# EDGAR Filing Document

**Accession Number:** 0001552947
**File Stem:** 0001580642-23-000351
**Filing Date:** 2023-1
**Character Count:** 244764
**Document Hash:** c1c77d3ba05cd5f7f7712d68144f93b8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001580642-23-000351.hdr.sgml**: 20230124

**ACCESSION NUMBER**: 0001580642-23-000351

**CONFORMED SUBMISSION TYPE**: 40-APP

**PUBLIC DOCUMENT COUNT**: 2

**FILED AS OF DATE**: 20230124

**DATE AS OF CHANGE**: 20230124

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Two Roads Shared Trust
- **CENTRAL INDEX KEY:** 0001552947
- **IRS NUMBER:** 000000000

**FILING VALUES:**
- **FORM TYPE:** 40-APP

**SEC ACT:**
- **SEC FILE NUMBER:** 812-15428
- **FILM NUMBER:** 23548786

**BUSINESS ADDRESS:**
- **STREET 1:** 225 PICTORIA DRIVE
- **STREET 2:** SUITE 450
- **CITY:** CINCINNATI
- **STATE:** OH
- **ZIP:** 45246
- **BUSINESS PHONE:** 402-895-1600

**MAIL ADDRESS:**
- **STREET 1:** 17605 WRIGHT STREET
- **STREET 2:** SUITE 200
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68130

**EXPEDITED REVIEW REQUESTED UNDER 17 CFR 270.0-5(d)**

**File No. 812-[ ]**

**UNITED STATES OF AMERICA**

**BEFORE THE**

**U.S. SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**In the Matter of**

**TWO ROADS SHARED TRUST**

225 Pictoria Drive, Suite 450

Cincinnati, OH 45246

**AND**

**HYPATIA CAPITAL MANAGEMENT LLC**

430 Park Avenue, 19th Floor

New York, NY 10022

**APPLICATION FOR AN ORDER OF EXEMPTION PURSUANT TO SECTION 6(c) OF THE<br> INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"), FROM: (1)<br> CERTAIN PROVISIONS OF SECTION 15(a) OF THE 1940 ACT AND (2) CERTAIN<br> DISCLOSURE REQUIREMENTS UNDER VARIOUS RULES AND FORMS**

***Please direct all communications to:***

**Stacy H. Louizos<br> Blank Rome, LLP<br> 1271 Avenue of the Americas<br> New York, NY 10020<br> slouizos@blankrome.com**

***With a copy to:***

**Timothy Burdick<br> Ultimus Fund Solutions, LLC<br> 80 Arkay Drive, Suite 110<br> Hauppauge, NY 11788<br> tburdick@ultimusfundsolutions.com**

Page 1 of 27 sequentially numbered pages (including exhibits)

As filed with the Securities and Exchange Commission on January 24, 2023

UNITED STATES OF AMERICA

BEFORE THE

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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| |
|:---|
| APPLICATION FOR AN |
| ORDER OF EXEMPTION |
| PURSUANT TO SECTION 6(c) |
| OF THE INVESTMENT |
| COMPANY ACT OF 1940, AS |
| AMENDED (THE "1940 |
| ACT"), FROM: (1) CERTAIN |
| PROVISIONS OF SECTION |
| 15(a) OF THE 1940 ACT AND |
| (2) CERTAIN DISCLOSURE |
| REQUIREMENTS UNDER |
| VARIOUS RULES AND |
| FORMS |

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**I.** **INTRODUCTION** 

Two Roads Shared Trust (the "Trust"), a registered open-end management investment company that offers one or more series of shares, on its own behalf, and on behalf of each series, and Hypatia Capital Management LLC (the "Initial Adviser" or the "Adviser" and, together with the Trust, the "Applicants"),<sup>1</sup> the investment adviser to the Hypatia Women CEO ETF<sup>2</sup> (the "Fund"), hereby submit this application (the "Application") to the Securities and Exchange Commission (the "Commission") for an order of exemption pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the "1940 Act").

Applicants request an order exempting them from Section 15(a) of the 1940 Act to permit the Adviser, subject to the approval of the board of trustees of the Trust (the "Board" or

<sup>1</sup> The term "Adviser" means (i) the Initial Adviser, (ii) its successors, and (iii) any entity controlling, controlled by, or under common control with, the Initial Adviser or its successors that serves as the primary adviser to a Subadvised Fund (as defined below). For the 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.

<sup>2</sup> The Trust also offers other series not advised by the Adviser and the relief sought herein will not apply to such other series or investment advisers unless the Commission has granted an order of exemption to such series and investment advisers allowing them to rely on the relief granted herein.

"Trustees")<sup>3</sup> , including a majority of those who are not "interested persons" of the Trust or the Adviser, as defined in Section 2(a)(19) of the 1940 Act (the "Independent Trustees"), to take certain actions without obtaining shareholder approval as follows: (i) select investment subadvisers (each a "Subadviser" and collectively, the "Subadvisers") for all or a portion of the assets of the Fund pursuant to an investment subadvisory agreement with each Subadviser (each a "Subadvisory Agreement" and collectively, the "Subadvisory Agreements"); and (ii) materially amend Subadvisory Agreements with the Subadvisers.

As used herein, a "Subadviser" for a Fund is any investment adviser that enters into a Subadvisory Agreement with respect to a Fund. Applicants also apply for an order of the Commission under Section 6(c) of the 1940 Act exempting the Fund from certain disclosure obligations under the following rules and forms: (i) Item 19(a)(3) of Form N-1A; (ii) Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8), and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and (iii) Sections 6-07(2) (a), (b), and (c) of Regulation S-X under the Securities Act of 1933, as amended (the "Securities Act"). Similar to the order the Commission recently granted to Carillon Series Trust, et al.<sup>4</sup> , in addition to Wholly-Owned and Non-Affiliated Subadvisers (both as defined below), the relief described in

<sup>3</sup> The term "Board" also includes the board of trustees or directors of a future Subadvised Fund (as defined below), if different from the board of trustees of the Trust.

<sup>4</sup> The Commission issued an order granting the expanded relief requested by the Application. Carillon Series Trust, et al., Investment Company Act Release No. 33464 (May 2, 2019) (Notice) and No. 33494 (May 29, 2019) (Order) (the "Carillon Order"). See also Touchstone Strategic Trust, et al., Investment Company Act Rel. No. 34790 (December 22, 2022) (Notice) and No. 34809 (January 18, 2023) (Order) (the "Touchstone Order"). See also Advisors Series Trust and Semper Capital Management, L.P., Investment Company Act Rel. No. 34500 (February 9, 2022) (Notice) and No. 34528 (March 8, 2022) (Order) (the "Semper Capital Management Order"). See also Investment Managers Series Trust and Hamilton Lane Advisors, L.L.C., Investment Company Act Rel. No. 34370 (September 1, 2021) (Notice) and No. 34385 (September 27, 2021) (Order) (the "Hamilton Lane Order"). See also Uncommon Investment Funds Trust and Uncommon Investment Advisors LLC, Investment Company Act Rel. No. 34331 (July 15, 2021) (Notice) and No. 34354 (August 11, 2021) (Order) (the "Uncommon Investment Funds Order"). See also New Age Alpha Trust and New Age Alpha Advisors, LLC, Investment Company Act Rel. No. 34322 (July 6, 2021) (Notice) and No. 34348 (August 3, 2021) (Order) (the "New Age Alpha Trust Order"). See also Listed Funds Trust, et al., Investment Company Act Rel. No. 34293 (June 2, 2021) (Notice) and No. 34321 (June 29, 2021) (Order) ("LFT Order"). See also Azzad Funds, et al., Investment Company Act Rel. No. 34241 (April 5, 2021) and No. 34261 (April 30, 2021) ("Azzad Order"). See also ETF Series Solutions and Distillate Capital Partners LLC, Investment Company Act Release No. 34169 (January 11, 2021) (Notice) and No. 34190 (February 8, 2021) (Order) (the "Distillate Capital Order"); Esoterica Thematic Trust and Esoterica Capital LLC, Investment Company Act Release No. 34161 (January 4, 2021) (Notice) and No. 34185 (February 1, 2021) (Order) (the "Esoterica Order"); ETF Series Solutions and Clearshares LLC, Investment Company Act Release No. 34144 (December 21, 2020) (Notice) and No. 34174 (January 19, 2021) (Order) (the "Clearshares Order"); OSI ETF Trust, et. al., Investment Company Act Release No. 33678 (October 29, 2019) (Notice) and No. 33705 (November 26, 2019) (Order) (the "OSI ETF Order"); and Investment Managers Series Trust II, et. al., Investment Company Act Release No. 34075 (October 27, 2020) (Notice) and No. 34104 (November 23, 2020) (Order) (the "Investment Managers Order").

this Application would extend to any Subadviser that is an "affiliated person" (as such term is defined in Section 2(a)(3) of the 1940 Act) of the Fund or the Adviser for reasons other than serving as investment subadviser to one or more Funds (an "Affiliated Subadviser").<sup>5</sup>

Applicants request that the relief sought herein apply to Applicants, as well as to any existing or future registered open-end management investment company or series thereof that intends to rely on the requested order in the future and (i) is advised by the Adviser; (ii) uses the multi-manager structure described in this Application; and (iii) complies with the terms and conditions set forth herein (each, together with any Fund that currently uses the multi-manager structure described in this Application, a "Subadvised Fund" and collectively, the "Subadvised Funds").<sup>6</sup>

Applicants are seeking this exemption primarily to enhance the ability of the Adviser and the Board to obtain for a Subadvised Fund the services of one or more Subadvisers believed by the Adviser and the Board to be particularly well suited for all or a portion of the assets of the Subadvised Fund, and to make material amendments to Subadvisory Agreements believed by the Adviser and the Board to be appropriate, without the delay and expense of convening special meetings of shareholders to approve the Subadvisory Agreements. Under this structure, the Adviser, in its capacity as investment adviser, would evaluate, allocate assets to and oversee the Subadvisers, and make recommendations about their hiring, termination and replacement to the Board, at all times subject to the authority of the Board. This structure is commonly referred to as a "multi-manager" structure. In addition, Applicants are seeking relief from certain disclosure requirements concerning fees paid to Subadvisers.

<sup>5</sup> Section 2(a)(3) of the 1940 Act defines "affiliated person" as follows: "Affiliated person" of another person means (A) any person directly or indirectly owning, controlling, or holding with power to vote, 5 per centum or more of the outstanding voting securities of such other person; (B) any person 5 per centum or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other person; (C) any person directly or indirectly controlling, controlled by, or under common control with, such other person; (D) any officer, director, partner, copartner, or employee of such other person; (E) if such other person is an investment company, any investment adviser thereof or any member of an advisory board thereof; and (F) if such other person is an unincorporated investment company not having a board of directors, the depositor thereof.

<sup>6</sup> All registered open-end investment companies that currently intend to rely on the requested order are named as Applicants. The Fund that currently is, or that currently intends to be, a Subadvised Fund is identified in this Application. Any entity that relies on the requested order will do so only in accordance with the terms and conditions contained in this Application.

For purposes of this Application, the term "Subadviser" will also apply to any Subadviser to any wholly-owned subsidiary of a Subadvised Fund (each, a "Subsidiary" and collectively, the "Subsidiaries"). The Adviser will serve as investment adviser to each Subsidiary and may retain one or more Subadvisers to manage the assets of a Subsidiary. Applicants also request relief with respect to any Subadvisers who serve as Subadvisers to a Subsidiary. Where appropriate, Subsidiaries are also included in the term "Subadvised Funds."

For the reasons discussed below, Applicants believe that the requested relief is appropriate, in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. Applicants believe that the Subadvised Fund would be negatively impacted without the requested relief because of delays in hiring or replacing Subadvisers and costs associated with the proxy solicitation to approve new or amended Subadvisory Agreements.

**II.** **BACKGROUND** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>The Trust</u> 

The Trust is registered under the 1940 Act as an open-end management investment company organized as a Delaware statutory trust. The Adviser serves as "investment adviser," as defined in Section 2(a)(20) of the 1940 Act, to the Fund. The Trust intends to operate the Fund under a multi-manager structure and which will be offered and sold pursuant to a registration statement on Form N-1A. The Board consists of four (4) trustees, each of whom serves as an Independent Trustee.

The Trust offers shares of multiple series, each with its own distinct investment objectives, policies, and restrictions. The Adviser has retained a Subadviser to provide investment advisory services to the Fund.<sup>7</sup> The Fund will operate from its inception under a multi-manager structure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>The Adviser</u> 

Hypatia Capital Management LLC, with its business address at 430 Park Avenue, 19<sup>th</sup> Floor, New York, NY 10022, is a Delaware limited liability company registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and serves as investment adviser to the Fund. The Adviser serves as investment adviser to the Fund pursuant to an investment advisory agreement with the Fund (each, an "Investment Advisory Agreement" and, together, the "Investment Advisory Agreements"). Any future Adviser also will be registered with the Commission as an investment adviser under the Advisers Act.

<sup>7</sup> Each Subadvised Fund discloses in its registration statement that it intends to operate pursuant to the order as requested in this Application, if granted. The prospectus for a Subadvised Fund will continue to include the disclosure required by Condition 2 below at all times subsequent to the approval required by Condition 1 below. If a Subadvised Fund has obtained shareholder approval to operate under the multi-manager structure described herein prior to the issuance of an order as requested in this Application, the prospectus for the Subadvised Fund will at all times following such shareholder approval contain appropriate disclosure that the Subadvised Fund has applied for exemptive relief to operate under the multi-manager structure described herein, including the ability to hire new Subadvisers and materially amend an existing Subadvisory Agreement without soliciting further shareholder vote.

Consistent with the terms of a Subadvised Fund's Investment Advisory Agreement, the Adviser may, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable Subadvised Fund (if required by applicable law), delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Fund to a Subadviser. The Adviser retains overall responsibility for the management and investment of the assets of the Subadvised Fund. With respect to each Subadvised Fund, the Adviser's responsibilities include, for example, recommending the removal or replacement of Subadvisers, and allocating the portion of that Subadvised Fund's assets to any given Subadviser and reallocating those assets as necessary from time to time. The Adviser evaluates, selects and recommends Subadvisers for the Subadvised Fund, and monitors and reviews each Subadviser and its performance and its compliance with the applicable Subadvised Fund's investment policies and restrictions.

Each Investment Advisory Agreement has been or will be approved by the Board, including a majority of the Independent Trustees, and by the shareholders of the relevant Fund in the manner required by Sections 15(a) and 15(c) of the 1940 Act. The terms of the Investment Advisory Agreements comply or will comply with Section 15(a) of the 1940 Act. Applicants are not seeking an exemption from the provisions of the 1940 Act with respect to the Investment Advisory Agreements. Pursuant to the terms of each Investment Advisory Agreement, the Adviser, subject to the oversight of the Board, has agreed or will agree to (i) provide continuous investment management for each Fund; (ii) determine the securities and other investments to be purchased, retained, sold or loaned by each Fund and the portion of such assets to be invested or held uninvested as cash; and (iii) exercise full discretion and act for each Fund in the same manner and with the same force and effect as such Fund itself might or could do with respect to purchases, sales, or other transactions and with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. The Adviser also is or will be responsible for effecting transactions for each Fund and selecting brokers or dealers to execute such transactions for each Fund. The Adviser will periodically review each Fund's investment policies and strategies and, based on the need of a particular Fund, may recommend changes to the investment policies and strategies of the Fund for consideration by the Board.

Each Investment Advisory Agreement permits or will permit the Adviser to enter into Subadvisory Agreements with one or more Subadvisers. Pursuant to its authority under the Investment Advisory Agreements, the Adviser has entered or will enter into Subadvisory Agreements as described below under "The Subadvisers and the Subadvised Fund." If the name of any Subadvised Fund contains the name of a subadviser, the name of the Adviser that serves as the primary adviser to the Subadvised Fund, or a trademark or trade name that is owned by or publicly used to identify that Adviser, will precede the name of the subadviser.

For its services to each Fund, the Adviser receives or will receive an investment advisory fee from that Fund as specified in the applicable Investment Advisory Agreement. The

investment advisory fees are calculated based on the average daily net assets of the particular Fund, calculated daily as of the close of business on each business day during the month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>The Subadvisers and the Subadvised Fund</u> 

Pursuant to the authority under the Investment Advisory Agreements, the Adviser may enter into Subadvisory Agreements with various Subadvisers on behalf of the Fund. The Initial Adviser has entered into a Subadvisory Agreement with Vident Investment Advisory, LLC ("Vident"). Vident is considered a Non-Affiliated Subadviser (as defined below). The Adviser also may, in the future, enter into Subadvisory Agreements with other Subadvisers on behalf of the Fund and other Subadvised Funds.

With respect to any future Subadviser that is wholly owned by the Adviser or the Adviser's parent company, the Adviser will have overall responsibility for the affairs of such Subadviser, and generally will approve certain actions by that Subadviser that could materially affect the operations of the Adviser and its subsidiaries as a group. Vident has, and any future Subadviser will have, their own employees who would provide investment services to a Subadvised Fund.

The Subadviser is, and any future Subadvisers will be, "investment advisers" to the Subadvised Fund within the meaning of Section 2(a)(20) of the 1940 Act and provide, or will provide, investment management services to the Subadvised Fund subject to, without limitation, the requirements of Sections 15(c) and 36(b) of the 1940 Act. In addition, the Subadviser is, and any future Subadvisers will be, registered with the Commission as an investment adviser under the Advisers Act or not subject to such registration. The Adviser selects Subadvisers based on the Adviser's evaluation of the Subadvisers' skills in managing assets pursuant to particular investment styles, and recommends their hiring to the Board. In the future, the Adviser may employ multiple Subadvisers for one or more of any Subadvised Fund. In those instances, the Adviser would allocate and, as appropriate, reallocate a Subadvised Fund's assets among the Subadvisers.

The Adviser engages or will engage in an ongoing analysis of the continued advisability of retaining a Subadviser and makes recommendations to the Board as needed. The Adviser also negotiates and renegotiates the terms of the Subadvisory Agreements with a Subadviser, including the fees paid to the Subadvisers, and makes recommendations to the Board as needed.

The Subadvisers, subject to the oversight of the Adviser and the Board, determine or will determine the securities and other instruments to be purchased, sold or entered into by a Subadvised Fund's portfolio or a portion thereof, and place orders with brokers or dealers that they select.<sup>8</sup> The Subadvisers keep or will keep certain records required by the 1940 Act and the

<sup>8</sup> For the purposes of this Application, a "Subadviser" also includes an investment subadviser that provides or will provide the Adviser with a model portfolio reflecting a specific strategy, style or focus with respect to the investment of all or a portion of a Subadvised Fund's assets. The Adviser may use the model portfolio to determine the securities and other instruments to be purchased, sold, or entered into by a Subadvised Fund's portfolio or a portion thereof, and place orders with brokers or dealers that it selects.

Advisers Act to be maintained on behalf of the relevant Subadvised Fund, and assist or will assist the Adviser to maintain the Subadvised Fund's compliance with the relevant requirements of the 1940 Act. The Subadvisers monitor or will monitor the respective Subadvised Fund's investments and provide or will provide periodic reports to the Board and the Adviser. The Subadvisers also make or will make their officers and employees available to the Adviser and the Board to review the investment performance and investment policies of the Subadvised Fund.

The Subadvisory Agreements were or will be approved by the Board, including a majority of the Independent Trustees, in accordance with Sections 15(a) and 15(c) of the 1940 Act.

The terms of each Subadvisory Agreement comply or will comply fully with the requirements of Section 15(a) of the 1940 Act. Each Subadvisory Agreement will set forth the duties of the Subadviser and precisely describe the compensation paid to the Subadviser.

After an initial two-year period, the terms of the Subadvisory Agreements are reviewed and renewed on an annual basis by the Board, including a majority of the Independent Trustees in accordance with Section 15(c) of the 1940 Act. The Board dedicates substantial time to review contract matters, including matters relating to Investment Advisory Agreements and Subadvisory Agreements. With respect to the Subadvised Fund, the Board reviews comprehensive materials received from the Adviser, the Subadviser, independent third parties and independent counsel. Applicants will continue this annual review and renewal process for Subadvisory Agreements in accordance with the 1940 Act if the relief requested herein is granted by the Commission.

The Board reviews information provided by the Adviser and Subadvisers when it is asked to approve or renew Subadvisory Agreements. The Subadvised Fund discloses in its statutory prospectus that a discussion regarding the basis for the Board's approval and renewal of the Investment Advisory Agreements and any applicable Subadvisory Agreements is available in the Subadvised Fund's annual or semi-annual report to shareholders for the relevant period in accordance with Item 10(a)(1)(iii) of Form N-1A. The information provided to the Board is maintained as part of the records of the respective Subadvised Fund pursuant to Rule 31a-1(b)(4) and Rule 31a-2 under the 1940 Act.

Pursuant to each Subadvisory Agreement, the Adviser has agreed or will agree to pay each Subadviser a fee, based on the percentage of the assets of a Subadvised Fund, from the fee received by the Adviser from a Subadvised Fund under the Investment Advisory Agreement.<sup>9</sup> Each Subadviser will bear its own expenses of providing investment management services to a Subadvised Fund.

**III.** **REQUEST FOR EXEMPTIVE RELIEF** 

<sup>9</sup> A Subadvised Fund also may pay advisory fees directly to a Subadviser.

Section 6(c) of the 1940 Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the 1940 Act, or any rule thereunder, if such relief 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 1940 Act. Applicants believe that the requested relief described in this Application meets this standard.

**IV.** **APPLICABLE LAW AND DISCUSSION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** <u>Shareholder Vote</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Regulatory Background</u> 

Section 15(a) of the 1940 Act states, in part, that it is unlawful for any person to act as an investment adviser to a registered investment company "except pursuant to a written contract, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company."

Section 2(a)(20) of the 1940 Act defines an "investment adviser" as any person who, pursuant to an agreement with such registered investment company or with an investment adviser of such registered investment company, is empowered to determine what securities or other property shall be purchased or sold by such registered investment company. Consequently, the Subadvisers are deemed to be within the definition of an "investment adviser" and, therefore, the Subadvisory Agreements are each subject to Section 15(a) of the 1940 Act to the same extent as the Investment Advisory Agreements.

Therefore, Section 15(a) of the 1940 Act requires a majority of the outstanding voting securities of a Subadvised Fund to approve Subadvisory Agreements whenever the Adviser proposes to the Board to hire new Subadvisers for a Subadvised Fund. This provision would also require shareholder approval by a majority vote for any material amendment to Subadvisory Agreements.

