledge that they are not 

seeking nor receiving relief with respect to the 

separately managed accounts. 

3Applicants represent that the OFI Global China 

Fund will not invest in derivatives or in other 

pooled investment vehicles. 

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

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. 

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. 

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) 


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4Applicants 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). 

5Applicants 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. 

6Expenses 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. 

7Applicants 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. 

8Applicants 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. 

9Applicants 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 phasein period, or if it repatriates its investments below 

the quota amount. 

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. 

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. 

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 PCAOBregistered 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. 

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

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 


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47260 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

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 yearto-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 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 47261 

10Applicants 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. 

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 


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47262 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

11See supra, footnote 1. 

1Applicants request that the order apply to future 

series of the Trust or of other open-end management 

investment companies that currently exist or that 

may be created in the future (each, included in the 

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

actively-managed ETF. 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 such entity is 

included in the term ‘‘Adviser’’) and (b) comply 

with the terms and conditions of the application. 

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. 

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 abovereferenced 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. 

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 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32851; 812–14340] 

USCF Fund Advisors, LLC, et al. 

October 4, 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) actively-managed series of 

certain open-end management 

investment companies (‘‘Funds’’) to 

issue shares redeemable in large 

aggregations only (‘‘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 (‘‘Acquiring Funds’’) to acquire 

shares of the Funds; and (f) certain 

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

redeem Creation Units in-kind in a 

master-feeder structure. 

APPLICANTS: USCF Fund Advisors, LLC 

(the ‘‘Initial Adviser’’), a Delaware 

limited liability company registered as 

an investment adviser under the 

Investment Advisers Act of 1940, USCF 

ETF Trust (the ‘‘Trust’’), a Delaware 

statutory trust registered under the Act 

as an open-end management investment 

company with multiple series, and 

ALPS Distributors, Inc. (‘‘Distributor’’), 

a Colorado Corporation and brokerdealer registered under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’). 

FILING DATES: The application was filed 

on July 31, 2014 and amended on 

November 11, 2014, February 13, 2015, 

August 24, 2016, February 23, 2017 and 

July 7, 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, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090; 

Applicants: Applicants, James M. Cain 

and Cynthia R. Beyea, Eversheds 

Sutherland (US) LLP, 700 Sixth Street 

NW., Suite 700, Washington, DC 20001. 

FOR FURTHER INFORMATION CONTACT: 

Jeremy Heckerling, Senior Counsel, at 

(202) 551–7259, 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 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 

actively-managed exchange traded 

funds (‘‘ETFs’’).1 Fund shares will be 


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