The Subadvisory Agreements are required to terminate automatically and immediately upon their "assignment," which could occur upon a change in control of the Subadvisers.<sup>10</sup>

Rule 2a-6 under the 1940 Act provides that certain transactions that do not result in a "change in actual control or management of the investment adviser" to a registered investment company are not assignments for purposes of Section 15(a)(4) of the 1940 Act, thereby effectively providing an exemption from the shareholder voting requirements in Section 15(a) of

<sup>10</sup> See Section 15(a)(4) of the 1940 Act. Section 2(a)(4) of the 1940 Act defines "assignment" as any direct or indirect transfer or hypothecation of a contract.

the 1940 Act. Applicants do not believe that Rule 2a-6 under the 1940 Act provides a safe harbor to recommend, hire and terminate Subadvisers. Each Subadviser is expected to run its own day-to-day operations and each will have its own investment personnel. Therefore, in certain instances appointing certain Subadvisers could be viewed as a change in management and, as a result, an "assignment" within the meaning of the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** <u>Requested Relief</u> 

Applicants seek relief to (i) select Subadvisers, including Affiliated Subadvisers, for all or a portion of the assets of a Subadvised Fund and enter into Subadvisory Agreements and (ii) materially amend Subadvisory Agreements with such Subadvisers, each subject to the approval of the Board, including a majority of the Independent Trustees, without obtaining shareholder approval required under Section 15(a) of the 1940 Act. Such relief would include, without limitation, the replacement or reinstatement of any Subadviser with respect to which a Subadvisory Agreement has automatically terminated as a result of an "assignment," within the meaning of Section 2(a)(4) of the 1940 Act. Applicants believe that the relief sought should be granted by the Commission because (1) the Adviser either will operate a Subadvised Fund, or may operate the Subadvised Fund, in a manner that is different from conventional investment companies; (2) the relief will benefit shareholders by enabling the Subadvised Fund to operate in a less costly and more efficient manner; and (3) Applicants will consent to a number of conditions that adequately address the policy concerns of Section 15(a) of the 1940 Act, including conditions designed to ensure that shareholder interests are adequately protected through Board oversight.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Operations of the Trust</u>

Section 15(a) was designed to protect the interests and expectations of a registered investment company's shareholders by requiring they approve investment advisory contracts, including subadvisory contracts.<sup>11</sup> Section 15(a) is predicated on the belief that if a registered investment company is to be managed by an investment adviser different from the investment adviser selected by shareholders at the time of the investment, the new investment adviser should be approved by shareholders.<sup>12</sup> The relief sought in this Application is consistent with this public policy.

In the case of a traditional investment company, the investment adviser is a single entity that employs one or more individuals as portfolio managers to make the day-to-day investment decisions. The investment adviser may terminate or hire portfolio managers without board or shareholder approval and has sole discretion to set the compensation it pays to the portfolio

<sup>11</sup> See Section 1(b)(6) of the 1940 Act.

<sup>12</sup> Hearings on S. 3580 before a Subcomm. of the Senate Comm. on Banking and Currency, 76th Cong., 3d Sess. 253 (1940) (statement of David Schenker).

managers. Alternatively, for subadvised funds, the investment adviser is not normally responsible for the day-to-day investment decisions and instead, the investment adviser selects, oversees, and evaluates subadvisers who ultimately are responsible for the day-to-day investment decisions.

Primary responsibility for management of a Subadvised Fund's assets, including the selection and oversight of the Subadvisers, is vested in the Adviser, subject to the oversight of the Board. Applicants believe that it is consistent with the protection of investors to vest the selection and oversight of the Subadvisers in the Adviser in light of Applicants' multi-manager structure, as well as the shareholders' expectation that the Adviser is in possession of information necessary to select the most capable Subadvisers. The Adviser has the requisite expertise to evaluate, select and oversee the Subadvisers. The Adviser will not normally make day-to-day investment decisions for a Subadvised Fund.<sup>13</sup>

From the perspective of the shareholder, the role of the Subadvisers is substantially equivalent to the role of the individual portfolio managers employed by an investment adviser to a traditional investment company. The individual portfolio managers and the Subadvisers are each charged with the selection of portfolio investments in accordance with a Subadvised Fund's investment objectives and policies and have no broad supervisory, management or administrative responsibilities with respect to a Subadvised Fund. Shareholders expect the Adviser, subject to review and approval of the Board, to select a Subadviser who is in the best position to achieve a Subadvised Fund's investment objective. Shareholders also rely on the Adviser for the overall management of a Subadvised Fund and a Subadvised Fund's total investment performance.

Whenever required by Section 15(c) of the 1940 Act, the Board will request and the Adviser and each Subadviser will furnish such information as may be reasonably necessary for the Board to evaluate the terms of the Investment Advisory Agreements and the Subadvisory Agreements. The information that is provided to the Board will be maintained as part of the records of the Subadvised Fund in accordance with the applicable recordkeeping requirements under the 1940 Act and made available to the Commission in the manner prescribed by the 1940 Act.

In addition, the Adviser and the Board will consider the reasonableness of the Subadviser's compensation with respect to each Subadvised Fund for which the Subadviser will provide portfolio management services. Although only the Adviser's fee is payable directly by a Subadvised Fund, and the Subadviser's fee is payable by the Adviser,<sup>14</sup> the Subadviser's fee directly bears on the amount and reasonableness of the Adviser's fee payable by a Subadvised Fund. Accordingly, the Adviser and the Board will analyze the fees paid to Subadvisers in evaluating the reasonableness of the overall arrangements.

<sup>13</sup> Although the Adviser will not normally make such day-to-day investment decisions, it may manage all or a portion of a Subadvised Fund.

<sup>14</sup> A Subadvised Fund also may pay advisory fees directly to a Subadviser.

With respect to oversight, Applicants note that the Adviser performs and will perform substantially identical oversight of all Subadvisers, regardless of whether they are affiliated with the Adviser. Such oversight is similar in many respects to how the Adviser would oversee its own internal portfolio management teams.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Lack of Economic Incentives</u>

In allocating the management of Subadvised Fund assets between itself and one or more Subadvisers, Applicants acknowledge that the Adviser has an incentive to consider the benefit it will receive, directly or indirectly, from the fee paid for the management of those assets. However, Applicants believe that the protections afforded by the conditions set forth in this Application would prevent the Adviser from acting to the detriment of a Subadvised Fund and its shareholders. Applicants assert that the proposed conditions are designed to provide the Board with sufficient independence and the resources and information it needs to monitor and address conflicts of interest. In particular, the Adviser will provide the Board with any information that may be relevant to the Board's evaluation of material conflicts of interest present in any subadvisory arrangement when the Board is considering, with respect to a Subadvised Fund, a change in Subadviser or an existing Subadvisory Agreement as part of its annual review process. The Board will also have to make a separate finding, reflected in the Board minutes, that any change in Subadvisers or any renewal of an existing Subadvisory Agreement is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to it, does not involve a conflict of interest from which the Adviser, a Subadviser, or any officer or Trustee of the Subadvised Fund or any officer or board member of the Adviser derives an inappropriate advantage.

Applicants note that the relief they are requesting would not be subject to two conditions that have been customary in previous exemptive orders for similar relief, including (i) restrictions on the ownership of interest in Subadvisers by trustees and officers of the Subadvised Fund and the Adviser, and (ii) a requirement that the Adviser provide the Board with profitability reports each quarter. Applicants believe eliminating these conditions is appropriate with respect to the requested relief. As to the condition on ownership, Applicants assert that restricting ownership of interests in a Subadviser by trustees and officers would not be meaningful where the Adviser may itself own an interest in the Subadviser and the Subadviser may be selected for a Subadvised Fund under the requested relief. <sup>15</sup> As to the condition requiring quarterly profitability reports, Applicants note that the Board reviews and will continue to review profitability information at the time of any proposed Subadviser change (see condition 7) and as part of its annual review of each Subadvisory Agreement pursuant to Section 15(e) of the 1940 Act.

<sup>15</sup> Any Trustee of the Board that has an ownership interest in a Subadviser would not be deemed an Independent Trustee under Section 2(a)(19) of the 1940 Act.

Until the Carillon Order, the Commission has granted the requested relief solely with respect to Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief has been premised on the fact that such a Subadviser serves in the same limited capacity as an individual portfolio manager. Applicants believe this same rationale supports extending the requested relief to Affiliated Subadvisers. Moreover, Applicants note that, while the Adviser's judgment in recommending a Subadviser can be affected by certain conflicts of interest or economic incentives, they do not warrant denying the extension of the requested relief to Affiliated Subadvisers. For one, the Adviser faces those conflicts and incentives in allocating fund assets between itself and a Subadviser, and across Subadvisers, as it has an interest in considering the benefit it will receive, directly or indirectly, from the fee the fund pays for the management of those assets. Moreover, the Adviser has employed and will continue to employ the same methodology to evaluate potential conflicts of interest, regardless of the affiliation between the Adviser and Subadviser. While the selection and retention of Affiliated Subadvisers by the Adviser potentially presents different or additional conflicts of interest than may be the case with Non-Affiliated or Wholly-Owned Subadvisers, the proposed terms and conditions of the requested relief are designed to address the potential conflicts of interest with respect to both those common to all types of Subadvisers and specific to Affiliated Subadvisers. In particular, Applicants believe that the proposed conditions are protective of shareholder interests by ensuring the Board's independence and providing the Board with the appropriate resources and information to monitor and address conflicts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Benefits to Shareholders</u>

Without the requested relief, when a new Affiliated Subadviser is retained by the Adviser on behalf of a Subadvised Fund, the shareholders of the Subadvised Fund are required to approve the Subadvisory Agreement. Similarly, if an existing Subadvisory Agreement with an Affiliated Subadviser is amended in any material respect, approval by the shareholders of the affected Subadvised Fund is required. Moreover, if a Subadvisory Agreement with an Affiliated Subadviser is "assigned" as a result of a change in control of the Subadviser, the shareholders of the affected Subadvised Fund will be required to approve retaining the existing Subadviser. In all these instances the need for shareholder approval requires a Subadvised Fund to call and hold a shareholder meeting, create and distribute proxy materials, and solicit votes from shareholders on behalf of the Subadvised Fund, and generally necessitates the retention of a proxy solicitor. This process is time-intensive, expensive and slow, and, in the case of a poorly performing Subadviser or one whose management team has parted ways with the Subadviser, potentially harmful to a Subadvised Fund and its shareholders.

As noted above, shareholders investing in a Fund that has a Subadviser are effectively hiring the Adviser to manage a Subadvised Fund's assets by overseeing, monitoring and evaluating the Subadviser rather than by the Adviser hiring its own employees to oversee the Subadvised Fund. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of a Subadvised Fund are paying the Adviser — the selection, oversight and evaluation of Subadvisers, including Affiliated Subadvisers — without incurring unnecessary

delays or expenses is appropriate and in the interest of a Subadvised Fund's shareholders and will allow such Subadvised Fund to operate more efficiently. Within this structure, the Adviser is in the better position to make an informed selection and evaluation of a Subadviser than are individual shareholders. Without the delay inherent in holding shareholder meetings (and the attendant difficulty in obtaining the necessary quorums), a Subadvised Fund will be able to hire or replace Affiliated Subadvisers more quickly and at less cost, when the Board, including a majority of the Independent Trustees, and the Adviser believe that a change would benefit a Subadvised Fund and its shareholders.

Until the Carillon Order, the Commission has previously granted the requested relief solely with respect to certain Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief has permitted Subadvised Funds to avoid the time-intensive and expensive shareholder solicitation process with respect to hiring or making a material amendment to a Subadvisory Agreement with respect to such subadvisers. As discussed above, Applicants believe the same rationale supports extending the requested relief to Affiliated Subadvisers as well, and while Affiliated Subadvisers may give rise to different or additional conflicts of interests, the proposed terms and conditions, including the enhanced oversight by the Board, address such potential conflicts. Moreover, treating all Subadvisers equally under the requested relief might help avoid the selection of Subadvisers potentially being influenced by considerations regarding the applicable regulatory requirements (i.e., whether a shareholder vote is required) and the associated costs and delays.<sup>16</sup>

If the relief requested is granted, each Investment Advisory Agreement will continue to be fully subject to Section 15(a) of the 1940 Act. Moreover, the relevant Board will consider the Investment Advisory Agreements and Subadvisory Agreements in connection with its annual contract renewal process under Section 15(c) of the 1940 Act, and the standards of Section 36(b) of the 1940 Act will be applied to the fees paid to each Subadviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Shareholder Notification</u> 

With the exception of the relief requested in connection with Aggregate Fee Disclosure (as defined below), the prospectus and statement of additional information for each Subadvised Fund will include all information required by Form N-1A concerning the Subadvisers, including Affiliated Subadvisers, if the requested relief is granted. If a new Subadviser is retained, an existing Subadviser is terminated, or a Subadvisory Agreement is materially amended, a Subadvised Fund's prospectus and statement of additional information will be supplemented promptly pursuant to Rule 497(e) under the Securities Act.

<sup>16</sup> The Adviser is responsible for selecting Subadvisers in the best interests of the Subadvised Fund, regardless of the costs or timing constraints that may be associated with the process of seeking shareholder approval of Subadvisory Agreements and material amendments thereto.

If new Subadvisers are hired, the Subadvised Fund will inform shareholders of the hiring of a new Subadviser pursuant to the following procedures ("Modified Notice and Access Procedures"): (a) within 90 days after a new Subadviser is hired for any Subadvised Fund, that Subadvised Fund will send its shareholders either a Multi-manager Notice or a Multi-manager Notice and Multi-manager Information Statement;<sup>17</sup> and (b) a Subadvised Fund will make the Multi-manager Information Statement available on the website identified in the Multi-manager Notice no later than when the Multi-manager Notice (or Multi-manager Notice and Multi-manager Information Statement) is first sent to shareholders, and will maintain it on that website for at least 90 days. Under the requested relief, a Subadvised Fund would not furnish a Multi-manager Information Statement to shareholders when an existing Subadvisory Agreement is materially modified. In the circumstances described in this Application, a proxy solicitation to approve the appointment of new Subadvisers provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Moreover, as indicated above, the Board would comply with the requirements of Sections 15(a) and 15(c) of the 1940 Act before entering into or amending Subadvisory Agreements.

Prior to any Subadvised Fund relying on the requested relief in this Application, the Board, including its Independent Trustees, will have approved its operations as described herein. Additionally, the shareholders of the applicable Subadvised Fund have approved, or will approve, its operation as described herein by a vote of a majority of the outstanding voting securities, within the meaning of the 1940 Act, or by the sole shareholder prior to a Subadvised Fund offering its shares.<sup>18</sup>

<sup>17</sup> A"Multi-manager Notice" will be modeled on a Notice of Internet Availability as defined in Rule 14a-16 under the Exchange Act, and specifically will, among other things: (a) summarize the relevant information regarding the new Subadviser (except as modified to permit Aggregate Fee Disclosure as defined in this Application); (b) inform shareholders that the Multi-manager Information Statement is available on a website; (c) provide the website address; (d) state the time period during which the Multi-manager Information Statement will remain available on that website; (e) provide instructions for accessing and printing the Multi-manager Information Statement; and (f) instruct the shareholder that a paper or email copy of the Multi-manager Information Statement may be obtained, without charge, by contacting a Subadvised Fund.

A "Multi-manager Information Statement" will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Exchange Act for an information statement, except as modified by the requested order to permit Aggregate Fee Disclosure. Multi-manager Information Statements will be filed with the Commission via the EDGAR system.

<sup>18</sup> If a Subadvised Fund has obtained shareholder approval to operate pursuant to an exemptive order that would permit it to operate in a multi-manager structure where the Adviser would enter into or amend Subadvisory Agreements only with respect to Wholly-owned and Non-Affiliated Subadvisers subject to Board approval but without obtaining shareholder approval and has met all other terms and conditions of the requested order, the Subadvised Fund may rely on the applicable part of the order requested in this Application (i.e., hiring, amending Subadvisory Agreements with, and including Aggregate Fee Disclosure (as defined below) in response to the disclosure requirements discussed herein with respect to Wholly-Owned and Non-Affiliated Sub-Advisers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Fee Disclosure</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Regulatory Background</u> 

Form N-1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N-1A requires a registered investment company to disclose in its statement of additional information the method of computing the "advisory fee payable" by the investment company with respect to each investment adviser, including the total dollar amounts that the investment company "paid to the adviser (aggregated with amounts paid to affiliated advisers, if any), and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years."

Rule 20a-1 under the 1940 Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the Exchange Act. Item 22 of Schedule 14A sets forth the information that must be included in a registered investment company's proxy statement. Item 22(c)(1)(ii) requires a proxy statement for a shareholder meeting at which action will be taken on an investment advisory agreement to describe the terms of the advisory contract, "including the rate of compensation of the investment adviser." Item 22(c)(1)(iii) requires a description of the "aggregate amount of the investment adviser's fees and the amount and purpose of any other material payments" by the investment company to the investment adviser, or any affiliated person of the investment adviser during the fiscal year. Item 22(c)(8) requires a description of "the terms of the contract to be acted upon, and, if the action is an amendment to, or a replacement of, an investment advisory contract, the material differences between the current and proposed contract." Finally, Item 22(c)(9) requires a proxy statement for a shareholder meeting at which a change in the advisory fee will be sought to state (i) the aggregate amount of the investment adviser's fee during the last year; (ii) the amount that the adviser would have received had the proposed fee been in effect; and (iii) the difference between (i) and (ii) stated as a percentage of the amount in (i). Together, these provisions may require a Subadvised Fund to disclose the fees paid to a Subadviser in connection with shareholder action with respect to entering into, or materially amending, an advisory agreement or establishing, or increasing, advisory fees.

Regulation S-X sets forth the requirements for financial statements required to be included as part of a registered investment company's registration statement and shareholder reports filed with the Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require a registered investment company to include in its financial statement information about the investment advisory fees. These provisions could require a Subadvised Fund's financial statements to disclose information concerning fees paid to a Subadviser. The exemption from Regulation S-X requested below would permit a Subadvised Fund to include only the Aggregate Fee Disclosure (as defined below); all other items required by Sections 6-07(2)(a), (b) and (c) of Regulation S-X will be disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Requested Relief</u> 

Applicants seek relief to permit the Subadvised Fund to disclose (as a dollar amount and a percentage of the Subadvised Fund's net assets) (a) the aggregate fees paid to the Adviser and any Wholly-Owned Subadvisers; and (b) the aggregate fees paid to Affiliated and Non-Affiliated Subadvisers (collectively, the "Aggregate Fee Disclosure") in lieu of disclosing the fees that may be required by Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(2)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, and Section 6-07(2)(a), (b) and (c) of Regulation S-X.<sup>19</sup> The Aggregate Fee Disclosure would be presented as both a dollar amount and as a percentage of the Subadvised Fund's net assets. Applicants believe that the relief sought in this Application should be granted because the Adviser intends to operate the Subadvised Fund under a multi-manager structure. As a result, disclosure of the individual fees that the Adviser pays to the Subadvisers would not serve any meaningful purpose.

As noted above, the Adviser may operate the Subadvised Fund in a manner different from a traditional investment company. By investing in a Subadvised Fund, shareholders are hiring the Adviser to manage the Subadvised Fund's assets by overseeing, evaluating, monitoring, and recommending Subadvisers rather than by hiring its own employees to manage the assets directly. The Adviser, under the oversight of the Board, is responsible for overseeing the Subadvisers and recommending their hiring and replacement. In return, the Adviser receives an advisory fee from each Subadvised Fund. Pursuant to each Subadvisory Agreement, the Adviser has agreed or will agree to pay each Subadviser a fee, based on the percentage of the assets of a Subadvised Fund, from the fee received by the Adviser from a Subadvised Fund under the Investment Advisory Agreement. Each Subadviser will bear its own expenses of providing investment management services to a Subadvised Fund.<sup>20</sup> Disclosure of the individual fees that the Adviser would pay to the Subadvisers does not serve any meaningful purpose since investors pay the Adviser to oversee, monitor, evaluate and compensate the Subadvisers. Applicants contend that the primary reasons for requiring disclosure of individual fees paid to Subadvisers are to inform shareholders of expenses to be charged by a particular Subadvised Fund and to enable shareholders to compare the fees to those of other comparable investment companies. Applicants believe that the requested relief satisfies these objectives because the Subadvised Fund's overall advisory fee will be fully disclosed and, therefore, shareholders will

<sup>19</sup> As used herein, a "Wholly-Owned Subadviser" is any investment adviser that is (1) an indirect or direct "wholly-owned subsidiary" (as such term is defined in Section 2(a)(43) of the 1940 Act) of the Adviser, (2) a "sister company" of the Adviser that is an indirect or direct "wholly-owned subsidiary" of the same company that indirectly or directly wholly owns the Adviser (the Adviser's "parent company"), or (3) a parent company of the Adviser. A "Non-Affiliated Subadviser" is any investment adviser that is not an "affiliated person" (as defined in the 1940 Act) of a Fund or the Adviser, except to the extent that an affiliation arises solely because the Subadviser serves as a subadviser to one or more Funds. Section 2(a)(43) of the 1940 Act defines "wholly-owned subsidiary" of a person as a company 95 per centum or more of the outstanding voting securities of which are, directly or indirectly, owned by such a person.

<sup>20</sup> A Subadvised Fund also may pay advisory fees directly to a Subadviser.

know what a Subadvised Fund's fees and expenses are and will be able to compare the advisory fees a Subadvised Fund is charged to those of other investment companies.

Indeed, in a more conventional arrangement, requiring the Subadvised Fund to disclose the fees negotiated between the Adviser and the Subadvisers would be the functional equivalent of requiring single adviser investment companies to disclose the salaries of individual portfolio managers employed by that investment adviser. In the case of a traditional investment company, disclosure is made of the compensation paid to the investment adviser, but shareholders are not told or asked to vote on the salary paid by the investment adviser to individual portfolio managers. Similarly, in the case of the Subadvised Fund, the shareholders will have chosen to employ the Adviser and to rely upon the Adviser's expertise in monitoring the Subadvisers, recommending the Subadvisers' selection and termination (if necessary), and negotiating the compensation of the Subadvisers. There are no policy reasons that require shareholders of the Subadvised Fund to be informed of the individual Subadviser's fees any more than shareholders of a traditional investment company (single investment adviser) would be informed of the particular investment adviser's portfolio managers' salaries.<sup>21</sup>

The requested relief would benefit shareholders of the Subadvised Fund because it would improve the Adviser's ability to negotiate the fees paid to Subadvisers, including Affiliated Subadvisers. The Adviser's ability to negotiate with the various Subadvisers would be adversely affected by public disclosure of fees paid to each Subadviser. If the Adviser is not required to disclose the Subadvisers' fees to the public, the Adviser may be able to negotiate rates that are below a Subadviser's "posted" amounts as the rate would not be disclosed to the Subadviser's other clients. Moreover, if one Subadviser is aware of the advisory fee paid to another Subadviser, the Subadviser would likely take it into account in negotiating its own fee.

Until the Carillon Order, the Commission has previously granted the requested relief solely with respect to Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief only permitted the disclosure of aggregate fees paid to Wholly-Owned and Non-Affiliated Subadvisers and required disclosure of individual fees paid to Affiliated Subadvisers. If the requested relief under Section 15(a) of the 1940 Act is granted to extend to Affiliated Subadvisers, Applicants believe it is appropriate to permit each Subadvised Fund to disclose only aggregate fees paid to Affiliated Subadvisers for the same reasons that

<sup>21</sup> The relief would be consistent with the Commission's disclosure requirements applicable to fund portfolio managers that were previously adopted. See Investment Company Act Release No. 26533 (Aug. 23, 2004). Under these disclosure requirements, a fund is required to include in its statement of additional information, among other matters, a description of the structure of and the method used to determine the compensation structure of its "portfolio managers." Applicants state that with respect to each Subadvised Fund, the statement of additional information will describe the structure of, and method used to determine, the compensation received by each portfolio manager employed by any Subadviser. In addition to this disclosure with respect to portfolio managers, Applicants state that with respect to each Subadvised Fund, the statement of additional information will describe the structure of, and method used to determine, the compensation received by each Subadviser.

similar relief has been granted to Wholly-Owned and Non-Affiliated Subadvisers, as discussed above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C**.** <u>Precedent</u> 

Applicants note that substantially identical relief was granted by the Commission in the Carillon Order, the Touchstone Order, the Semper Capital Management Order, the Hamilton Lane Order, the Uncommon Investment Funds Order, New Age Alpha Trust Order, the LFT Order, the Azzad Order, the Distillate Capital Order, the Esoterica Order, the Clearshares Order, the OSI ETF Order, and the Investment Managers Order. Applicants note that substantially the same exemptions requested herein with respect to relief from Section 15(a) and relief from the disclosure requirements of the rules and forms discussed herein for Subadvisers, including Affiliated Subadvisers, have been granted previously by the Commission with respect to Wholly-Owned and Non-Affiliated Subadvisers. See, e.g., Natixis Funds Trust I, et al., Investment Company Act Release Nos. 33265 (October 5, 2018) (notice) and 33287 (October 31, 2018) (order); Advisors Asset Management, Inc. and ETF Series Solutions, Investment Company Act Release Nos. 33169 (July 24, 2018) (notice) and 33207 (August 21, 2018) (order); TriLine Index Solutions, LLC and ETF Series Solutions, Investment Company Act Release Nos. 33159 (July 11, 2018) (notice) and 33192 (August 6, 2018) (order); SL Advisors, LLC and ETF Series Solutions, Investment Company Act Release Nos. 33158 (July 11, 2018) (notice) and 33193 (August 6, 2018) (order); DMS ETF Trust I, et al., Investment Company Act Release Nos. 33156 (July 10, 2018) (notice) and 33196 (August 7, 2018) (order). For the reasons set forth above, Applicants believe that the relief sought would be appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.

**V.** **Conditions** 

Applicants agree that any order of the Commission granting the requested relief will be subject to the following conditions:

1. Before a Subadvised Fund may rely on the order requested herein, the operation of the Subadvised Fund in the manner described in this Application will be, or has been, approved by a majority of the Subadvised Fund's outstanding voting securities as defined in the 1940 Act, or, in the case of a Subadvised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Subadvised Fund's shares are offered to the public.

2. The prospectus for each Subadvised Fund will disclose the existence, substance and effect of any order granted pursuant to the Application. In addition, each Subadvised Fund will hold itself out to the public as employing the multi-manager structure described in this Application. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject

to oversight by the Board, to oversee the Subadvisers and recommend their hiring, termination, and replacement.

3. The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Fund's assets, and subject to review and oversight of the Board, will (i) set the Subadvised Fund's overall investment strategies, (ii) evaluate, select, and recommend Subadvisers for all or a portion of the Subadvised Fund's assets, (iii) allocate and, when appropriate, reallocate the Subadvised Fund's assets among Subadvisers, (iv) monitor and evaluate the Subadvisers' performance, and (v) implement procedures reasonably designed to ensure that Subadvisers comply with the Subadvised Fund's investment objective, policies and restrictions.

4. Subadvised Fund will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures.

5. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees

6. Independent Legal Counsel, as defined in Rule 0-l(a)(6) under the 1940 Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.

7. Whenever a Subadviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser.

8. The Board must evaluate any material conflicts that may be present in a subadvisory arrangement. Specifically, whenever a subadviser change is proposed for a Subadvised Fund ("Subadviser Change") or the Board considers an existing Subadvisory Agreement as part of its annual review process ("Subadviser Review"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
Adviser will provide the Board, to the extent not already being provided pursuant to Section 15(c) of the 1940 Act, with all relevant
information concerning:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any
material interest in the proposed new Subadviser, in the case of a Subadviser Change, or the Subadviser in the case of a Subadviser Review,
held directly or indirectly by the Adviser or a parent or sister company of the Adviser, and any material impact the proposed Subadvisory
Agreement may have on that interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any
arrangement or understanding in which the Adviser or any parent or sister company of the Adviser is a participant that (A) may have had
a material effect on the proposed Subadviser Change or Subadviser Review, or (B) may be materially affected by the proposed Subadviser
Change or Subadviser Review;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any
material interest in a Subadviser held directly or indirectly by an officer or Trustee of the Subadvised Fund, or an officer or board
member of the Adviser (other than through a pooled investment vehicle not controlled by such person); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any
other information that may be relevant to the Board in evaluating any potential material conflicts of interest in the proposed Subadviser
Change or Subadviser Review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 Board, including a majority of the Independent Trustees, will make a separate finding, reflected
 in the Board minutes, that the Subadviser Change or continuation after Subadviser Review
 is in the best interests of the Subadvised Fund and its shareholders and, based on the information
 provided to the Board, does not involve a conflict of interest from which the Adviser, a
 Subadviser, any officer or Trustee of the Subadvised Fund, or any officer or board member
 of the Adviser derives an inappropriate advantage.

9. Each Subadvised Fund will disclose in its registration statement the Aggregate Fee Disclosure.

10. In the event that the Commission adopts a rule under the 1940 Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.

11. Any new Subadvisory Agreement or any amendment to an existing Investment Advisory Agreement or Subadvisory Agreement that directly or indirectly results in an increase in the aggregate advisory fee rate payable by the Subadvised Fund will be submitted to the Subadvised Fund's shareholders for approval.

**VI.** **PROCEDURAL MATTERS** 

All of the requirements for execution and filing of this Application on behalf of Applicants have been complied with in accordance with the applicable organizational documents of Applicants, and the undersigned officers of Applicants are fully authorized to execute this Application and any amendments hereto. The resolutions of the Board are attached as Exhibits A-1 through A-2 to this Application in accordance with the requirements of Rule 0-2(c)(1) under the 1940 Act and the verifications required by Rule 0-2(d) under the 1940 Act are attached as Exhibits B-1 through B-2 to this Application. In accordance with the requirements for a request for expedited review of this Application, marked copies of two recent applications seeking the same relief as Applicants that are substantially identical as required by Rule 0-5(e) of the Act are attached as Exhibits C.

Pursuant to the requirements of Rule 0-2(f) under the 1940 Act, each Applicant hereby states that its address is:

Two Roads Shared Trust

225 Pictoria Drive, Suite 450

Cincinnati, OH 45246

Hypatia Capital Management LLC

430 Park Avenue, 19<sup>th</sup> Floor

New York, NY 10022

Copies of all notices, orders, oral or written communications or questions regarding this Application should be directed to:

Stacy H. Louizos

Blank Rome, LLP

1271 Avenue of the Americas

New York, NY 10020

<u>slouizos@blankrome.com</u>

Phone: 212.885.5147

Applicants desire that the Commission issue the requested order pursuant to Rule 0-5 under the 1940 Act without conducting a hearing.

**VII.** **CONCLUSION** 

For the foregoing reasons, Applicants respectfully request that the Commission issue an order under Section 6(c) of the 1940 Act granting the relief requested in the Application. Applicants submit that the requested exemption is necessary or appropriate in the public interest, consistent with the protection of investors, and consistent with the purpose fairly intended by the policy and provisions of the 1940 Act.

IN WITNESS WHEREOF, each Applicant has caused this Application to be duly executed as of the date set forth below:

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| | | | |
|:---|:---|:---|:---|
| TWO ROADS SHARED TRUST | TWO ROADS SHARED TRUST | HYPATIA CAPITAL MANAGEMENT LLC | HYPATIA CAPITAL MANAGEMENT LLC |
| By: | /s/ James Colantino | By: | /s/ John Grenawalt |
| Name: James Colantino | Name: James Colantino | Name: John Grenawalt | Name: John Grenawalt |
| Title: President | Title: President | Title: Chief Operating Officer | Title: Chief Operating Officer |
| Date: January 24, 2023 | Date: January 24, 2023 | Date: January 24, 2023 | Date: January 24, 2023 |

---

**EXHIBITS TO APPLICATION**

The following materials are made a part of the Application and are attached hereto:

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| | |
|:---|:---|
| **Designation** | **Document** |
| Exhibits A-1 through A-2 | Authorizations |
| Exhibits B-1 through B-2 | Verifications |
| Exhibit C | Rule 0-5(e)(3) Comparisons |

---

EXHIBIT A-1

AUTHORIZATION OF TWO ROADS SHARED TRUST

The undersigned, Timothy Burdick, hereby certifies that he is the duly elected Secretary of Two Roads Shared Trust (the "Trust"); that, with respect to the attached Application for exemption from the provisions of the Investment Company Act of 1940 (the "1940 Act"), the rules and forms thereunder and any amendments thereto (such application along with any amendments, the "Application"), all actions necessary to authorize the execution and filing of the Application under the Amended Agreement and Declaration of Trust and Amended and Restated By-Laws of the Trust have been taken and the person signing and filing the Application on behalf of the Trust is fully authorized to do so; and that the following is a complete, true and correct copy of the resolutions duly adopted by the Board of Trustees of the Trust at a meeting held on December 20– 21, 2022, in accordance with the Amended and Restated By-Laws of the Trust and that such resolutions have not been revoked, modified, rescinded, or amended and are in full force and effect:

RESOLVED, that the appropriate officers of the Trust are authorized to file on behalf of the Trust an Application, in a form satisfactory to such officers and counsel to the Trust, and any subsequent amendments as required, with the Securities and Exchange Commission for an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended ("1940 Act"), exempting the Trust and Hypatia Capital Management LLC (the "Adviser") from the provisions of Section 15(a) of the 1940 Act"), as well as from certain disclosure requirements in rule 20a-1 under the 1940 Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934 ("1934 Act"), and sections 6-07(2)(a), (b), and (c) of Regulation S-X, or from any other provision of the 1940 Act, 1934 Act, or rules thereunder as may be deemed necessary or advisable upon the advice of counsel to the Trust to permit the Adviser, subject to the supervision of the Trust's Board of Trustees and certain conditions required by the U.S. Securities and Exchange Commission ("Commission") and set forth in the Application for exemptive relief, to enter into and materially amend, for any series of the Trust managed by the Adviser now or hereafter existing that operates consistent with the terms of the exemptive Application, investment sub-advisory agreements with subadvisers, including non-affiliated subadvisers, wholly-owned subadvisers, and affiliated subadvisers, with the approval of the Board, but without obtaining shareholder approval of the applicable series.

TWO ROADS SHARED TRUST

---

| | |
|:---|:---|
| By: | /s/ Timothy Burdick |
| Name: Timothy Burdick | Name: Timothy Burdick |
| Title: Secretary | Title: Secretary |
| Date: January 24, 2023 | Date: January 24, 2023 |

---

EXHIBIT A-2

AUTHORIZATION OF HYPATIA CAPITAL MANAGEMENT LLC

I, John Grenawalt, do hereby certify that I am the duly appointed Chief Operating Officer of Hypatia Capital Management LLC (the "Adviser") that, with respect to the attached Application for exemptive relief from certain provisions of the Investment Company Act of 1940 and any amendments thereto (such application along with any amendments, the "Application"), all actions necessary to authorize the execution and filing of the Application under the Adviser's organizational documents have been taken and that I am fully authorized to sign and file the Application on behalf of the Adviser; and that the Adviser has adopted the following resolution on December 20, 2022, in accordance with its organizational documents:

RESOLVED, that that the appropriate officers of the Adviser be, and hereby are, authorized to file on behalf of the Adviser an Application with the Securities and Exchange Commission for an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended ("1940 Act"), exempting Two Roads Shared Trust ("Trust") and the Adviser from: (i) the provisions of Section 15(a) of the 1940 Act to permit the Adviser, subject to the supervision of the Trust's Board of Trustees, to appoint new subadvisers to a Trust series for which the Adviser serves as investment adviser (each a "Subadvised Fund") and to make material changes to the subadvisory agreements with subadvisers to the Subadvised Fund without obtaining shareholder approval of the applicable Subadvised Series; and (ii) the disclosures required pursuant to Item 19(a)(3) of Form N-IA, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A of Schedule 14A, and Sections 6-07(2) (a)-(c) of Regulation S-X relating to subadviser compensation.

HYPATIA CAPITAL MANAGEMENT LLC

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| | |
|:---|:---|
| By: | /s/ John Grenawalt |
| Name: John Grenawalt | Name: John Grenawalt |
| Title: Chief Operating Officer | Title: Chief Operating Officer |
| Date: January 24, 2023 | Date: January 24, 2023 |

---

EXHIBIT B-1

VERIFICATION TWO ROADS SHARED TRUST

The undersigned states he has duly executed the attached Application dated January 24, 2023 for an order pursuant to Section 6(c) of the Investment Company Act of 1940 ("1940 Act"), on behalf of Two Roads Shared Trust (the "Trust"); that he is President of the Trust and is authorized to sign the Application on behalf of the Trust; and that all action by shareholders and the Trust's Board of Trustees necessary to authorize the undersigned to execute and file the Application has been taken. The undersigned further states that he is familiar with the Application, and the contents thereof, and the facts therein set forth are true to the best of his knowledge, information, and belief.

TWO ROADS SHARED TRUST

---

| | |
|:---|:---|
| By: | /s/ James Colantino |
| Name: James Colantino | Name: James Colantino |
| Title: President | Title: President |
| Date: January 24, 2023 | Date: January 24, 2023 |

---

EXHIBIT B-2

VERIFICATION HYPATIA CAPITAL MANAGEMENT LLC

The undersigned states that he has duly executed the attached Application dated January 24, 2023 for an order pursuant to Section 6(c) of the Investment Company Act of 1940 (the "1940 Act"), on behalf of Hypatia Capital Management LLC; that he is Chief Operating Officer of Hypatia Capital Management LLC and is authorized to sign the Application on behalf of Hypatia Capital Management LLC; and that all action by the officers and other persons necessary to authorize the undersigned to execute and file the Application has been taken. The undersigned further states that he is familiar with the Application, and the contents thereof, and the facts therein set forth are true to the best of his knowledge, information, and belief.

HYPATIA CAPITAL MANAGEMENT LLC

---

| | |
|:---|:---|
| By: | /s/ John Grenawalt |
| Name: John Grenawalt | Name: John Grenawalt |
| Title: Chief Operating Officer | Title: Chief Operating Officer |
| Date: January 24, 2023 | Date: January 24, 2023 |

---

### Attached PDF Documents

**Attachment 1:** `hypatia-capital_40app.pdf`

File No. 812-__

EXPEDITED REVIEW REQUESTED UNDER 17 CFR 270.0-5(d)

File No. 812-__

As filed with the Securities and Exchange Commission on November 15, 2022

# UNITED STATES OF AMERICA

# BEFORE THE

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

In the Matter of

# TWO ROADS SHARED TRUST

225 Pictoria Drive, Suite 450
Cincinnati, OH 45246

AND

# HYPATIA CAPITAL MANAGEMENT LLC

430 Park Avenue, 19th Floor
New York, NY 10022

APPLICATION FOR AN ORDER OF EXEMPTION PURSUANT TO SECTION 6(c) OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"), FROM: (1)
CERTAIN PROVISIONS OF SECTION 15(a) OF THE 1940 ACT AND (2) CERTAIN
DISCLOSURE REQUIREMENTS UNDER VARIOUS RULES AND FORMS

TOUCHSTONE ETF TRUST
TOUCHSTONE STRATEGIC TRUST
TOUCHSTONE FUNDS GROUP TRUST
TOUCHSTONE VARIABLE SERIES TRUST

AND

TOUCHSTONE ADVISORS, INC.
303 Broadway, Suite 1100, Cincinnati, Ohio 45202

Please direct all communications regarding this Application to:

Meredyth A. Whitford-Schultz
303 Broadway, Suite 1100, Cincinnati, Ohio 45202

Stacy H. Louizos
Blank Rome, LLP

1271 Avenue of the Americas

New York, NY 10020

slouzos@blankrome.com

158196.00157/130244045v.2

*With a copy to:*

~~Clair E. Pagnano K&L Gates LLP~~
~~State Street Financial Center, One Lincoln Street,~~
~~Boston, MA 02111~~

Timothy Burdick
Ultimus Fund Solutions, LLC
80 Arkay Drive, Suite 110
Hauppauge, NY 11788
tburdick@ultimusfundsolutions.com

~~This Application~~Page 1 of 27 sequentially numbered pages (including exhibits) ~~contains 20 pages.~~
As filed with the Securities and Exchange Commission on January 24, 2023

2

158196.00157/130244045v.2

4

# UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

In the Matter of:
TWO ROADS
SHARED
TRUST
225 Pictoria
Drive, Suite 450
Cincinnati, OH
45246
HYPATIA
CAPITAL
MANAGEMENT
LLC
430 Park Avenue,
19th Floor
New York, NY
10022
TOUCHSTONE
ETF TRUST,
TOUCHSTONE
STRATEGIC
TRUST,
TOUCHSTONE
VARIABLE
SERIES TRUST,
TOUCHSTONE
FUNDS GROUP
TRUST, AND
TOUCHSTONE
ADVISORS,
INC. File No. 812-
[ ]
APPLICATION
FOR AN ORDER
OF EXEMPTION
PURSUANT TO
SECTION 6(c) OF
THE
INVESTMENT
COMPANY ACT
OF 1940, AS
AMENDED (THE
“1940 ACT”),
FROM: (1)
CERTAIN
PROVISIONS OF
SECTION 15(a)
OF THE 1940
ACT AND (2)
CERTAIN
DISCLOSURE
REQUIREMENTS
UNDER
VARIOUS
RULES AND
FORMS

Investment Company Act of 1940
File No. 812-

# I. INTRODUCTION

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158196.00157/130244045v.2

Touchstone ETF Trust, Touchstone Funds Group Trust, Touchstone Strategic Trust, and Touchstone Variable Series Two Roads Shared Trust (each, the “Trust” and together, the “Trusts”), each a registered open-end management investment company that offers one or more series of shares (each, a “Fund” and collectively, as applicable, the “Funds”), on its own behalf, and on behalf of each Fund of each Trust and Touchstone Advisors, Inc. (series, and Hypatia Capital Management LLC (the “Initial Adviser” or the “Adviser” and, together with the Trusts Trust, the “Applicants”),1 the investment adviser to the Hypatia Women CEO ETF2 (the “Fund”), hereby submit this application (the “Application”), to the Securities and Exchange Commission (the “Commission”) for an order of exemption pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”).3

Applicants request an order exempting them from Section 15(a) of the 1940 Act to permit the Adviser, subject to the approval of the board of trustees of each the Trust (the “Board” or “Trustees”)3, including a majority of those who are not “interested persons” of each the Trust or the Adviser, as defined in Section 2(a)(19) of the 1940 Act (the “Independent Trustees”), to take certain actions without obtaining shareholder approval as follows: (i) select investment subadvisers (each a “Subadviser” and collectively, the “Subadvisers”) for all or a portion of the assets of one or more of the Funds Fund pursuant to an investment subadvisory agreement with each Subadviser (each a “Subadvisory Agreement” and collectively, the “Subadvisory Agreements”); and (ii) materially amend Subadvisory Agreements with the Subadvisers.

As used herein, a “Subadviser” for a Fund is any investment adviser that enters into a Subadvisory Agreement with respect to a Fund. Applicants also apply for an order of the Commission under Section 6(c) of the 1940 Act exempting the Funds Fund from certain disclosure obligations under the following rules and forms: (i) Item 19(a)(3) of Form N-1A; (ii) Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8), and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (iii) Sections 6-07(2) (a), (b), and (c) of Regulation S-X under the Securities Act of 1933, as

2 The Commission previously granted an order to the Touchstone Strategic Trust, Touchstone Investment Trust, Touchstone Variable Series Trust, Touchstone Tax Free Trust, and the Adviser (the “Prior Applicants”), that

1 The term “Adviser” means (i) the Initial Adviser, (ii) its successors, and (iii) any entity controlling, controlled by, or under common control with, the Initial Adviser or its successors that serves as the primary adviser to a Subadvised Fund (as defined below). For the 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.

2 The Trust also offers other series not advised by the Adviser and the relief sought herein will not apply to such other series or investment advisers unless the Commission has granted an order of exemption to such series and investment advisers allowing them to rely on the relief granted herein.

3 The term “Board” also includes the board of trustees or directors of a future Subadvised Fund (as defined below), if different from the board of trustees of the Trust.

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permitted the Prior Applicants to enter into and materially amend subadvisory agreements with respect to non-affiliated subadvisers without shareholder approval and granted relief from certain disclosure requirements for certain Series of the Trusts. See In the Matter of Touchstone Investment Trust, Touchstone Strategic Trust, Touchstone Tax Free Trust, Touchstone Variable Series Trust, and Touchstone Advisors, Inc., Investment Company Act Release Nos. 25606 (June 6, 2002) (notice) and 25675 (July 2, 2002) (order) (the “Prior Order”). The requested order would supersede the Prior Order.

2

amended (the “Securities Act”). Similar to the order the Commission recently granted to Carillon Series Trust, et al.$^{4}$, in addition to Wholly-Owned and Non-Affiliated Subadvisers (both as defined below), the relief described in this Application would extend to any Subadviser that is an “affiliated person” (as such term is defined in Section 2(a)(3) of the 1940 Act) of the Fund or the Adviser for reasons other than serving as investment subadviser to one or more Funds (an “Affiliated Subadviser”).$^{5}$

$^{4}$ The Commission issued an order granting the expanded relief requested by the Application. Carillon Series Trust, et al., Investment Company Act Release No. 33464 (May 2, 2019) (Notice) and No. 33494 (May 29, 2019) (Order) (the “Carillon Order”). See also Touchstone Strategic Trust, et al., Investment Company Act Rel. No. 34790 (December 22, 2022) (Notice) and No. 34809 (January 18, 2023) (Order) (the “Touchstone Order”). See also Advisors Series Trust and Semper Capital Management, L.P., Investment Company Act Rel. No. 34500 (February 9, 2022) (Notice) and No. 34528 (March 8, 2022) (Order) (the “Semper Capital Management Order”). See also Investment Managers Series Trust and Hamilton Lane Advisors, L.L.C., Investment Company Act Rel. No. 34370 (September 1, 2021) (Notice) and No. 34385 (September 27, 2021) (Order) (the “Hamilton Lane Order”). See also Uncommon Investment Funds Trust and Uncommon Investment Advisors LLC, Investment Company Act Rel. No. 34331 (July 15, 2021) (Notice) and No. 34354 (August 11, 2021) (Order) (the “Uncommon Investment Funds Order”). See also New Age Alpha Trust and New Age Alpha Advisors, LLC, Investment Company Act Rel. No. 34322 (July 6, 2021) (Notice) and No. 34348 (August 3, 2021) (Order) (the “New Age Alpha Trust Order”). See also Listed Funds Trust, et al., Investment Company Act Rel. No. 34293 (June 2, 2021) (Notice) and No. 34321 (June 29, 2021) (Order) (“LFT Order”). See also Azzad Funds, et al., Investment Company Act Rel. No. 34241 (April 5, 2021) and No. 34261 (April 30, 2021) (“Azzad Order”). See also ETF Series Solutions and Distillate Capital Partners LLC, Investment Company Act Release No. 34169 (January 11, 2021) (Notice) and No. 34190 (February 8, 2021) (Order) (the “Distillate Capital Order”); Esoterica Thematic Trust and Esoterica Capital LLC, Investment Company Act Release No. 34161 (January 4, 2021) (Notice) and No. 34185 (February 1, 2021) (Order) (the “Esoterica Order”); ETF Series Solutions and Clearshares LLC, Investment Company Act Release No. 34144 (December 21, 2020) (Notice) and No. 34174 (January 19, 2021) (Order) (the “Clearshares Order”); OSI ETF Trust, et al., Investment Company Act Release No. 33678 (October 29, 2019) (Notice) and No. 33705 (November 26, 2019) (Order) (the “OSI ETF Order”); and Investment Managers Series Trust II, et al., Investment Company Act Release No. 34075 (October 27, 2020) (Notice) and No. 34104 (November 23, 2020) (Order) (the “Investment Managers Order”).

$^{5}$Section 2(a)(3) of the 1940 Act defines “affiliated person” as follows: “Affiliated person” of another person means (A) any person directly or indirectly owning, controlling, or holding with power to vote, 5 per centum or more of the outstanding voting securities of such other person; (B) any person 5 per centum or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other person; (C) any person directly or indirectly controlling, controlled by, or under common control with, such other person; (D) any officer, director, partner, copartner, or employee of such other person; (E) if such other person is an investment company, any investment adviser thereof

5

158196.00157/130244045v.2

Applicants request that the relief sought herein apply to Applicants, as well as to any existing or future registered open-end management investment company or series thereof that intends to rely on the requested order in the future and (i) is advised by the Adviser; (ii) uses the multi-manager structure described in this Application; and (iii) complies with the terms and conditions set forth herein (each, together with any Fund that currently uses the multi-manager structure described in this Application, a “Subadvised Fund” and collectively, the “Subadvised Funds”). Prior to relying on the order requested herein, and except as otherwise provided for herein with respect to certain existing Subadvised Funds, each existing Subadvised Fund will hold a shareholder meeting where shareholders will be asked to approve reliance on this order. Such existing Subadvised Fund will only rely on the order requested herein if the operation of such Subadvised Fund in the manner described in this Application is approved by a majority of the Subadvised Fund’s outstanding voting securities, as defined in the 1940 Act, and consistent with the requirements of Condition 1 herein.

Applicants are seeking this exemption primarily to enhance the ability of the Adviser and the Board to obtain for a Subadvised Fund the services of one or more Subadvisers believed by the Adviser and the Board to be particularly well suited for all or a portion of the assets of the Subadvised Fund, and to make material amendments to Subadvisory Agreements believed by the Adviser and the Board to be appropriate, without the delay and expense of convening special meetings of shareholders to approve the Subadvisory Agreements. Under this structure, the Adviser, in its capacity as investment adviser, would evaluate, allocate assets to and oversee the Subadvisers, and make recommendations about their hiring, termination and replacement to the Board, at all times subject to the authority of the Board. This structure is commonly referred to as a “multi-manager” structure. In addition, Applicants are seeking relief from certain disclosure requirements concerning fees paid to Subadvisers.

For the reasons discussed below, Applicants believe that the requested relief is appropriate, in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. Applicants believe that the Subadvised Funds Fund would be negatively impacted without the requested relief because of

or any member of an advisory board thereof; and (F) if such other person is an unincorporated investment company not having a board of directors, the depositor thereof.

All registered open-end investment companies that currently intend to rely on the requested order are named as Applicants. The Funds that currently are is, or that currently intends to be, a Subadvised Funds are identified in this Application. Any entity that relies on the requested order will do so only in accordance with the terms and conditions contained in this Application.

For purposes of this Application, the term “Subadviser” will also apply to any Subadviser to any wholly-owned subsidiary of a Subadvised Fund (each, a “Subsidiary” and collectively, the “Subsidiaries”). The Adviser will serve as investment adviser to each Subsidiary and may retain one or more Subadvisers to manage the assets of a Subsidiary. Applicants also request relief with respect to any Subadvisers who serve as Subadvisers to a Subsidiary. Where appropriate, Subsidiaries are also included in the term “Subadvised Funds.”

6

158196.00157/130244045v.2

delays in hiring or replacing Subadvisers and costs associated with the proxy solicitation to approve new or amended Subadvisory Agreements.

## II. BACKGROUND

### A. The TrustsTrust

3

The ~~Touchstone ETF Trust and Touchstone Funds Group Trust are~~Trust is registered under the 1940 Act as an open-end management investment ~~companies~~company organized as a Delaware statutory trust. ~~The Touchstone Strategic Trust and the Touchstone Variable Series Trust are registered under the 1940 Act as open-end management investment companies organized as Massachusetts business trusts.~~ The Adviser serves as “investment adviser,” as defined in Section 2(a)(20) of the 1940 Act, to ~~each~~the Fund. The Trust intends to operate the Fund under a multi-manager structure and which will be offered and sold pursuant to a registration statement on Form N-1A. The Board consists of ~~eight~~four (84) trustees, ~~six (6)~~each of whom ~~serve as~~serves as an Independent TrusteesTrustee.

The ~~Trusts~~Trust offers shares of multiple ~~Fund~~sseries, each with its own distinct investment objectives, policies, and restrictions. The Adviser has retained ~~Subadvisers~~a Subadviser to provide investment advisory services to the ~~Funds~~.~~7~~. The Fund will operate from its inception under a multi-manager structure.

### B. The Adviser

~~Touchstone Advisors, Inc.~~Hypatia Capital Management LLC, with its business address at ~~303 Broadway, Suite 1100, Cincinnati, Ohio 45202, is an Ohio corporation. The Adviser is~~430 Park Avenue, 19$^{th}$ Floor, New York, NY 10022, is a Delaware limited liability company registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and serves as investment adviser to the ~~Funds. The Adviser is a wholly-owned subsidiary of IFS Financial Services, Inc., which is a wholly-owned subsidiary of Western Southern Life Assurance Company. Western Southern Life Assurance Company is a wholly-owned subsidiary of The Western and Southern Life Insurance Company, which is a wholly-owned subsidiary of Western & Southern Financial Group, Inc. Western & Southern Financial Group Inc. is a wholly-owned~~

---

$^{7}$ Each Subadvised Fund discloses in its registration statement that it intends to operate pursuant to the order as requested in this Application, if granted. ~~There are certain Subadvised Funds that currently intend to rely on the requested order if received.~~ The prospectus for a Subadvised Fund will continue to include the disclosure required by Condition 2 below at all times subsequent to the approval required by Condition 1 below. If a Subadvised Fund has obtained shareholder approval to operate under the multi-manager structure described herein prior to the issuance of an order as requested in this Application, the prospectus for the Subadvised Fund will at all times following such shareholder approval contain appropriate disclosure that the Subadvised Fund has applied for exemptive relief to operate under the multi-manager structure described herein, including the ability to hire new Subadvisers and materially amend an existing Subadvisory Agreement without soliciting further shareholder vote.

7

158196.00157/130244045v.2

subsidiary of Western & Southern Mutual Holding Company (collectively, “Western and Southern”) Fund. The Adviser serves as investment adviser to each the Fund pursuant to an investment management advisory agreement with the Fund (each, an “Investment Management Advisory Agreement” and, together, the “Investment Management Advisory Agreements”). Any future Adviser also will be registered with the Commission as an investment adviser under the Advisers Act.

Consistent with the terms of a Subadvised Fund’s Investment Management Advisory Agreement, the Adviser may, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable Subadvised Fund (if required by applicable law), delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Fund to a Subadviser. The Adviser retains overall responsibility for the management and investment of the assets of all the Subadvised Funds Fund. With respect to each Subadvised Fund, the Adviser’s responsibilities include, for example, recommending the removal or replacement of Subadvisers, and allocating the portion of that Subadvised Fund’s assets to any given Subadviser and reallocating those assets as necessary from time to time. The Adviser evaluates, selects and recommends Subadvisers for the Subadvised Funds Fund, and monitors and reviews each Subadviser and its performance and its compliance with the applicable Subadvised Fund’s investment policies and restrictions.

Each Investment Management Advisory Agreement has been or will be approved by the Board, including a majority of the Independent Trustees, and by the shareholders of the relevant Fund in the manner required by Sections 15(a) and 15(c) of the 1940 Act. The terms of the Investment Management Advisory Agreements comply or will comply with Section 15(a) of the 1940 Act. Applicants are not seeking an exemption from the provisions of the 1940 Act with respect to the Investment Management Advisory Agreements. Pursuant to the terms of each Investment Management Advisory Agreement, the Adviser, subject to the oversight of the Board, has agreed or will agree to (i) provide continuous investment management for each Fund; (ii) determine the securities and other investments to be purchased, retained, sold or loaned by each Fund and the portion of such assets to be invested or held uninvested as cash; and (iii) exercise full discretion and act for each Fund in the same manner and with the same force and effect as such Fund itself might or could do with respect to purchases, sales, or other transactions and with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. The Adviser also is or will be responsible for effecting transactions for each Fund and selecting brokers or dealers to execute such transactions for each Fund. The Adviser will periodically review each Fund’s investment policies and strategies and, based on the need of a particular Fund, may recommend changes to the investment policies and strategies of the Fund for consideration by the Board.

Each Investment Management Advisory Agreement permits or will permit the Adviser to enter into Subadvisory Agreements with one or more Subadvisers. Pursuant to its authority under the Investment Management Advisory Agreements, the Adviser has entered or will enter into Subadvisory Agreements as described below under “The Subadvisers and the Subadvised

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FundsFund.” If the name of any Subadvised Fund contains the name of a subadviser, the name of the Adviser that serves as the primary adviser to the Subadvised Fund, or a trademark or trade name that is owned by or publicly used to identify that Adviser, will precede the name of the subadviser.

For its services to each Fund, the Adviser receives or will receive an investment managementadvisory fee from that Fund as specified in the applicable Investment ManagementAdvisory Agreement. The investment managementadvisory fees are calculated based on the average daily net assets of the particular Fund, calculated daily as of the close of business on each business day during the month.

C. The Subadvisers and the Subadvised FundsFund

Pursuant to the authority under the Investment ManagementAdvisory Agreements, the Adviser may enter into Subadvisory Agreements with various Subadvisers on behalf of the FundsFund. The Initial Adviser has entered into a Subadvisory Agreements with: (1) Fort Washington Investment Advisors, Inc. (“Fort Washington”), which serves as the Subadviser for the Touchstone Dividend Select ETF, Touchstone Strategic Income Opportunities ETF, Touchstone US Large Cap Focused ETF, and Touchstone Ultra Short Income ETF, each a series of the Touchstone ETF Trust; Touchstone Balanced Fund, Touchstone Bond Fund, Touchstone Common Stock Fund, and Touchstone Small Company Fund, each a series of the Touchstone Variable Series Trust; Touchstone Focused Fund, Touchstone Large Cap Focused Fund, Touchstone Strategic Income Opportunities Fund, Touchstone Balanced Fund, Touchstone Small Company Fund and Touchstone International Equity Fund, each a series of Touchstone Strategic Trust; Touchstone Ultra Short Duration Fixed Income Fund, Touchstone Active Bond Fund, Touchstone High Yield Fund, and Touchstone Dividend Equity Fund, each a series of Touchstone Funds Group Trust; (2) Westfield Capital Management Company, L.P. (“Westfield”), which serves as the Subadviser for the Touchstone Growth Opportunities Fund and Touchstone Mid Cap Growth Fund, each a series of the Touchstone Strategic Trust; (3) Barrow, Hanley, Mewhinney & Strauss, LLC d/b/a Barrow Hanley Global Investors (“Barrow”), which serves as the Subadviser for the Touchstone Value Fund, a series of the Touchstone Strategic Trust; (4) Bramshill Investments LLC (“Bramshill”), which serves as the Subadviser for the Touchstone Flexible Income Fund, a series of the Touchstone Strategic Trust; (5) Sands Capital Management, LLC (“Sands”), which serves as the Subadviser for the Touchstone Sands Capital Emerging Markets Growth Fund and the Touchstone Sands Capital International Growth Fund, each a series of the Touchstone Strategic Trust; Touchstone Sands Capital Select Growth Fund, a series of the Touchstone Funds Group Trust; (6) London Company of Virginia d/b/a The London Company (“London”), which serves as the Subadviser for the Touchstone Large Cap Fund, a series of the Touchstone Strategic Trust; Touchstone Small Cap Fund and Touchstone Mid Cap Fund, each a series of the Touchstone Funds Group Trust; (7) Rockefeller & Co., LLC (“Rockefeller”), which serves as the Subadviser for the Touchstone Global ESG Equity Fund (to be named the Touchstone Non-US ESG Equity Fund), a series of the Touchstone Strategic Trust; Touchstone International ESG Equity Fund, a series of the Touchstone Funds Group Trust; (8) DSM Capital Partners LLC (“DSM”), which serves as the Subadviser for the Touchstone Large Company Growth Fund and Touchstone International Growth Fund, each a series of the Touchstone Strategic Trust; (9) TOBAM S.A.S. (“TOBAM”), which serves as a Subadviser for the Touchstone Anti-Benchmark® U.S. Core Equity Fund, a series of the Touchstone

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Strategic Trust; Touchstone Anti-Benchmark International Core Equity Fund, a series of the Touchstone Funds Group Trust; (10) Sage Advisory Services, Ltd. Co. (“Sage”), which serves as a Subadviser for the Touchstone Core Municipal Bond Fund, a series of the Touchstone Strategic Trust; (11) Leeward Investments, LLC (“Leeward”), which serves as a Subadviser for the Touchstone Mid Cap Value Fund, and the Touchstone Small Cap Value Fund, each a series of the Touchstone Funds Group Trust; (12) EARNEST Partners, LLC (“Earnest”), which serves as the Subadviser for the Touchstone Impact Bond Fund, a series of the Touchstone Funds Group Trust; (13) Ares Capital Management II, LLC (“Ares”), which serves as the Subadviser for the Touchstone Ares Credit Opportunities Fund, a series of the Touchstone Funds Group Trust; (14) Wilshire Advisors, LLC (“Wilshire”), which serves as the Subadviser for the Touchstone Dynamic Allocation Fund, a series of the Touchstone Strategic Trust.

Agreement with Vident Investment Advisory, LLC (“Vident”). Vident Fort Washington is a wholly-owned subsidiary of Western & Southern and is therefore an affiliate of the Adviser. Westfield, Barrow, Bramshill, Sands, London, Rockefeller, DSM, TOBAM, Wilshire, Leeward, Earnest, Ares, and Sage, are each is considered a Non-Affiliated Subadviser (as defined below). The Adviser also may, in the future, enter into Subadvisory Agreements with other Subadvisers on behalf of these the Fund and other Subadvised Funds.

With respect to Fort Washington and any future Subadviser that is wholly owned by Western and Southern, Western and Southern has the Adviser or the Adviser’s parent company, the Adviser will have overall responsibility for the affairs of such Subadviser, and generally must will approve certain actions by that Subadviser that could materially affect the operations of Western and Southern the Adviser and its affiliates subsidiaries as a group. Fort Washington Vident has, and any future Subadviser will have, their own employees who would provide investment services to a Subadvised Fund.

The Subadvisers are Subadviser is, and any future Subadvisers will be, “investment advisers” to the Subadvised Funds Fund within the meaning of Section 2(a)(20) of the 1940 Act and provide, or will provide, investment management services to the Subadvised Funds Fund subject to, without limitation, the requirements of Sections 15(c) and 36(b) of the 1940 Act. In addition, the Subadvisers are Subadviser is, and any future Subadvisers will be, registered with the Commission as an investment adviser under the Advisers Act or not subject to such registration. The Adviser selects Subadvisers based on the Adviser’s evaluation of the Subadvisers’ skills in managing assets pursuant to particular investment styles, and recommends their hiring to the Board. In the future, the Adviser may employ multiple Subadvisers for one or more of the any Subadvised Funds Fund. In those instances, the Adviser would allocate and, as appropriate, reallocate a Subadvised Fund’s assets among the Subadvisers.

5

The Adviser engages or will engage in an ongoing analysis of the continued advisability of retaining a Subadviser and makes recommendations to the Board as needed. The Adviser also negotiates and renegotiates the terms of the Subadvisory Agreements with a Subadviser, including the fees paid to the Subadvisers, and makes recommendations to the Board as needed.

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The Subadvisers, subject to the oversight of the Adviser and the Board, determine or will determine the securities and other instruments to be purchased, sold or entered into by a Subadvised Fund’s portfolio or a portion thereof, and place orders with brokers or dealers that they select.$^{8}$ The Subadvisers keep or will keep certain records required by the 1940 Act and the Advisers Act to be maintained on behalf of the relevant Subadvised Fund, and assist or will assist the Adviser to maintain the Subadvised ~~Funds~~Fund’s compliance with the relevant requirements of the 1940 Act. The Subadvisers monitor or will monitor the respective Subadvised ~~Funds~~Fund’s investments and provide or will provide periodic reports to the Board and the Adviser. The Subadvisers also make or will make their officers and employees available to the Adviser and the Board to review the investment performance and investment policies of the Subadvised ~~Funds~~Fund.

The Subadvisory Agreements were or will be approved by the Board, including a majority of the Independent Trustees, in accordance with Sections 15(a) and 15(c) of the 1940 Act.

The terms of each Subadvisory Agreement comply or will comply fully with the requirements of Section 15(a) of the 1940 Act. Each Subadvisory Agreement will set forth the duties of the Subadviser and precisely describe the compensation paid to the Subadviser.

After an initial two-year period, the terms of the Subadvisory Agreements ~~will be~~are reviewed and renewed on an annual basis by the Board, including a majority of the Independent Trustees in accordance with Section 15(c) of the 1940 Act. The Board dedicates substantial time to review contract matters, including matters relating to Investment ~~Management~~Advisory Agreements and Subadvisory Agreements. With respect to ~~each~~the Subadvised Fund, the Board reviews comprehensive materials received from the Adviser, the Subadviser, independent third parties and independent counsel. Applicants will continue this annual review and renewal process for Subadvisory Agreements in accordance with the 1940 Act if the relief requested herein is granted by the Commission.

The Board reviews information provided by the Adviser and Subadvisers when it is asked to approve or renew Subadvisory Agreements. ~~A~~The Subadvised Fund discloses in its statutory prospectus that a discussion regarding the basis for the Board’s approval and renewal of the Investment ~~Management~~Advisory Agreements and any applicable Subadvisory Agreements is available in the Subadvised ~~Funds~~Fund’s annual or semi-annual report to shareholders for the relevant period in accordance with Item 10(a)(1)(iii) of Form N-1A. The information provided to the Board is maintained as part of the records of the respective Subadvised Fund pursuant to Rule 31a-1(b)(4) and Rule 31a-2 under the 1940 Act.

$^{8}$ For the purposes of this Application, a “Subadviser” also includes an investment subadviser that provides or will provide the Adviser with a model portfolio reflecting a specific strategy, style or focus with respect to the investment of all or a portion of a Subadvised Fund’s assets. The Adviser may use the model portfolio to determine the securities and other instruments to be purchased, sold, or entered into by a Subadvised Fund’s portfolio or a portion thereof, and place orders with brokers or dealers that it selects.

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Pursuant to each Subadvisory Agreement, the Adviser has agreed or will agree to pay each Subadviser a fee, based on the percentage of the assets of a Subadvised Fund, from the fee received by the Adviser from a Subadvised Fund under the Investment ~~Management~~Advisory Agreement.$^{9}$ Each Subadviser will bear its own expenses of providing investment management services to a Subadvised Fund.

### III. REQUEST FOR EXEMPTIVE RELIEF

Section 6(c) of the 1940 Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the 1940 Act, or any rule thereunder, if such relief 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 1940 Act. Applicants believe that the requested relief described in this Application meets this standard.

6---

### IV. APPLICABLE LAW AND DISCUSSION

#### A. Shareholder Vote

##### 1. Regulatory Background

Section 15(a) of the 1940 Act states, in part, that it is unlawful for any person to act as an investment adviser to a registered investment company “except pursuant to a written contract, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company.”

Section 2(a)(20) of the 1940 Act defines an “investment adviser” as any person who, pursuant to an agreement with such registered investment company or with an investment adviser of such registered investment company, is empowered to determine what securities or other property shall be purchased or sold by such registered investment company. Consequently, the Subadvisers are deemed to be within the definition of an “investment adviser” and, therefore, the Subadvisory Agreements are each subject to Section 15(a) of the 1940 Act to the same extent as the Investment ~~Management~~Advisory Agreements.

Therefore, Section 15(a) of the 1940 Act requires a majority of the outstanding voting securities of a Subadvised Fund to approve Subadvisory Agreements whenever the Adviser proposes to the Board to hire new Subadvisers for a Subadvised Fund. This provision would also

$^{9}$ A Subadvised Fund also may pay advisory fees directly to a Subadviser.

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require shareholder approval by a majority vote for any material amendment to Subadvisory Agreements.

The Subadvisory Agreements are required to terminate automatically and immediately upon their “assignment,” which could occur upon a change in control of the Subadvisers.$^{10}$

Rule 2a-6 under the 1940 Act provides that certain transactions that do not result in a “change in actual control or management of the investment adviser” to a registered investment company are not assignments for purposes of Section 15(a)(4) of the 1940 Act, thereby effectively providing an exemption from the shareholder voting requirements in Section 15(a) of the 1940 Act. Applicants do not believe that Rule 2a-6 under the 1940 Act provides a safe harbor to recommend, hire and terminate Subadvisers. Each Subadviser is expected to run its own day-to-day operations and each will have its own investment personnel. Therefore, in certain instances appointing certain Subadvisers could be viewed as a change in management and, as a result, an “assignment” within the meaning of the 1940 Act.

## 2. Requested Relief

Applicants seek relief to (i) select Subadvisers, including Affiliated Subadvisers, for all or a portion of the assets of a Subadvised Fund and enter into Subadvisory Agreements and (ii) materially amend Subadvisory Agreements with such Subadvisers, each subject to the approval of the Board, including a majority of the Independent Trustees, without obtaining shareholder approval required under Section 15(a) of the 1940 Act. Such relief would include, without limitation, the replacement or reinstatement of any Subadviser with respect to which a Subadvisory Agreement has automatically terminated as a result of an “assignment,” within the meaning of Section 2(a)(4) of the 1940 Act. Applicants believe that the relief sought should be granted by the Commission because (1) the Adviser either will operate a Subadvised Fund, or may operate ~~a~~the Subadvised Fund, in a manner that is different from conventional investment companies; (2) the relief will benefit shareholders by enabling the Subadvised ~~Funds~~Fund to operate in a less costly and more efficient manner; and (3) Applicants will consent to a number of conditions that adequately address the policy concerns of Section 15(a) of the 1940 Act, including conditions designed to ensure that shareholder interests are adequately protected through Board oversight.

### (a) Operations of the Trust

Section 15(a) was designed to protect the interests and expectations of a registered investment company’s shareholders by requiring they approve investment advisory contracts, including subadvisory contracts.$^{11}$ Section 15(a) is predicated on the belief that if a registered

$^{10}$ See Section 15(a)(4) of the 1940 Act. Section 2(a)(4) of the 1940 Act defines “assignment” as any direct or indirect transfer or hypothecation of a contract.

$^{11}$ See Section 1(b)(6) of the 1940 Act.

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investment company is to be managed by an investment adviser different from the investment adviser selected by shareholders at the time of the investment, the new investment adviser should be approved by shareholders.12 The relief sought in this Application is consistent with this public policy.

7

In the case of a traditional investment company, the investment adviser is a single entity that employs one or more individuals as portfolio managers to make the day-to-day investment decisions. The investment adviser may terminate or hire portfolio managers without board or shareholder approval and has sole discretion to set the compensation it pays to the portfolio managers. Alternatively, for subadvised funds, the investment adviser is not normally responsible for the day-to-day investment decisions and, instead, the investment adviser selects, oversees, and evaluates subadvisers who ultimately are responsible for the day-to-day investment decisions.

Primary responsibility for management of a Subadvised Fund's assets, including the selection and oversight of the Subadvisers, is vested in the Adviser, subject to the oversight of the Board. Applicants believe that it is consistent with the protection of investors to vest the selection and oversight of the Subadvisers in the Adviser in light of Applicants' multi-manager structure, as well as the shareholders' expectation that the Adviser is in possession of information necessary to select the most capable Subadvisers. The Adviser has the requisite expertise to evaluate, select and oversee the Subadvisers. The Adviser will not normally make day-to-day investment decisions for a Subadvised Fund.13

From the perspective of the shareholder, the role of the Subadvisers is substantially equivalent to the role of the individual portfolio managers employed by an investment adviser to a traditional investment company. The individual portfolio managers and the Subadvisers are each charged with the selection of portfolio investments in accordance with a Subadvised Fund's investment objectives and policies and have no broad supervisory, management or administrative responsibilities with respect to a Subadvised Fund. Shareholders expect the Adviser, subject to review and approval of the Board, to select a Subadviser who is in the best position to achieve a Subadvised Fund's investment objective. Shareholders also rely on the Adviser for the overall management of a Subadvised Fund and a Subadvised Fund's total investment performance.

Whenever required by Section 15(c) of the 1940 Act, the Board will request and the Adviser and each Subadviser will furnish such information as may be reasonably necessary for

12 Hearings on S. 3580 before a Subcomm. of the Senate Comm. on Banking and Currency, 76th Cong., 3d Sess. 253 (1940) (statement of David Schenker).

13 Although the Adviser will not normally make such day-to-day investment decisions, it may manage all or a portion of a Subadvised Fund.

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the Board to evaluate the terms of the Investment ~~Management~~Advisory Agreements and the Subadvisory Agreements. The information that is provided to the Board will be maintained as part of the records of the Subadvised ~~Funds~~Fund in accordance with the applicable recordkeeping requirements under the 1940 Act and made available to the Commission in the manner prescribed by the 1940 Act.

In addition, the Adviser and the Board will consider the reasonableness of the ~~Subadvisers'~~Subadviser's compensation with respect to each Subadvised Fund for which the ~~Subadvisers~~Subadviser will provide portfolio management services. Although only the Adviser's fee is payable directly by a Subadvised Fund, and the ~~Subadvisers' fees are~~Subadviser's fee is payable by the Adviser,$^{14}$ the ~~Subadvisers' fees~~Subadviser's fee directly bears on the amount and reasonableness of the Adviser's fee payable by a Subadvised Fund. Accordingly, the Adviser and the Board will analyze the fees paid to Subadvisers in evaluating the reasonableness of the overall arrangements.

With respect to oversight, Applicants note that the Adviser performs and will perform substantially identical oversight of all Subadvisers, regardless of whether they are affiliated with the Adviser. Such oversight is similar in many respects to how the Adviser would oversee its own internal portfolio management teams.

# (b) Lack of Economic Incentives

In allocating the management of Subadvised Fund assets between itself and one or more Subadvisers, Applicants acknowledge that the Adviser has an incentive to consider the benefit it will receive, directly or indirectly, from the fee paid for the management of those assets. However, Applicants believe that the protections afforded by the conditions set forth in this Application would prevent the Adviser from acting to the detriment of a Subadvised Fund and its shareholders. Applicants assert that the proposed conditions are designed to provide the Board with sufficient independence and the resources and information it needs to monitor and address conflicts of interest. In particular, the Adviser will provide the Board with any information that may be relevant to the Board's evaluation of material conflicts of interest present in any subadvisory arrangement when the Board is considering, with respect to a Subadvised Fund, a change in Subadviser or an existing Subadvisory Agreement as part of its annual review process. The Board will also have to make a separate finding, reflected in the Board minutes, that any change in Subadvisers or any renewal of an existing Subadvisory Agreement is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to it, does not involve a conflict of interest from which the Adviser, a Subadviser, or any officer or Trustee of ~~a~~the Subadvised Fund or any officer or board member of the Adviser derives an inappropriate advantage.

$^{14}$ A Subadvised Fund also may pay advisory fees directly to a Subadviser.

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Applicants note that, ~~consistent with~~ the relief ~~recently granted to Carillon, the relief Applicants~~ they are requesting would not be subject to two conditions that ~~were~~ have been customary in previous exemptive orders for similar relief ~~granted prior to Carillon~~,

8

including (i) restrictions on the ownership of interest in Subadvisers by trustees and officers of the Subadvised ~~Funds~~ Fund and the Adviser, and (ii) a requirement that the Adviser provide the Board with profitability reports each quarter. Applicants believe eliminating these conditions is appropriate with respect to the requested relief. As to the condition on ownership, Applicants assert that restricting ownership of interests in a Subadviser by trustees and officers would not be meaningful where the Adviser may itself own an interest in the Subadviser and the Subadviser may be selected for a Subadvised Fund under the requested relief.$^{15}$ As to the condition requiring quarterly profitability reports, Applicants note that the Board reviews and will continue to review profitability information at the time of any proposed Subadviser change (see condition 7) and as part of its annual review of each Subadvisory Agreement pursuant to Section 15(ee) of the 1940 Act.

Applicants also note that, consistent with the relief recently granted to Carillon, the relief Applicants are requesting would extend to Affiliated Subadvisers. Applicants note that, prior to Carillon Until the Carillon Order, the Commission has granted the requested relief solely with respect to certain Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief was has been premised on the fact that such a Subadviser serves in the same limited capacity to that of as an individual portfolio manager. Consistent with the relief granted to Carillon, Applicants believe this same rationale supports extending the requested relief to Affiliated Subadvisers. Moreover, Applicants note that, while the Adviser’s judgment in recommending a Subadviser can be affected by certain conflicts of interest or economic incentives, they do not warrant denying the extension of the requested relief to Affiliated Subadvisers. For one, the Adviser faces those conflicts and incentives in allocating fund assets between itself and a Subadviser, and across Subadvisers, as it has an interest in considering the benefit it will receive, directly or indirectly, from the fee the fund pays for the management of those assets. Moreover, the Adviser has employed and will continue to employ the same methodology to evaluate potential conflicts of interest, regardless of the affiliation between the Adviser and Subadvisers.

Subadviser. While the selection and retention of Affiliated Subadvisers by the Adviser potentially presents different or additional conflicts of interest than may be the case with Non-Affiliated or Wholly-Owned Subadvisers, the proposed terms and conditions of the requested relief are designed to address the potential conflicts of interest with respect to both those common to all types of Subadvisers and specific to Affiliated Subadvisers. In particular, Applicants believe that the proposed conditions are protective of shareholder interests by

$^{15}$ Any Trustee of the Board that has an ownership interest in a Subadviser would not be deemed an Independent Trustee under Section 2(a)(19) of the 1940 Act.

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ensuring the Board’s independence and providing the Board with the appropriate resources and information to monitor and address conflicts.

# (c) Benefits to Shareholders

Without the requested relief, when a new Affiliated Subadviser is retained by the Adviser on behalf of a Subadvised Fund, the shareholders of the Subadvised Fund are required to approve the Subadvisory Agreement. Similarly, if an existing Subadvisory Agreement with an Affiliated Subadviser is amended in any material respect, approval by the shareholders of the affected Subadvised Fund is required. Moreover, if a Subadvisory Agreement with an Affiliated Subadviser is “assigned” as a result of a change in control of the Subadviser, the shareholders of the affected Subadvised Fund will be required to approve retaining the existing Subadviser. In all these instances the need for shareholder approval requires a Subadvised Fund to call and hold a shareholder meeting, create and distribute proxy materials, and solicit votes from shareholders on behalf of the Subadvised Fund, and generally necessitates the retention of a proxy solicitor. This process is time-intensive, expensive and slow, and, in the case of a poorly performing Subadviser or one whose management team has parted ways with the Subadviser, potentially harmful to a Subadvised Fund and its shareholders.

As noted above, shareholders investing in a Fund that has a Subadviser are effectively hiring the Adviser to manage a Subadvised Fund’s assets by overseeing, monitoring and evaluating the Subadviser rather than by the Adviser hiring its own employees to oversee the Subadvised Fund. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of a Subadvised Fund are paying the Adviser - the selection, oversight and evaluation of Subadvisers, including Affiliated Subadvisers - without incurring unnecessary delays or expenses is appropriate and in the interest of a Subadvised Fund’s shareholders and will allow such Subadvised Fund to operate more efficiently. Within this structure, the Adviser is in the better position to make an informed selection and evaluation of a Subadviser than are individual shareholders. Without the delay inherent in holding shareholder meetings (and the attendant difficulty in obtaining the necessary quorums), a Subadvised Fund will be able to hire or replace Affiliated Subadvisers more quickly and at less cost, when the Board, including a majority of the Independent Trustees, and the Adviser believe that a change would benefit a Subadvised Fund and its shareholders.

Prior to Until the Carillon Order, the Commission has previously granted the requested relief solely with respect to certain Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief has permitted Subadvised Funds to avoid the time-intensive and expensive shareholder solicitation process with respect to hiring or making a material amendment to a Subadvisory Agreement with respect to such subadvisers. As discussed above, ~~and consistent with the relief recently granted to Carillon,~~ Applicants believe the same rationale supports extending the requested relief

9

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to Affiliated Subadvisers as well, and while Affiliated Subadvisers may give rise to different or additional conflicts of interests, the proposed terms and conditions, including the enhanced oversight by the Board, address such potential conflicts. Moreover, treating all Subadvisers equally under the requested relief might help avoid the selection of Subadvisers potentially being influenced by considerations regarding the applicable regulatory requirements (i.e., whether a shareholder vote is required) and the associated costs and delays.$^{16}$

If the relief requested is granted, each Investment ~~Management~~Advisory Agreement will continue to be fully subject to Section 15(a) of the 1940 Act. Moreover, the relevant Board will consider the Investment ~~Management~~Advisory Agreements and Subadvisory Agreements in connection with its annual contract renewal process under Section 15(c) of the 1940 Act, and the standards of Section 36(b) of the 1940 Act will be applied to the fees paid to each Subadviser.

### 3. Shareholder Notification

With the exception of the relief requested in connection with Aggregate Fee Disclosure (as defined below), the prospectus and statement of additional information for each Subadvised Fund will include all information required by Form N-1A concerning the Subadvisers, including Affiliated Subadvisers, if the requested relief is granted. If a new Subadviser is retained, an existing Subadviser is terminated, or a Subadvisory Agreement is materially amended, a Subadvised Fund’s prospectus and statement of additional information will be supplemented promptly pursuant to Rule 497(e) under the Securities Act.

If new Subadvisers are hired, the Subadvised ~~Funds~~Fund will inform shareholders of the hiring of a new Subadviser pursuant to the following procedures (“Modified Notice and Access Procedures”): (a) within 90 days after a new Subadviser is hired for any Subadvised Fund, that Subadvised Fund will send its shareholders either a Multi-manager Notice or a Multi-manager Notice and Multi-manager Information Statement;$^{17}$ and (b) a Subadvised Fund will make the

$^{16}$ The Adviser is responsible for selecting Subadvisers in the best interests of the Subadvised Funds, regardless of the costs or timing constraints that may be associated with the process of seeking shareholder approval of Subadvisory Agreements and material amendments thereto.

$^{17}$ A “Multi-manager Notice” will be modeled on a Notice of Internet Availability as defined in Rule 14a-16 under the Exchange Act, and specifically will, among other things: (a) summarize the relevant information regarding the new Subadviser (except as modified to permit Aggregate Fee Disclosure as defined in this Application); (b) inform shareholders that the Multi-manager Information Statement is available on a website; (c) provide the website address; (d) state the time period during which the Multi-manager Information Statement will remain available on that website; (e) provide instructions for accessing and printing the Multi-manager Information Statement; and (f) instruct the shareholder that a paper or email copy of the Multi-manager Information Statement may be obtained, without charge, by contacting a Subadvised Fund.

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Multi-manager Information Statement available on the website identified in the Multi-manager Notice no later than when the Multi-manager Notice (or Multi-manager Notice and Multi-manager Information Statement) is first sent to shareholders, and will maintain it on that website for at least 90 days. Under the requested relief, a Subadvised Fund would not furnish a Multi-manager Information Statement to shareholders when an existing Subadvisory Agreement is materially modified. In the circumstances described in this Application, a proxy solicitation to approve the appointment of new Subadvisers provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Moreover, as indicated above, the Board would comply with the requirements of Sections 15(a) and 15(c) of the 1940 Act before entering into or amending Subadvisory Agreements.

Prior to any Subadvised Fund relying on the requested relief in this Application, the Board, including its Independent Trustees, will have approved its operations as described herein. Additionally, the shareholders of the applicable Subadvised Fund have approved, or will approve, its operation as described herein by a vote of a majority of the outstanding voting securities, within the meaning of the 1940 Act, or by the sole shareholder prior to a Subadvised Fund offering its shares.$^{18}$

# ---B. Fee Disclosure

# 1. Regulatory Background

Form N-1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N-1A requires a registered investment company to disclose in its statement of additional information the method of computing the “advisory fee payable” by the investment company with respect to each investment adviser, including the total dollar amounts that the investment company “paid to the adviser (aggregated with amounts paid to affiliated advisers, if any), and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years.”

A “Multi-manager Information Statement” will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Exchange Act for an information statement, except as modified by the requested order to permit Aggregate Fee Disclosure. Multi-manager Information Statements will be filed with the Commission via the EDGAR system.

$^{18}$ If a Subadvised Fund has obtained shareholder approval to operate pursuant to an exemptive order that would permit it to operate in a multi-manager structure where the Adviser would enter into or amend Subadvisory Agreements only with respect to Wholly-owned and Non-Affiliated Subadvisers subject to Board approval but without obtaining shareholder approval and has met all other terms and conditions of the requested order, the Subadvised Fund may rely on the applicable part of the order requested in this Application (i.e., hiring, amending Subadvisory Agreements with, and including Aggregate Fee Disclosure (as defined below) in response to the disclosure requirements discussed herein with respect to Wholly-Owned and Non-Affiliated Sub-Advisers.

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Rule 20a-1 under the 1940 Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the Exchange Act. Item 22 of Schedule 14A sets forth the information that must be included in a registered investment company's proxy statement. Item 22(c)(1)(ii) requires a proxy statement for a shareholder meeting at which action will be taken on an investment advisory agreement to describe the terms of the advisory contract, 'including the rate of compensation of the investment adviser.' Item 22(c)(1)(iii) requires a description of the 'aggregate amount of the investment adviser's fees and the amount and purpose of any other material payments' by the investment company to the investment adviser, or any affiliated person of the investment adviser during the fiscal year. Item 22(c)(8) requires a description of 'the terms of the contract to be acted upon, and, if the action is an amendment to, or a replacement of, an investment advisory contract, the material differences between the current and proposed contract.' Finally, Item 22(c)(9) requires a proxy statement for a shareholder meeting at which a change in the advisory fee will be sought to state (i) the aggregate amount of the investment adviser's fee during the last year; (ii) the amount that the adviser would have received had the proposed fee been in effect; and (iii) the difference between (i) and (ii) stated as a percentage of the amount in (i). Together, these provisions may require a Subadvised Fund to disclose the fees paid to a Subadviser in connection with shareholder action with respect to entering into, or materially amending, an advisory agreement or establishing, or increasing, advisory fees.

Regulation S-X sets forth the requirements for financial statements required to be included as part of a registered investment company's registration statement and shareholder reports filed with the Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require a registered investment company to include in its financial statement information about the investment advisory fees. These provisions could require a Subadvised Fund's financial statements to disclose information concerning fees paid to a Subadviser. The exemption from Regulation S-X requested below would permit a Subadvised Fund to include only the Aggregate Fee Disclosure (as defined below); all other items required by Sections 6-07(2)(a), (b) and (c) of Regulation S-X will be disclosed.

## 2. Requested Relief

Applicants seek relief to permit ~~each~~the Subadvised Fund to disclose (as a dollar amount and a percentage of ~~a~~the Subadvised Fund's net assets) (a) the aggregate fees paid to the Adviser and any Wholly-Owned Subadvisers; and (b) the aggregate fees paid to Affiliated and Non-Affiliated Subadvisers (collectively, the 'Aggregate Fee Disclosure') in lieu of disclosing the fees that may be required by Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(2)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, and Section 6-07(2)(a), (b) and (c) of Regulation S-X.$^{19}$

$^{19}$ As used herein, a 'Wholly-Owned Subadviser' is any investment adviser that is (1) an indirect or direct 'wholly-owned subsidiary' (as such term is defined in Section 2(a)(43) of the 1940 Act) of the Adviser, (2) a 'sister company' of the Adviser that is an indirect or direct 'wholly-owned subsidiary' of the same company that indirectly or directly wholly owns the Adviser (the Adviser's 'parent company'), or (3) a

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The Aggregate Fee Disclosure would be presented as both a dollar amount and as a percentage of the Subadvised Fund’s net assets. Applicants believe that the relief sought in this Application should be granted because the Adviser intends to operate the Subadvised FundsFund under a multi-manager structure. As a result, disclosure of the individual fees that the Adviser pays to the Subadvisers would not serve any meaningful purpose.

As noted above, the Adviser may operate the Subadvised FundsFund in a manner different from a traditional investment company. By investing in a Subadvised Fund, shareholders are hiring the Adviser to manage the Subadvised Fund’s assets by overseeing, evaluating, monitoring, and recommending Subadvisers rather than by hiring its own employees to manage the assets directly. The Adviser, under the oversight of the Board, is responsible for overseeing the Subadvisers and recommending their hiring and replacement. In return, the Adviser receives an advisory fee from each Subadvised Fund.

Pursuant to each Subadvisory Agreement, the Adviser has agreed or will agree to pay each Subadviser a fee, based on the percentage of the assets of a Subadvised Fund, from the fee received by the Adviser from a Subadvised Fund under the Investment Advisory Agreement. Each Subadviser will bear its own expenses of providing

11

Pursuant to each investment management Agreement, the Adviser compensates the Subadvisers directly services to a Subadvised Fund.20 Disclosure of the individual fees that the Adviser would pay to the Subadvisers does not serve any meaningful purpose since investors pay the Adviser to oversee, monitor, evaluate and compensate the Subadvisers. Applicants contend that the primary reasons for requiring disclosure of individual fees paid to Subadvisers are to inform shareholders of expenses to be charged by a particular Subadvised Fund and to enable shareholders to compare the fees to those of other comparable investment companies. Applicants believe that the requested relief satisfies these objectives because the Subadvised Fund’s overall advisory fee will be fully disclosed and, therefore, shareholders will know what a Subadvised Fund’s fees and expenses are and will be able to compare the advisory fees a Subadvised Fund is charged to those of other investment companies.

Indeed, in a more conventional arrangement, requiring the Subadvised FundsFund to disclose the fees negotiated between the Adviser and the Subadvisers would be the functional equivalent of requiring single adviser investment companies to disclose the salaries of individual

parent company of the Adviser. A “Non-Affiliated Subadviser” is any investment adviser that is not an “affiliated person” (as defined in the 1940 Act) of a Fund or the Adviser, except to the extent that an affiliation arises solely because the Subadviser serves as a subadviser to one or more Funds. Section 2(a)(43) of the 1940 Act defines “wholly-owned subsidiary” of a person as a company 95 per centum or more of the outstanding voting securities of which are, directly or indirectly, owned by such a person.

20 A Subadvised Fund also may pay advisory fees directly to a Subadviser.

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portfolio managers employed by that investment adviser. In the case of a traditional investment company, disclosure is made of the compensation paid to the investment adviser, but shareholders are not told or asked to vote on the salary paid by the investment adviser to individual portfolio managers. Similarly, in the case of the Subadvised FundsFund, the shareholders will have chosen to employ the Adviser and to rely upon the Adviser's expertise in monitoring the Subadvisers, recommending the Subadvisers' selection and termination (if necessary), and negotiating the compensation of the Subadvisers. There are no policy reasons that require shareholders of the Subadvised FundsFund to be informed of the individual Subadviser's fees any more than shareholders of a traditional investment company (single investment adviser) would be informed of the particular investment adviser's portfolio managers' salaries.21

The requested relief would benefit shareholders of the Subadvised FundsFund because it would improve the Adviser's ability to negotiate the fees paid to Subadvisers, including Affiliated Subadvisers. The Adviser's ability to negotiate with the various Subadvisers would be adversely affected by public disclosure of fees paid to each Subadviser. If the Adviser is not required to disclose the Subadvisers' fees to the public, the Adviser may be able to negotiate rates that are below a Subadviser's "posted" amounts as the rate would not be disclosed to the Subadviser's other clients. Moreover, if one Subadviser is aware of the advisory fee paid to another Subadviser, the Subadviser would likely take it into account in negotiating its own fee.

Prior to Until the Carillon Order, the Commission has previously granted the requested relief solely with respect to Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief only permitted the disclosure of aggregate fees paid to Wholly-Owned and Non-Affiliated Subadvisers and required disclosure of individual fees paid to Affiliated Subadvisers. If the requested relief under Section 15(a) of the 1940 Act is granted to extend to Affiliated Subadvisers, consistent with the relief recently granted to Carillon, Applicants believe it is appropriate to permit each Subadvised Fund to disclose only aggregate fees paid to Affiliated Subadvisers for the same reasons that similar relief has been granted to Wholly-Owned and Non-Affiliated NonAffiliated Subadvisers, as discussed above.

C. Precedent

21 The relief would be consistent with the Commission's disclosure requirements applicable to fund portfolio managers that were previously adopted. See Investment Company Act Release No. 26533 (Aug. 23, 2004). Under these disclosure requirements, a fund is required to include in its statement of additional information, among other matters, a description of the structure of and the method used to determine the compensation structure of its "portfolio managers." Applicants state that with respect to each Subadvised Fund, the statement of additional information will describe the structure of, and method used to determine, the compensation received by each portfolio manager employed by any Subadviser. In addition to this disclosure with respect to portfolio managers, Applicants state that with respect to each Subadvised Fund, the statement of additional information will describe the structure of, and method used to determine, the compensation received by each Subadviser.

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Applicants note that substantially identical relief was granted by the Commission in the Carillon Order, the Touchstone Order, the Semper Capital Management Order, the Hamilton Lane Order, the Uncommon Investment Funds Order, New Age Alpha Trust Order, the LFT Order, the Azzad Order, the Distillate Capital Order, the Esoterica Order, the Clearshares Order, the OSI ETF Order, and the Investment Managers Order. Applicants note that substantially the same exemptions requested herein with respect to relief from Section 15(a) and relief from the disclosure requirements of the rules and forms discussed herein for Subadvisers, including Affiliated Subadvisers, have been granted previously by the Commission with respect to Wholly-Owned and Non-Affiliated Subadvisers. See, e.g., Natixis Funds Trust I, et al., Investment Company Act Release Nos. 33265 (October 5, 2018) (notice) and 33287 (October 31, 2018) (order); Advisors Asset Management, Inc. and ETF Series Solutions, Investment Company Act Release Nos. 33169 (July 24, 2018) (notice) and 33207 (August 21, 2018) (order); TriLine Index Solutions, LLC and ETF Series Solutions, Investment Company Act Release Nos. 33159 (July 11, 2018) (notice) and 33192 (August 6, 2018) (order); SL Advisors, LLC and ETF Series Solutions, Investment Company Act Release Nos. 33158 (July 11, 2018) (notice) and 33193 (August 6, 2018) (order); DMS ETF Trust I, et al., Investment Company Act Release Nos. 33156 (July 10, 2018) (notice) and 33196 (August 7, 2018) (order).

12

For the reasons set forth above, Applicants believe that the relief sought would be appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.

## V. Conditions

Applicants agree that any order of the Commission granting the requested relief will be subject to the following conditions:

(1) Before a Subadvised Fund may rely on the order requested herein, the operation of the Subadvised Fund in the manner described in this Application will be, or has been, approved by a majority of the Subadvised Fund's outstanding voting securities as defined in the 1940 Act, or, in the case of a Subadvised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Subadvised Fund's shares are offered to the public.

(2) The prospectus for each Subadvised Fund will disclose the existence, substance and effect of any order granted pursuant to the Application. In addition, each Subadvised Fund will hold itself out to the public as employing the multi-manager structure described in this Application. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Subadvisers and recommend their hiring, termination, and replacement.

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158196.00157/130244045v.2

(3) The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Fund's assets, and subject to review and oversight of the Board, will (i) set the Subadvised Fund's overall investment strategies, (ii) evaluate, select, and recommend Subadvisers for all or a portion of the Subadvised Fund's assets, (iii) allocate and, when appropriate, reallocate the Subadvised Fund's assets among Subadvisers, (iv) monitor and evaluate the Subadvisers' performance, and (v) implement procedures reasonably designed to ensure that Subadvisers comply with the Subadvised Fund's investment objective, policies and restrictions.

(4) Subadvised Fund will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures.

(5) At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.

(6) Independent Legal Counsel, as defined in Rule 0-1(a)(6) under the 1940 Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.

(7) Whenever a Subadviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser.

(8) The Board must evaluate any material conflicts that may be present in a subadvisory arrangement. Specifically, whenever a subadviser change is proposed for a Subadvised Fund ("Subadviser Change") or the Board considers an existing Subadvisory Agreement as part of its annual review process ("Subadviser Review"):

(a) the Adviser will provide the Board, to the extent not already being provided pursuant to Section 15(c) of the 1940 Act, with all relevant information concerning:
(i) any material interest in the proposed new Subadviser, in the case of a Subadviser Change, or the Subadviser in the case of a Subadviser Review, held directly or indirectly by the Adviser or a parent or sister company of the Adviser, and any material impact the proposed Subadvisory Agreement may have on that interest;
(ii) any arrangement or understanding in which the Adviser or any parent or sister company of the Adviser is a participant that (A) may have had a material effect on the proposed Subadviser Change or Subadviser Review, or (B) may be materially affected by the proposed Subadviser Change or Subadviser Review;

13

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(iii) any material interest in a Subadviser held directly or indirectly by an officer or Trustee of the Subadvised Fund, or an officer or board member of the Adviser (other than through a pooled investment vehicle not controlled by such person); and

(iv) any other information that may be relevant to the Board in evaluating any potential material conflicts of interest in the proposed Subadviser Change or Subadviser Review.

(b) the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the Subadviser Change or continuation after Subadviser Review is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to the Board, does not involve a conflict of interest from which the Adviser, a Subadviser, any officer or Trustee of the Subadvised Fund, or any officer or board member of the Adviser derives an inappropriate advantage.

(9). Each Subadvised Fund will disclose in its registration statement the Aggregate Fee Disclosure.

(10). In the event that the Commission adopts a rule under the 1940 Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.

(11). Any new Subadvisory Agreement or any amendment to an existing Investment Advisory Agreement or Subadvisory Agreement that directly or indirectly results in an increase in the aggregate advisory fee rate payable by the Subadvised Fund will be submitted to the Subadvised Fund's shareholders for approval.

## VI. PROCEDURAL MATTERS

All of the requirements for execution and filing of this Application on behalf of Applicants have been complied with in accordance with the applicable organizational documents of Applicants, and the undersigned officers of Applicants are fully authorized to execute this Application. The certifications of the Applicants, including the resolutions of the Trust authorizing the filing of this Application Board are attached as Exhibits 1 and 2A-1 through A-2 to this Application in accordance with the requirements of Rule 0-2(c)(1) under the 1940 Act and the verifications required by Rule 0-2(d) under the 1940 Act are attached as Exhibits 3 and 4B-1 through B-2 to this Application. In accordance with the requirements for a request for expedited review of this application, marked copies of two recent applications seeking the same relief as Applicants that are substantially identical as required by Rule 0-5(e) of the Act are attached as Exhibits C.

Pursuant to the requirements of Rule 0-2(f) under the 1940 Act, Applicants state that their each Applicant hereby states that its address is 303 Broadway, Suite 1100, Cincinnati, Ohio 45202 and that

25

158196.00157/130244045v.2

Two Roads Shared Trust
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246

Hypatia Capital Management LLC
430 Park Avenue, 19th Floor
New York, NY 10022

Copies of all notices, orders, oral or written communications or questions regarding this Application should be directed to the individuals and addresses indicated on the first page of this Application.

Stacy H. Louizos
Blank Rome, LLP
1271 Avenue of the Americas
New York, NY 10020
slouizos@blankrome.com
Phone: 212.885.5147

Applicants desire that the Commission issue the requested order pursuant to Rule 0-5 under the 1940 Act without conducting a hearing.

## VII. CONCLUSION

For the foregoing reasons, Applicants respectfully request that the Commission issue an order under Section 6(c) of the 1940 Act granting the relief requested in the Application. Applicants submit that the requested exemption is necessary or appropriate in the public interest, consistent with the protection of investors, and consistent with the purpose fairly intended by the policy and provisions of the 1940 Act.

[Signature Page Follows]

IN WITNESS WHEREOF, each Applicant has caused this Application to be duly executed as of the date set forth below:

TWO ROADS SHARED TRUST

By: /s/ James Colantino

Name: James Colantino

Title: President

Date: January 24, 2023

HYPATIA CAPITAL MANAGEMENT LLC

By: /s/ John Grenawalt

Name: John Grenawalt

Title: Chief Operating Officer

Date: January 24, 2023

26

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# **EXHIBITS TO APPLICATION**

The following materials are made a part of the Application and are attached hereto:

| Designation | Document |
| --- | --- |
| Exhibits A-1 through A-2 | Authorizations |
| Exhibits B-1 through B-2 | Verifications |
| Exhibit C | Rule 0-5(e)(3) Comparisons |

14

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158196.00157/130244045v.2

Applicants have caused this Application to be duly signed on their behalf on the 15th day of November, 2022.

TOUCHSTONE ETF TRUST

By: /s/ E. Blake Moore, Jr.

Name: E. Blake Moore, Jr.

Title: President

TOUCHSTONE STRATEGIC TRUST

By: /s/ E. Blake Moore, Jr.

Name: E. Blake Moore, Jr.

Title: President

TOUCHSTONE FUNDS GROUP TRUST

By: /s/ E. Blake Moore, Jr.

Name: E. Blake Moore, Jr.

Title: President

TOUCHSTONE VARIABLE SERIES TRUST

By: /s/ E. Blake Moore, Jr.

Name: E. Blake Moore, Jr.

Title: President

TOUCHSTONE ADVISORS, INC.

By: /s/ E. Blake Moore, Jr.

Name: E. Blake Moore, Jr.

Title: Chief Executive Officer

15

# EXHIBIT INDEX A-1

# AUTHORIZATION OF TWO ROADS SHARED TRUST

# A. Certifications

1. Certification of Touchstone ETF Trust, Touchstone Strategic Trust, Touchstone Funds Group Trust, and Touchstone Variable Series Trust
2. Certification of Touchstone Advisors, Inc.

# B. Verifications

1. Verification of Touchstone ETF Trust, Touchstone Strategic Trust, Touchstone Funds Group Trust, and Touchstone Variable Series Trust
2. Verification of Touchstone Advisors, Inc.

16

Exhibit 1

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### Certifications

The undersigned, Timothy Burdick, hereby certifies that he is the duly elected President of Touchstone ETF Trust, Touchstone Strategic Trust, Touchstone Funds Group Trust, and Touchstone Variable Series Trust (collectively, the “TrustsSecretary of Two Roads Shared Trust (the “Trust”); that, with respect to the attached Application for exemption from the provisions of the Investment Company Act of 1940 (the “1940 Act”), the rules and forms thereunder and any amendments thereto (such application along with any amendments, the “Application”), all actions necessary to authorize the execution and filing of the Application under the Amended Agreement and Declaration of Trust and Amended and Restated By-Laws of the TrustsTrust have been taken and the person signing and filing the Application on behalf of the Trust is fully authorized to do so; and that the following is a complete, true and correct copy of the resolutions duly adopted by the Board of Trustees of the Trusts on June 8, 2022Trust at a meeting held on December 20-21, 2022, in accordance with the Amended and Restated By-Laws of the TrustsTrust and that such resolutions have not been revoked, modified, rescinded, or amended and are in full force and effect:

RESOLVED, that the appropriate officers of Touchstone Advisors, Inc. (“Touchstone” or the “Advisor”) be, and are hereby the Trust are authorized to execute and file an expanded Manager of Managers exemptive order on behalf of the Trust an Application, in a form satisfactory to such officers and counsel to the Trust, and any subsequent amendments thereto as required, with the Securities and Exchange Commission on behalf of each future series of each Trust, for an order exempting the Trust the Advisor from pursuant to Section 15-6(ac) of the Investment Company Act of 1940, as amended (the “1940 Act”), exempting the Trust and Hypatia Capital Management LLC (the “Adviser”) from the provisions of Section 15(a) of the 1940 Act”), as well as from certain disclosure requirements in rule 20a-1 under the 1940 Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934 (“1934 Act”), and sections 6-07(2)(a), (b), and (c) of Regulation S-X, or from any other provision of the 1940 Act, 1934 Act, or rules thereunder as may be deemed necessary or advisable upon the advice of counsel to the Trust that will allow the Advisor to permit the Adviser, subject to the supervision of the Trust’s Board of Trustees and certain conditions required by the U.S. Securities and Exchange Commission (“Commission”) and set forth in the Application for exemptive relief, to enter into and materially amend, for any series of the Trust managed by the Adviser now or hereafter existing that operates consistent with the terms of the exemptive Application, investment sub-advisory agreements with sub-advisors without subadvisers, including non-affiliated subadvisers, wholly-owned subadvisers, and affiliated subadvisers, with the approval of the Board, but without obtaining shareholder approval, in a form satisfactory to such officers and counsel to each Trust, the execution and filing of such application and any amendment thereto to be conclusive evidence of the Board’s authorization hereby; and of the applicable series.

FURTHER RESOLVED, that the appropriate Touchstone officers be, and hereby are, authorized, empowered, and directed to take all actions, prepare and file such registration statements or amendments thereto, and to execute all documents necessary to give full effect to the foregoing resolution in such manner or such forms as the officer or officers shall approve in his, her, or their discretion and with advise of counsel to each Trust, in each case as conclusively evidenced by his, her, or their actions thereby or signatures thereon; and

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# TWO ROADS SHARED TRUST

By: /s/ Timothy Burdick

Name: Timothy Burdick

Title: Secretary

Date: January 24, 2023

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158196.00157/130244045v.2

**FURTHER RESOLVED**, that all actions previously taken by the appropriate Touchstone officers to prepare and file such registration statements or amendments thereto, and to execute all documents necessary to give full effect to the foregoing resolution be, and hereby are, approved, authorized and deemed ratified.
Dated: November 15, 2022

By: /s/ E. Blake Moore, Jr.
Name: E. Blake Moore, Jr.
Its: President

17

# EXHIBIT 2A-2
AUTHORIZATION OF HYPATIA CAPITAL MANAGEMENT LLC

# **Certification**

The undersigned, John Grenawalt, do hereby certify that he is I am the duly elected appointed Chief Executive Operating Officer of Touchstone Advisors, Inc. Hypatia Capital Management LLC (the “Adviser”); that, with respect to the attached Application for exemption, exemptive relief from the certain provisions of the Investment Company Act of 1940, rules and forms thereunder and any amendments thereto (such application along with any amendments, the “Application”), all actions necessary to authorize the execution and filing of the Application under the Adviser’s organizational documents have been taken and that as Chief Executive Officer of the Adviser, he is I am fully authorized to execute sign and file the Application on behalf of the Adviser; and that the Adviser has adopted the following resolution on December 20, 2022, in accordance with its organizational documents:
Dated: November 15, 2022

By: /s/ E. Blake Moore, Jr.
Name: E. Blake Moore, Jr.
Its: Chief Executive Officer

RESOLVED, that that the appropriate officers of the Adviser be, and hereby are, authorized to file on behalf of the Adviser an Application with the Securities and Exchange Commission for an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (“1940 Act”), exempting Two Roads Shared Trust (“Trust”) and the Adviser from: (i) the provisions of Section 15(a) of the 1940 Act to permit the Adviser, subject to the supervision of the Trust’s Board of Trustees, to appoint new subadvisers to a Trust series for which the Adviser serves as investment adviser (each a “Subadvised Fund”) and to make material changes to the subadvisory agreements with subadvisers to the Subadvised Fund without obtaining shareholder approval of the applicable Subadvised Series; and (ii) the disclosures required pursuant to Item 19(a)(3) of Form N-IA, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A of Schedule 14A, and Sections 6-07(2) (a)-(c) of Regulation S-X relating to subadviser compensation.

HYPATIA CAPITAL MANAGEMENT LLC

31

158196.00157/130244045v.2

By: /s/ John Grenawalt
Name: John Grenawalt
Title: Chief Operating Officer
Date: January 24, 2023

18

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158196.00157/130244045v.2

# EXHIBIT 3B-1
VERIFICATION TWO ROADS SHARED TRUST

The undersigned states that he has duly executed the attached Application for an Exemptive Order dated November 15, 2022 for and on behalf of Touchstone ETF Trust, Touchstone Strategic Trust, Touchstone Funds Group Trust, and Touchstone Variable Series Trust (collectively, the “Trusts” dated January 24, 2023 for an order pursuant to Section 6(c) of the Investment Company Act of 1940 (“1940 Act”), on behalf of Two Roads Shared Trust (the “Trust”); that he is the President of the Trusts; and that all actions by trustees and other persons Trust and is authorized to sign the Application on behalf of the Trust; and that all action by shareholders and the Trust’s Board of Trustees necessary to authorize the undersigned to execute and file the Application has been taken. The undersigned further states that he is familiar with the Application, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information, and belief.

Dated: November 15, 2022

By: /s/ E. Blake Moore, Jr.
Name: E. Blake Moore, Jr.
Title: President

19

# TWO ROADS SHARED TRUST

By: /s/ James Colantino
Name: James Colantino
Title: President
Date: January 24, 2023

33

158196.00157/130244045v.2

# EXHIBIT 4B-2
VERIFICATION HYPATIA CAPITAL MANAGEMENT LLC

The undersigned states that he has duly executed the attached Application dated January 24, 2023 for an Exemptive order dated November 15, 2022 for and on behalf of Touchstone Advisors, Inc. (the “Adviser”); that he is the President and Chief Executive Officer of the Adviser; and that all actions by directors, pursuant to Section 6(c) of the Investment Company Act of 1940 (the “1940 Act”), on behalf of Hypatia Capital Management LLC; that he is Chief Operating Officer of Hypatia Capital Management LLC and is authorized to sign the Application on behalf of Hypatia Capital Management LLC; and that all action by the officers and other persons necessary to authorize the undersigned to execute and file the Application has been taken. The undersigned further states that he is familiar with the Application, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information, and belief.

Dated: November 15, 2022

HYPATIA CAPITAL MANAGEMENT LLC

By: /s/ E. Blake Moore, Jr.
Name: E. Blake Moore, Jr.
Title: Chief Executive Officer

By: /s/ John Grenawalt
Name: John Grenawalt
Title: Chief Operating Officer
Date: January 24, 2023

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158196.00157/130244045v.2

EXPEDITED REVIEW REQUESTED UNDER 17 CFR 270.0-5(d)

File No. 812-15231812-1

As filed with the Securities and Exchange Commission on November 12, 2021

# UNITED STATES OF AMERICA
BEFORE THE

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

In the Matter of

TWO ROADS SHARED TRUST
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246

SECOND AMENDED AND RESTATED

HYPATIA CAPITAL MANAGEMENT LLC
430 Park Avenue, 19th Floor
New York, NY 10022

APPLICATION FOR AN ORDER OF EXEMPTION PURSUANT TO SECTION 6(c) OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"), FROM: (1)
CERTAIN PROVISIONS OF SECTION 15(a) OF THE 1940 ACT AND (2) CERTAIN
DISCLOSURE REQUIREMENTS UNDER VARIOUS RULES AND FORMS

In the Matter of

ADVISORS SERIES TRUST
c/o U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, WI 53202

and

SEMPER CAPITAL MANAGEMENT, L.P.
52 Vanderbilt Avenue
Suite 401
New York, NY 10017

Please direct all communications regarding this Application to:

Domenick Pugliese, Esq.
Sullivan & Worcester, LLP
1633 Broadway, 32nd Floor

158196.00157/130244045v.2

New York, NY 10019
Telephone: (212) 660-3073
Stacy H. Louizos
Blank Rome, LLP
1271 Avenue of the Americas
New York, NY 10020
slouizos@blankrome.com

With a copy to:

Timothy Burdick
Ultimus Fund Solutions, LLC
80 Arkay Drive, Suite 110
Hauppauge, NY 11788
tburdick@ultimusfundsolutions.com

Elaine E. Richards, Vice President and Secretary
Advisors Series Trust
615 East Michigan Street
Milwaukee, WI 53202
Telephone: (626) 914-7363

This Application Page 1 of 27 sequentially numbered pages (including exhibits) contains 22 pages.

1

As filed with the Securities and Exchange Commission on January 24, 2023

2

158196.00157/130244045v.2

UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

| In the Matter of | ) SECOND |
| --- | --- |
|  | ) AMENDED AND |
| ADVISORS | ) RESTATED |
| SERIES TWO | ) APPLICATION |
| ROADS SHARED | ) FOR AN ORDER |
| TRUST | ) OF EXEMPTION |
| 615 East Michigan | ) PURSUANT TO |
| Street | ) SECTION 6(c) OF |
| Milwaukee 225 | ) THE |
| Pictoria Drive, WI | ) INVESTMENT |
| 53202 Suite 450 | ) COMPANY ACT |
| and Cincinnati, OH | ) OF 1940, AS |
| 45246 | ) AMENDED (THE |
|  | “1940 ACT”), |
| SEMPER HYPATIA | FROM: (1) |
| CAPITAL | CERTAIN |
| MANAGEMENT, | PROVISIONS OF |
| L.P. LLC | SECTION 15(a) |
| 52 Vanderbilt 430 | OF THE 1940 |
| Park Avenue, Suite | ACT AND |
| 40119th Floor | FROM (2) |
| New York, NY | CERTAIN |
| 1001710022 | DISCLOSURE |
|  | REQUIREMENTS |
| Investment | UNDER |
| Company Act of | VARIOUS |
| 1940 File No. 812- | RULES AND |
| 15231812-1 | FORMS |

# I. INTRODUCTION

Advisors Series Two Roads Shared Trust (the “Trust”), a registered open-end management investment company that offers one or more series of shares, on its own behalf, and on behalf of each series, and Semper Hypatia Capital Management, L.P. LLC (the “Initial Adviser” or the “Adviser” and, together with the Trust, the “Applicants”),1 the investment adviser to the Semper

1 The term “Adviser” means (i) the Initial Adviser, (ii) its successors, and (iii) any entity controlling, controlled by, or under common control with, the Initial Adviser or its successors that serves as the primary adviser to a Subadvised Fund (as defined below). For the purposes of the requested order,

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Brentview Dividend Growth Equity Fund: Hypatia Women CEO ETF$^{2}$(the “Fund”), hereby submit this application (the “Application”) to the Securities and Exchange Commission (the “Commission”) for an order of exemption pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”).

Applicants request an order exempting them from Section 15(a) of the 1940 Act to permit the Adviser, subject to the approval of the board of trustees of the Trust (the “Board” or “Trustees”)$^{3}$, including a majority of those who are not “interested persons” of the Trust or the Adviser, as defined in Section 2(a)(19) of the 1940 Act (the “Independent Trustees”), to take certain actions without obtaining shareholder approval as follows: (i) select investment subadvisers (each a “Subadviser” and collectively, the “Subadvisers”) for all or a portion of the assets of the Fund pursuant to an investment subadvisory agreement with each Subadviser (each a “Subadvisory Agreement” and collectively, the “Subadvisory Agreements”); and (ii) materially amend Subadvisory Agreements with the Subadvisers.

$^{1}$ ~~Semper Capital Management, L.P. also serves as the investment adviser to the Semper MBS Total Return Fund and the Semper Short Duration Fund; these funds are not seeking any relief under this Application. The Applicants are seeking relief for the Semper Brentview Dividend Growth Equity Fund and future subadvised funds. The Semper Brentview Dividend Growth Equity Fund became effective and commenced operations on June 1, 2021. The Trust filed Post-Effective Amendment No. 1027 for the purpose of adding the new series to the Trust and reflecting any changes made in response to Staff comments (filed on May 27, 2021) (Accession No. 0000894189-21-003311).~~

$^{2}$ ~~The term “Adviser” means (i) the Initial Adviser, (ii) its successors, and (iii) any entity controlling, controlled by, or under common control with, the Initial Adviser or its successors that serves as the primary adviser to a Subadvised Fund (as defined below). For the 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.~~

## 2

As used herein, a “Subadviser” for a Fund is any investment adviser that enters into a Subadvisory Agreement with respect to a Fund. Applicants also apply for an order of the Commission under Section 6(c) of the 1940 Act exempting the Fund from certain disclosure obligations under the following rules and forms: (i) Item 19(a)(3) of Form N-1A; (ii) Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8), and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (iii) Sections 6-07(2) (a), (b), and (c) of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”). Similar to

“successor” is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization.

$^{2}$ The Trust also offers other series not advised by the Adviser and the relief sought herein will not apply to such other series or investment advisers unless the Commission has granted an order of exemption to such series and investment advisers allowing them to rely on the relief granted herein.

$^{3}$ The term “Board” also includes the board of trustees or directors of a future Subadvised Fund (as defined below), if different from the board of trustees of the Trust.

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the order the Commission recently granted to Carillon Series Trust, et al.$^{4}$, in addition to Wholly-Owned and Non-Affiliated Subadvisers (both as defined below), the relief described in this Application would extend to any Subadviser that is an “affiliated person” (as such term is defined in Section 2(a)(3) of the 1940 Act) of the Fund or the Adviser for reasons other than serving as investment subadviser to one or more Funds (an “Affiliated Subadviser”).$^{5}$

Applicants request that the relief sought herein apply to Applicants, as well as to any existing or future registered open-end management investment company or series thereof that intends to rely on the requested order in the future and (i) is advised by the Adviser; (ii) uses the multi-manager structure described in this Application; and (iii) complies with the terms and conditions set forth herein (each, together with any Fund that currently uses the multi-manager

$^{4}$ The Commission issued an order granting the expanded relief requested by the Application. Carillon Series Trust, et al., Investment Company Act Release No. 33464 (May 2, 2019) (Notice) and No. 33494 (May 29, 2019) (Order) (the “Carillon Order”). See also Touchstone Strategic Trust, et al., Investment Company Act Rel. No. 34790 (December 22, 2022) (Notice) and No. 34809 (January 18, 2023) (Order) (the “Touchstone Order”). See also Advisors Series Trust and Semper Capital Management, L.P., Investment Company Act Rel. No. 34500 (February 9, 2022) (Notice) and No. 34528 (March 8, 2022) (Order) (the “Semper Capital Management Order”). See also Investment Managers Series Trust and Hamilton Lane Advisors, L.L.C., Investment Company Act Rel. No. 34370 (September 1, 2021) (Notice) and No. 34385 (September 27, 2021) (Order) (the “Hamilton Lane Order”). See also Uncommon Investment Funds Trust and Uncommon Investment Advisors LLC, Investment Company Act Rel. No. 34331 (July 15, 2021) (Notice) and No. 34354 (August 11, 2021) (Order) (the “Uncommon Investment Funds Order”). See also New Age Alpha Trust and New Age Alpha Advisors, LLC, Investment Company Act Rel. No. 34322 (July 6, 2021) (Notice) and No. 34348 (August 3, 2021) (Order) (the “New Age Alpha Trust Order”). See also Listed Funds Trust, et al., Investment Company Act Rel. No. 34293 (June 2, 2021) (Notice) and No. 34321 (June 29, 2021) (Order) (“LFT Order”). See also Azzad Funds, et al., Investment Company Act Rel. No. 34241 (April 5, 2021) and No. 34261 (April 30, 2021) (“Azzad Order”). See also ETF Series Solutions and Distillate Capital Partners LLC, Investment Company Act Release No. 34169 (January 11, 2021) (Notice) and No. 34190 (February 8, 2021) (Order) (the “Distillate Capital Order”); Esoterica Thematic Trust and Esoterica Capital LLC, Investment Company Act Release No. 34161 (January 4, 2021) (Notice) and No. 34185 (February 1, 2021) (Order) (the “Esoterica Order”); ETF Series Solutions and Clearshares LLC, Investment Company Act Release No. 34144 (December 21, 2020) (Notice) and No. 34174 (January 19, 2021) (Order) (the “Clearshares Order”); OSI ETF Trust, et al., Investment Company Act Release No. 33678 (October 29, 2019) (Notice) and No. 33705 (November 26, 2019) (Order) (the “OSI ETF Order”); and Investment Managers Series Trust II, et al., Investment Company Act Release No. 34075 (October 27, 2020) (Notice) and No. 34104 (November 23, 2020) (Order) (the “Investment Managers Order”).

$^{5}$Section 2(a)(3) of the 1940 Act defines “affiliated person” as follows: “Affiliated person” of another person means (A) any person directly or indirectly owning, controlling, or holding with power to vote, 5 per centum or more of the outstanding voting securities of such other person; (B) any person 5 per centum or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other person; (C) any person directly or indirectly controlling, controlled by, or under common control with, such other person; (D) any officer, director, partner, copartner, or employee of such other person; (E) if such other person is an investment company, any investment adviser thereof or any member of an advisory board thereof; and (F) if such other person is an unincorporated investment company not having a board of directors, the depositor thereof.

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structure described in this Application, a “Subadvised Fund” and collectively, the “Subadvised Funds”).$^{6}$

### 3

Applicants are seeking this exemption primarily to enhance the ability of the Adviser and the Board to obtain for a Subadvised Fund the services of one or more Subadvisers believed by the Adviser and the Board to be particularly well suited for all or a portion of the assets of the Subadvised Fund, and to make material amendments to Subadvisory Agreements believed by the Adviser and the Board to be appropriate, without the delay and expense of convening special meetings of shareholders to approve the Subadvisory Agreements. Under this structure, the Adviser, in its capacity as investment adviser, would evaluate, allocate assets to and oversee the Subadvisers, and make recommendations about their hiring, termination and replacement to the Board, at all times subject to the authority of the Board. This structure is commonly referred to as a “multi-manager” structure. In addition, Applicants are seeking relief from certain disclosure requirements concerning fees paid to Subadvisers.

For the reasons discussed below, Applicants believe that the requested relief is appropriate, in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. Applicants believe that the Subadvised Fund would be negatively impacted without the requested relief because of delays in hiring or replacing Subadvisers and costs associated with the proxy solicitation to approve new or amended Subadvisory Agreements.

## II. BACKGROUND

### A. The Trust

The Trust is registered under the 1940 Act as an open-end management investment company organized as a Delaware statutory trust. The Adviser serves as “investment adviser,” as defined in Section 2(a)(20) of the 1940 Act, to ~~each~~the Fund. The Trust intends to operate the

$^{6}$ All registered open-end investment companies that currently intend to rely on the requested order are named as Applicants. The Fund that currently is, or that currently intends to be, a Subadvised Fund is identified in this Application. Any entity that relies on the requested order will do so only in accordance with the terms and conditions contained in this Application.

For purposes of this Application, the term “Subadviser” will also apply to any Subadviser to any wholly-owned subsidiary of a Subadvised Fund (each, a “Subsidiary” and collectively, the “Subsidiaries”). The Adviser will serve as investment adviser to each Subsidiary and may retain one or more Subadvisers to manage the assets of a Subsidiary. Applicants also request relief with respect to any Subadvisers who serve as Subadvisers to a Subsidiary. Where appropriate, Subsidiaries are also included in the term “Subadvised Funds.”

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Fund under a multi-manager structure and which will be offered and sold pursuant to a registration statement on Form N-1A. The Board consists of four (4) trustees, each of whom serves as an Independent Trustee.

The Trust offers shares of multiple series, each with its own distinct investment objectives, policies, and restrictions. The Adviser has retained a Subadviser to provide investment advisory services to the Fund.$^{7}$ The Fund will operate from its inception under a multi-manager structure. ~~Two other series of the Trust managed by the Adviser, the Semper MBS Total Return Fund and the Semper Short Duration Fund, do not intend to operate in a multi-manager structure and are not seeking relief under this Application.~~

#### B. The Adviser

~~Semper~~Hypatia Capital Management LLC, ~~L.P.~~ with its business address at ~~52 Vanderbilt~~430 Park Avenue, ~~4th~~19$^{th}$ Floor, New York, NY ~~10017-385110022~~, is a Delaware limited ~~partnership~~liability company registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and serves as investment adviser to the Fund. The ~~Initial Adviser provides investment advisory services to registered open-end funds.~~ The Adviser serves as investment adviser to ~~each~~the Fund pursuant to an investment advisory agreement with the Fund (each, an “Investment Advisory Agreement” and, together, the “Investment Advisory Agreements”). Any future Adviser also will be registered with the Commission as an investment adviser under the Advisers Act.

4

Consistent with the terms of a Subadvised Fund’s Investment Advisory Agreement, the Adviser may, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable Subadvised Fund (if required by applicable law), delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Fund to a Subadviser. The Adviser retains overall responsibility for the management and investment of the assets of the Subadvised Fund. With respect to each Subadvised Fund, the Adviser’s responsibilities include, for example, recommending the removal or replacement of Subadvisers, and allocating the portion of that Subadvised Fund’s assets to any given Subadviser and reallocating those assets as necessary from time to time. The Adviser evaluates, selects and

$^{7}$ Each Subadvised Fund discloses in its registration statement that it intends to operate pursuant to the order as requested in this Application, if granted. The prospectus for a Subadvised Fund will continue to include the disclosure required by Condition 2 below at all times subsequent to the approval required by Condition 1 below. If a Subadvised Fund has obtained shareholder approval to operate under the multi-manager structure described herein prior to the issuance of an order as requested in this Application, the prospectus for the Subadvised Fund will at all times following such shareholder approval contain appropriate disclosure that the Subadvised Fund has applied for exemptive relief to operate under the multi-manager structure described herein, including the ability to hire new Subadvisers and materially amend an existing Subadvisory Agreement without soliciting further shareholder vote.

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recommends Subadvisers for the Subadvised Fund, and monitors and reviews each Subadviser and its performance and its compliance with the applicable Subadvised Fund’s investment policies and restrictions.

Each Investment Advisory Agreement has been or will be approved by the Board, including a majority of the Independent Trustees, and by the shareholders of the relevant Fund in the manner required by Sections 15(a) and 15(c) of the 1940 Act. The terms of the Investment Advisory Agreements comply or will comply with Section 15(a) of the 1940 Act. Applicants are not seeking an exemption from the provisions of the 1940 Act with respect to the Investment Advisory Agreements. Pursuant to the terms of each Investment Advisory Agreement, the Adviser, subject to the oversight of the Board, has agreed or will agree to (i) provide continuous investment management for each Fund; (ii) determine the securities and other investments to be purchased, retained, sold or loaned by each Fund and the portion of such assets to be invested or held uninvested as cash; and (iii) exercise full discretion and act for each Fund in the same manner and with the same force and effect as such Fund itself might or could do with respect to purchases, sales, or other transactions and with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. The Adviser also is or will be responsible for effecting transactions for each Fund and selecting brokers or dealers to execute such transactions for each Fund. The Adviser will periodically review each Fund’s investment policies and strategies and, based on the need of a particular Fund, may recommend changes to the investment policies and strategies of the Fund for consideration by the Board.

Each Investment Advisory Agreement permits or will permit the Adviser to enter into Subadvisory Agreements with one or more Subadvisers. Pursuant to its authority under the Investment Advisory Agreements, the Adviser has entered or will enter into Subadvisory Agreements as described below under “The Subadvisers and the Subadvised Fund.” If the name of any Subadvised Fund contains the name of a subadviser, the name of the Adviser that serves as the primary adviser to the Subadvised Fund, or a trademark or trade name that is owned by or publicly used to identify that Adviser, will precede the name of the subadviser.

For its services to each Fund, the Adviser receives or will receive an investment advisory fee from that Fund as specified in the applicable Investment Advisory Agreement. The investment advisory fees are calculated based on the average daily net assets of the particular Fund, calculated daily as of the close of business on each business day during the month.

### C. The Subadvisers and the Subadvised Fund

Pursuant to the authority under the Investment Advisory Agreements, the Adviser may enter into Subadvisory Agreements with various Subadvisers on behalf of the Fund. The Initial Adviser has entered into a Subadvisory Agreement with ~~Brentview~~Vident Investment ~~Management~~Advisory, LLC (“~~Brentview~~Vident”). ~~Brentview~~Vident is considered a Non-Affiliated Subadviser (as defined below). The Adviser also may, in the future, enter into Subadvisory Agreements with other Subadvisers on behalf of the Fund and other Subadvised Funds.

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5

With respect to any future Subadviser that is wholly owned by the Adviser or the Adviser’s parent company, the Adviser will have overall responsibility for the affairs of such Subadviser, and generally will approve certain actions by that Subadviser that could materially affect the operations of the Adviser and its subsidiaries as a group. ~~Brentview~~Vident has, and any future Subadviser will have, their own employees who would provide investment services to a Subadvised Fund.

The Subadviser is, and any future Subadvisers will be, “investment advisers” to the Subadvised Fund within the meaning of Section 2(a)(20) of the 1940 Act and provide, or will provide, investment management services to the Subadvised Fund subject to, without limitation, the requirements of Sections 15(c) and 36(b) of the 1940 Act. In addition, the Subadviser is, and any future Subadvisers will be, registered with the Commission as an investment adviser under the Advisers Act or not subject to such registration. The Adviser selects Subadvisers based on the Adviser’s evaluation of the Subadvisers’ skills in managing assets pursuant to particular investment styles, and recommends their hiring to the Board. In the future, the Adviser may employ multiple Subadvisers for one or more of any Subadvised Fund. In those instances, the Adviser would allocate and, as appropriate, reallocate a Subadvised Fund’s assets among the Subadvisers.

The Adviser engages or will engage in an ongoing analysis of the continued advisability of retaining a Subadviser and makes recommendations to the Board as needed. The Adviser also negotiates and renegotiates the terms of the Subadvisory Agreements with a Subadviser, including the fees paid to the Subadvisers, and makes recommendations to the Board as needed.

The Subadvisers, subject to the oversight of the Adviser and the Board, determine or will determine the securities and other instruments to be purchased, sold or entered into by a Subadvised Fund’s portfolio or a portion thereof, and place orders with brokers or dealers that they select.$^{8}$ The Subadvisers keep or will keep certain records required by the 1940 Act and the Advisers Act to be maintained on behalf of the relevant Subadvised Fund, and assist or will assist the Adviser to maintain the Subadvised Fund’s compliance with the relevant requirements of the 1940 Act. The Subadvisers monitor or will monitor the respective Subadvised Fund’s investments and provide or will provide periodic reports to the Board and the Adviser. The Subadvisers also make or will make their officers and employees available to the Adviser and the Board to review the investment performance and investment policies of the Subadvised Fund.

$^{8}$ For the purposes of this Application, a “Subadviser” also includes an investment subadviser that provides or will provide the Adviser with a model portfolio reflecting a specific strategy, style or focus with respect to the investment of all or a portion of a Subadvised Fund’s assets. The Adviser may use the model portfolio to determine the securities and other instruments to be purchased, sold, or entered into by a Subadvised Fund’s portfolio or a portion thereof, and place orders with brokers or dealers that it selects.

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The Subadvisory Agreements were or will be approved by the Board, including a majority of the Independent Trustees, in accordance with Sections 15(a) and 15(c) of the 1940 Act.

The terms of each Subadvisory Agreement comply or will comply fully with the requirements of Section 15(a) of the 1940 Act. Each Subadvisory Agreement will set forth the duties of the Subadviser and precisely describe the compensation paid to the Subadviser.

After an initial two-year period, the terms of the Subadvisory Agreements are reviewed and renewed on an annual basis by the Board, including a majority of the Independent Trustees in accordance with Section 15(c) of the 1940 Act. The Board dedicates substantial time to review contract matters, including matters relating to Investment Advisory Agreements and Subadvisory Agreements. With respect to the Subadvised Fund, the Board reviews comprehensive materials received from the Adviser, the Subadviser, independent third parties and independent counsel. Applicants will continue this annual review and renewal process for Subadvisory Agreements in accordance with the 1940 Act if the relief requested herein is granted by the Commission.

6

The Board reviews information provided by the Adviser and Subadvisers when it is asked to approve or renew Subadvisory Agreements. The Subadvised Fund discloses in its statutory prospectus that a discussion regarding the basis for the Board’s approval and renewal of the Investment Advisory Agreements and any applicable Subadvisory Agreements is available in the Subadvised Fund’s annual or semi-annual report to shareholders for the relevant period in accordance with Item 10(a)(1)(iii) of Form N-1A. The information provided to the Board is maintained as part of the records of the respective Subadvised Fund pursuant to Rule 31a-1(b)(4) and Rule 31a-2 under the 1940 Act.

Pursuant to each Subadvisory Agreement, the Adviser has agreed or will agree to pay each Subadviser a fee, based on the percentage of the assets of a Subadvised Fund, from the fee received by the Adviser from a Subadvised Fund under the Investment Advisory Agreement.$^{9}$ Each Subadviser will bear its own expenses of providing investment management services to a Subadvised Fund.

### III. REQUEST FOR EXEMPTIVE RELIEF

Section 6(c) of the 1940 Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the 1940 Act, or any rule thereunder, if such relief 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 1940 Act. Applicants believe that the requested relief described in this Application meets this standard.

$^{9}$ A Subadvised Fund also may pay advisory fees directly to a Subadviser.

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#### IV. APPLICABLE LAW AND DISCUSSION

##### A. Shareholder Vote

###### 1. Regulatory Background

Section 15(a) of the 1940 Act states, in part, that it is unlawful for any person to act as an investment adviser to a registered investment company “except pursuant to a written contract, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company.”

Section 2(a)(20) of the 1940 Act defines an “investment adviser” as any person who, pursuant to an agreement with such registered investment company or with an investment adviser of such registered investment company, is empowered to determine what securities or other property shall be purchased or sold by such registered investment company. Consequently, the Subadvisers are deemed to be within the definition of an “investment adviser” and, therefore, the Subadvisory Agreements are each subject to Section 15(a) of the 1940 Act to the same extent as the Investment Advisory Agreements.

Therefore, Section 15(a) of the 1940 Act requires a majority of the outstanding voting securities of a Subadvised Fund to approve Subadvisory Agreements whenever the Adviser proposes to the Board to hire new Subadvisers for a Subadvised Fund. This provision would also require shareholder approval by a majority vote for any material amendment to Subadvisory Agreements.

The Subadvisory Agreements are required to terminate automatically and immediately upon their “assignment,” which could occur upon a change in control of the Subadvisers.$^{10}$

7

Rule 2a-6 under the 1940 Act provides that certain transactions that do not result in a “change in actual control or management of the investment adviser” to a registered investment company are not assignments for purposes of Section 15(a)(4) of the 1940 Act, thereby effectively providing an exemption from the shareholder voting requirements in Section 15(a) of the 1940 Act. Applicants do not believe that Rule 2a-6 under the 1940 Act provides a safe harbor to recommend, hire and terminate Subadvisers. Each Subadviser is expected to run its own day-to-day operations and each will have its own investment personnel. Therefore, in certain

$^{10}$ See Section 15(a)(4) of the 1940 Act. Section 2(a)(4) of the 1940 Act defines “assignment” as any direct or indirect transfer or hypothecation of a contract.

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instances appointing certain Subadvisers could be viewed as a change in management and, as a result, an “assignment” within the meaning of the 1940 Act.

# 2. Requested Relief

Applicants seek relief to (i) select Subadvisers, including Affiliated Subadvisers, for all or a portion of the assets of a Subadvised Fund and enter into Subadvisory Agreements and (ii) materially amend Subadvisory Agreements with such Subadvisers, each subject to the approval of the Board, including a majority of the Independent Trustees, without obtaining shareholder approval required under Section 15(a) of the 1940 Act. Such relief would include, without limitation, the replacement or reinstatement of any Subadviser with respect to which a Subadvisory Agreement has automatically terminated as a result of an “assignment,” within the meaning of Section 2(a)(4) of the 1940 Act. Applicants believe that the relief sought should be granted by the Commission because (1) the Adviser either will operate a Subadvised Fund, or may operate the Subadvised Fund, in a manner that is different from conventional investment companies; (2) the relief will benefit shareholders by enabling the Subadvised Fund to operate in a less costly and more efficient manner; and (3) Applicants will consent to a number of conditions that adequately address the policy concerns of Section 15(a) of the 1940 Act, including conditions designed to ensure that shareholder interests are adequately protected through Board oversight.

# (a) Operations of the Trust

Section 15(a) was designed to protect the interests and expectations of a registered investment company’s shareholders by requiring they approve investment advisory contracts, including subadvisory contracts.11 Section 15(a) is predicated on the belief that if a registered investment company is to be managed by an investment adviser different from the investment adviser selected by shareholders at the time of the investment, the new investment adviser should be approved by shareholders.12 The relief sought in this Application is consistent with this public policy.

In the case of a traditional investment company, the investment adviser is a single entity that employs one or more individuals as portfolio managers to make the day-to-day investment decisions. The investment adviser may terminate or hire portfolio managers without board or shareholder approval and has sole discretion to set the compensation it pays to the portfolio managers. Alternatively, for subadvised funds, the investment adviser is not normally responsible for the day-to-day investment decisions and instead, the investment adviser selects,

11 See Section 1(b)(6) of the 1940 Act.

12 Hearings on S. 3580 before a Subcomm. of the Senate Comm. on Banking and Currency, 76th Cong., 3d Sess. 253 (1940) (statement of David Schenker).

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oversees, and evaluates subadvisers who ultimately are responsible for the day-to-day investment decisions.

Primary responsibility for management of a Subadvised Fund’s assets, including the selection and oversight of the Subadvisers, is vested in the Adviser, subject to the oversight of the Board.

# 8

Applicants believe that it is consistent with the protection of investors to vest the selection and oversight of the Subadvisers in the Adviser in light of Applicants’ multi-manager structure, as well as the shareholders’ expectation that the Adviser is in possession of information necessary to select the most capable Subadvisers. The Adviser has the requisite expertise to evaluate, select and oversee the Subadvisers. The Adviser will not normally make day-to-day investment decisions for a Subadvised Fund.$^{13}$

From the perspective of the shareholder, the role of the Subadvisers is substantially equivalent to the role of the individual portfolio managers employed by an investment adviser to a traditional investment company. The individual portfolio managers and the Subadvisers are each charged with the selection of portfolio investments in accordance with a Subadvised Fund’s investment objectives and policies and have no broad supervisory, management or administrative responsibilities with respect to a Subadvised Fund. Shareholders expect the Adviser, subject to review and approval of the Board, to select a Subadviser who is in the best position to achieve a Subadvised Fund’s investment objective. Shareholders also rely on the Adviser for the overall management of a Subadvised Fund and a Subadvised Fund’s total investment performance.

Whenever required by Section 15(c) of the 1940 Act, the Board will request and the Adviser and each Subadviser will furnish such information as may be reasonably necessary for the Board to evaluate the terms of the Investment Advisory Agreements and the Subadvisory Agreements. The information that is provided to the Board will be maintained as part of the records of the Subadvised Fund in accordance with the applicable recordkeeping requirements under the 1940 Act and made available to the Commission in the manner prescribed by the 1940 Act.

In addition, the Adviser and the Board will consider the reasonableness of the Subadviser’s compensation with respect to each Subadvised Fund for which the Subadviser will provide portfolio management services. Although only the Adviser’s fee is payable directly by a Subadvised Fund, and the Subadviser’s fee is payable by the Adviser,$^{14}$ the Subadviser’s fee directly bears on the amount and reasonableness of the Adviser’s fee payable by a Subadvised

$^{13}$ Although the Adviser will not normally make such day-to-day investment decisions, it may manage all or a portion of a Subadvised Fund.

$^{14}$ A Subadvised Fund also may pay advisory fees directly to a Subadviser.

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Fund. Accordingly, the Adviser and the Board will analyze the fees paid to Subadvisers in evaluating the reasonableness of the overall arrangements.

With respect to oversight, Applicants note that the Adviser performs and will perform substantially identical oversight of all Subadvisers, regardless of whether they are affiliated with the Adviser. Such oversight is similar in many respects to how the Adviser would oversee its own internal portfolio management teams.

# (b) Lack of Economic Incentives

In allocating the management of Subadvised Fund assets between itself and one or more Subadvisers, Applicants acknowledge that the Adviser has an incentive to consider the benefit it will receive, directly or indirectly, from the fee paid for the management of those assets. However, Applicants believe that the protections afforded by the conditions set forth in this Application would prevent the Adviser from acting to the detriment of a Subadvised Fund and its shareholders. Applicants assert that the proposed conditions are designed to provide the Board with sufficient independence and the resources and information it needs to monitor and address conflicts of interest. In particular, the Adviser will provide the Board with any information that may be relevant to the Board’s evaluation of material conflicts of interest present in any subadvisory arrangement when the Board is considering, with respect to a Subadvised Fund, a change in Subadviser or an existing Subadvisory Agreement as

9

part of its annual review process. The Board will also have to make a separate finding, reflected in the Board minutes, that any change in Subadvisers or any renewal of an existing Subadvisory Agreement is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to it, does not involve a conflict of interest from which the Adviser, a Subadviser, or any officer or Trustee of the Subadvised Fund or any officer or board member of the Adviser derives an inappropriate advantage.

Applicants note that the relief they are requesting would not be subject to two conditions that have been customary in previous exemptive orders for similar relief, including (i) restrictions on the ownership of interest in Subadvisers by trustees and officers of the Subadvised Fund and the Adviser, and (ii) a requirement that the Adviser provide the Board with profitability reports each quarter. Applicants believe eliminating these conditions is appropriate with respect to the requested relief. As to the condition on ownership, Applicants assert that restricting ownership of interests in a Subadviser by trustees and officers would not be meaningful where the Adviser may itself own an interest in the Subadviser and the Subadviser may be selected for a Subadvised Fund under the requested relief.$^{15}$ As to the condition requiring quarterly profitability reports, Applicants note that the Board reviews and will continue to review

$^{15}$ Any Trustee of the Board that has an ownership interest in a Subadviser would not be deemed an Independent Trustee under Section 2(a)(19) of the 1940 Act.

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profitability information at the time of any proposed Subadviser change (see condition 7) and as part of its annual review of each Subadvisory Agreement pursuant to Section 15(e) of the 1940 Act.

Until the Carillon Order, the Commission has granted the requested relief solely with respect to Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief has been premised on the fact that such a Subadviser serves in the same limited capacity as an individual portfolio manager. Applicants believe this same rationale supports extending the requested relief to Affiliated Subadvisers. Moreover, Applicants note that, while the Adviser's judgment in recommending a Subadviser can be affected by certain conflicts of interest or economic incentives, they do not warrant denying the extension of the requested relief to Affiliated Subadvisers. For one, the Adviser faces those conflicts and incentives in allocating fund assets between itself and a Subadviser, and across Subadvisers, as it has an interest in considering the benefit it will receive, directly or indirectly, from the fee the fund pays for the management of those assets. Moreover, the Adviser has employed and will continue to employ the same methodology to evaluate potential conflicts of interest, regardless of the affiliation between the Adviser and Subadviser. While the selection and retention of Affiliated Subadvisers by the Adviser potentially presents different or additional conflicts of interest than may be the case with Non-Affiliated or Wholly-Owned Subadvisers, the proposed terms and conditions of the requested relief are designed to address the potential conflicts of interest with respect to both those common to all types of Subadvisers and specific to Affiliated Subadvisers. In particular, Applicants believe that the proposed conditions are protective of shareholder interests by ensuring the Board's independence and providing the Board with the appropriate resources and information to monitor and address conflicts.

# (c) Benefits to Shareholders

Without the requested relief, when a new Affiliated Subadviser is retained by the Adviser on behalf of a Subadvised Fund, the shareholders of the Subadvised Fund are required to approve the Subadvisory Agreement. Similarly, if an existing Subadvisory Agreement with an Affiliated Subadviser is amended in any material respect, approval by the shareholders of the affected Subadvised Fund is required. Moreover, if a Subadvisory Agreement with an Affiliated Subadviser is 'assigned' as a result of a change in control of the Subadviser, the shareholders of the affected Subadvised Fund will

10

be required to approve retaining the existing Subadviser. In all these instances the need for shareholder approval requires a Subadvised Fund to call and hold a shareholder meeting, create and distribute proxy materials, and solicit votes from shareholders on behalf of the Subadvised Fund, and generally necessitates the retention of a proxy solicitor. This process is time-intensive, expensive and slow, and, in the case of a poorly performing Subadviser or one whose management team has parted ways with the Subadviser, potentially harmful to a Subadvised Fund and its shareholders.

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As noted above, shareholders investing in a Fund that has a Subadviser are effectively hiring the Adviser to manage a Subadvised Fund’s assets by overseeing, monitoring and evaluating the Subadviser rather than by the Adviser hiring its own employees to oversee the Subadvised Fund. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of a Subadvised Fund are paying the Adviser - the selection, oversight and evaluation of Subadvisers, including Affiliated Subadvisers - without incurring unnecessary delays or expenses is appropriate and in the interest of a Subadvised Fund’s shareholders and will allow such Subadvised Fund to operate more efficiently. Within this structure, the Adviser is in the better position to make an informed selection and evaluation of a Subadviser than are individual shareholders. Without the delay inherent in holding shareholder meetings (and the attendant difficulty in obtaining the necessary quorums), a Subadvised Fund will be able to hire or replace Affiliated Subadvisers more quickly and at less cost, when the Board, including a majority of the Independent Trustees, and the Adviser believe that a change would benefit a Subadvised Fund and its shareholders.

Until the Carillon Order, the Commission has previously granted the requested relief solely with respect to certain Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief has permitted Subadvised Funds to avoid the time-intensive and expensive shareholder solicitation process with respect to hiring or making a material amendment to a Subadvisory Agreement with respect to such subadvisers. As discussed above, Applicants believe the same rationale supports extending the requested relief to Affiliated Subadvisers as well, and while Affiliated Subadvisers may give rise to different or additional conflicts of interests, the proposed terms and conditions, including the enhanced oversight by the Board, address such potential conflicts. Moreover, treating all Subadvisers equally under the requested relief might help avoid the selection of Subadvisers potentially being influenced by considerations regarding the applicable regulatory requirements (i.e., whether a shareholder vote is required) and the associated costs and delays.$^{16}$

If the relief requested is granted, each Investment Advisory Agreement will continue to be fully subject to Section 15(a) of the 1940 Act. Moreover, the relevant Board will consider the Investment Advisory Agreements and Subadvisory Agreements in connection with its annual contract renewal process under Section 15(c) of the 1940 Act, and the standards of Section 36(b) of the 1940 Act will be applied to the fees paid to each Subadviser.

### 3. Shareholder Notification

With the exception of the relief requested in connection with Aggregate Fee Disclosure (as defined below), the prospectus and statement of additional information for each Subadvised

$^{16}$ The Adviser is responsible for selecting Subadvisers in the best interests of the Subadvised Fund, regardless of the costs or timing constraints that may be associated with the process of seeking shareholder approval of Subadvisory Agreements and material amendments thereto.

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Fund will include all information required by Form N-1A concerning the Subadvisers, including Affiliated

11

Subadvisers, if the requested relief is granted. If a new Subadviser is retained, an existing Subadviser is terminated, or a Subadvisory Agreement is materially amended, a Subadvised Fund’s prospectus and statement of additional information will be supplemented promptly pursuant to Rule 497(e) under the Securities Act.

If new Subadvisers are hired, the Subadvised Fund will inform shareholders of the hiring of a new Subadviser pursuant to the following procedures (“Modified Notice and Access Procedures”): (a) within 90 days after a new Subadviser is hired for any Subadvised Fund, that Subadvised Fund will send its shareholders either a Multi-manager Notice or a Multi-manager Notice and Multi-manager Information Statement;17 and (b) a Subadvised Fund will make the Multi-manager Information Statement available on the website identified in the Multi-manager Notice no later than when the Multi-manager Notice (or Multi-manager Notice and Multi-manager Information Statement) is first sent to shareholders, and will maintain it on that website for at least 90 days. Under the requested relief, a Subadvised Fund would not furnish a Multi-manager Information Statement to shareholders when an existing Subadvisory Agreement is materially modified. In the circumstances described in this Application, a proxy solicitation to approve the appointment of new Subadvisers provides no more meaningful information to shareholders than the proposed Multi-manager Information Statement. Moreover, as indicated above, the Board would comply with the requirements of Sections 15(a) and 15(c) of the 1940 Act before entering into or amending Subadvisory Agreements.

Prior to any Subadvised Fund relying on the requested relief in this Application, the Board, including its Independent Trustees, will have approved its operations as described herein. Additionally, the shareholders of the applicable Subadvised Fund have approved, or will approve, its operation as described herein by a vote of a majority of the outstanding voting

17 A “Multi-manager Notice” will be modeled on a Notice of Internet Availability as defined in Rule 14a-16 under the Exchange Act, and specifically will, among other things: (a) summarize the relevant information regarding the new Subadviser (except as modified to permit Aggregate Fee Disclosure as defined in this Application); (b) inform shareholders that the Multi-manager Information Statement is available on a website; (c) provide the website address; (d) state the time period during which the Multi-manager Information Statement will remain available on that website; (e) provide instructions for accessing and printing the Multi-manager Information Statement; and (f) instruct the shareholder that a paper or email copy of the Multi-manager Information Statement may be obtained, without charge, by contacting a Subadvised Fund. A “Multi-manager Information Statement” will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Exchange Act for an information statement, except as modified by the requested order to permit Aggregate Fee Disclosure. Multi-manager Information Statements will be filed with the Commission via the EDGAR system.

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securities, within the meaning of the 1940 Act, or by the sole shareholder prior to a Subadvised Fund offering its shares.$^{18}$

# B. Fee Disclosure

# 1. Regulatory Background

Form N-1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N-1A requires a registered investment company to disclose in its statement of additional information the method of computing the “advisory fee payable” by the investment company with respect to each investment adviser, including the total dollar amounts that the investment company “paid to the adviser (aggregated with amounts paid to affiliated advisers, if any), and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years.”

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Rule 20a-1 under the 1940 Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the Exchange Act. Item 22 of Schedule 14A sets forth the information that must be included in a registered investment company’s proxy statement. Item 22(c)(1)(ii) requires a proxy statement for a shareholder meeting at which action will be taken on an investment advisory agreement to describe the terms of the advisory contract, “including the rate of compensation of the investment adviser.” Item 22(c)(1)(iii) requires a description of the “aggregate amount of the investment adviser’s fees and the amount and purpose of any other material payments” by the investment company to the investment adviser, or any affiliated person of the investment adviser during the fiscal year. Item 22(c)(8) requires a description of “the terms of the contract to be acted upon, and, if the action is an amendment to, or a replacement of, an investment advisory contract, the material differences between the current and proposed contract.” Finally, Item 22(c)(9) requires a proxy statement for a shareholder meeting at which a change in the advisory fee will be sought to state (i) the aggregate amount of the investment adviser’s fee during the last year; (ii) the amount that the adviser would have received had the proposed fee been in effect; and (iii) the difference between (i) and (ii) stated as a percentage of the amount in (i). Together, these provisions may require a Subadvised Fund to disclose the fees paid to a Subadviser in connection with shareholder action

$^{18}$ If a Subadvised Fund has obtained shareholder approval to operate pursuant to an exemptive order that would permit it to operate in a multi-manager structure where the Adviser would enter into or amend Subadvisory Agreements only with respect to Wholly-owned and Non-Affiliated Subadvisers subject to Board approval but without obtaining shareholder approval and has met all other terms and conditions of the requested order, the Subadvised Fund may rely on the applicable part of the order requested in this Application (i.e., hiring, amending Subadvisory Agreements with, and including Aggregate Fee Disclosure (as defined below) in response to the disclosure requirements discussed herein with respect to Wholly-Owned and Non-Affiliated Sub-Advisers.

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with respect to entering into, or materially amending, an advisory agreement or establishing, or increasing, advisory fees.

Regulation S-X sets forth the requirements for financial statements required to be included as part of a registered investment company's registration statement and shareholder reports filed with the Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require a registered investment company to include in its financial statement information about the investment advisory fees. These provisions could require a Subadvised Fund's financial statements to disclose information concerning fees paid to a Subadviser. The exemption from Regulation S-X requested below would permit a Subadvised Fund to include only the Aggregate Fee Disclosure (as defined below); all other items required by Sections 6-07(2)(a), (b) and (c) of Regulation S-X will be disclosed.

## 2. Requested Relief

Applicants seek relief to permit the Subadvised Fund to disclose (as a dollar amount and a percentage of the Subadvised Fund's net assets) (a) the aggregate fees paid to the Adviser and any Wholly-Owned Subadvisers; and (b) the aggregate fees paid to Affiliated and Non-Affiliated Subadvisers (collectively, the 'Aggregate Fee Disclosure') in lieu of disclosing the fees that may be required by Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(2)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, and Section 6-07(2)(a), (b) and (c) of Regulation S-X.$^{19}$ The Aggregate Fee Disclosure would be presented as both a dollar amount and as a percentage of the Subadvised Fund's net assets. Applicants believe that the relief sought in this Application should be granted because the Adviser intends to operate the Subadvised Fund under a multi-manager structure. As a result, disclosure of the individual fees that the Adviser pays to the Subadvisers would not serve any meaningful purpose.

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As noted above, the Adviser may operate the Subadvised Fund in a manner different from a traditional investment company. By investing in a Subadvised Fund, shareholders are hiring the Adviser to manage the Subadvised Fund's assets by overseeing, evaluating, monitoring, and recommending Subadvisers rather than by hiring its own employees to manage the assets directly. The Adviser, under the oversight of the Board, is responsible for overseeing

$^{19}$ As used herein, a 'Wholly-Owned Subadviser' is any investment adviser that is (1) an indirect or direct 'wholly-owned subsidiary' (as such term is defined in Section 2(a)(43) of the 1940 Act) of the Adviser, (2) a 'sister company' of the Adviser that is an indirect or direct 'wholly-owned subsidiary' of the same company that indirectly or directly wholly owns the Adviser (the Adviser's 'parent company'), or (3) a parent company of the Adviser. A 'Non-Affiliated Subadviser' is any investment adviser that is not an 'affiliated person' (as defined in the 1940 Act) of a Fund or the Adviser, except to the extent that an affiliation arises solely because the Subadviser serves as a subadviser to one or more Funds. Section 2(a)(43) of the 1940 Act defines 'wholly-owned subsidiary' of a person as a company 95 per centum or more of the outstanding voting securities of which are, directly or indirectly, owned by such a person.

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the Subadvisers and recommending their hiring and replacement. In return, the Adviser receives an advisory fee from each Subadvised Fund. Pursuant to each Subadvisory Agreement, the Adviser has agreed or will agree to pay each Subadviser a fee, based on the percentage of the assets of a Subadvised Fund, from the fee received by the Adviser from a Subadvised Fund under the Investment Advisory Agreement. Each Subadviser will bear its own expenses of providing investment management services to a Subadvised Fund.$^{20}$ Disclosure of the individual fees that the Adviser would pay to the Subadvisers does not serve any meaningful purpose since investors pay the Adviser to oversee, monitor, evaluate and compensate the Subadvisers. Applicants contend that the primary reasons for requiring disclosure of individual fees paid to Subadvisers are to inform shareholders of expenses to be charged by a particular Subadvised Fund and to enable shareholders to compare the fees to those of other comparable investment companies. Applicants believe that the requested relief satisfies these objectives because the Subadvised Fund’s overall advisory fee will be fully disclosed and, therefore, shareholders will know what a Subadvised Fund’s fees and expenses are and will be able to compare the advisory fees a Subadvised Fund is charged to those of other investment companies.

Indeed, in a more conventional arrangement, requiring the Subadvised Fund to disclose the fees negotiated between the Adviser and the Subadvisers would be the functional equivalent of requiring single adviser investment companies to disclose the salaries of individual portfolio managers employed by that investment adviser. In the case of a traditional investment company, disclosure is made of the compensation paid to the investment adviser, but shareholders are not told or asked to vote on the salary paid by the investment adviser to individual portfolio managers. Similarly, in the case of the Subadvised Fund, the shareholders will have chosen to employ the Adviser and to rely upon the Adviser’s expertise in monitoring the Subadvisers, recommending the Subadvisers’ selection and termination (if necessary), and negotiating the compensation of the Subadvisers. There are no policy reasons that require shareholders of the Subadvised Fund to be informed of the individual Subadviser’s fees any more than shareholders of a traditional investment company (single investment adviser) would be informed of the particular investment adviser’s portfolio managers’ salaries.$^{21}$

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$^{20}$ A Subadvised Fund also may pay advisory fees directly to a Subadviser.

$^{21}$ The relief would be consistent with the Commission’s disclosure requirements applicable to fund portfolio managers that were previously adopted. See Investment Company Act Release No. 26533 (Aug. 23, 2004). Under these disclosure requirements, a fund is required to include in its statement of additional information, among other matters, a description of the structure of and the method used to determine the compensation structure of its “portfolio managers.” Applicants state that with respect to each Subadvised Fund, the statement of additional information will describe the structure of, and method used to determine, the compensation received by each portfolio manager employed by any Subadviser. In addition to this disclosure with respect to portfolio managers, Applicants state that with respect to each Subadvised Fund, the statement of additional information will describe the structure of, and method used to determine, the compensation received by each Subadviser.

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The requested relief would benefit shareholders of the Subadvised Fund because it would improve the Adviser’s ability to negotiate the fees paid to Subadvisers, including Affiliated Subadvisers. The Adviser’s ability to negotiate with the various Subadvisers would be adversely affected by public disclosure of fees paid to each Subadviser. If the Adviser is not required to disclose the Subadvisers’ fees to the public, the Adviser may be able to negotiate rates that are below a Subadviser’s “posted” amounts as the rate would not be disclosed to the Subadviser’s other clients. Moreover, if one Subadviser is aware of the advisory fee paid to another Subadviser, the Subadviser would likely take it into account in negotiating its own fee.

Until the Carillon Order, the Commission has previously granted the requested relief solely with respect to Wholly-Owned and Non-Affiliated Subadvisers through numerous exemptive orders. That relief only permitted the disclosure of aggregate fees paid to Wholly-Owned and Non-Affiliated Subadvisers and required disclosure of individual fees paid to Affiliated Subadvisers. If the requested relief under Section 15(a) of the 1940 Act is granted to extend to Affiliated Subadvisers, Applicants believe it is appropriate to permit each Subadvised Fund to disclose only aggregate fees paid to Affiliated Subadvisers for the same reasons that similar relief has been granted to Wholly-Owned and Non-Affiliated Subadvisers, as discussed above.

### C. Precedent

Applicants note that substantially identical relief was granted by the Commission in the Carillon Order, the Touchstone Order, the Semper Capital Management Order, the Hamilton Lane Order, the Uncommon Investment Funds Order, New Age Alpha Trust Order, the LFT Order, the Azzad Order, the Distillate Capital Order, the Esoterica Order, the Clearshares Order, the OSI ETF Order, and the Investment Managers Order. Applicants note that substantially the same exemptions requested herein with respect to relief from Section 15(a) and relief from the disclosure requirements of the rules and forms discussed herein for Subadvisers, including Affiliated Subadvisers, have been granted previously by the Commission with respect to Wholly-Owned and Non-Affiliated Subadvisers. See, e.g., Natixis Funds Trust I, et al., Investment Company Act Release Nos. 33265 (October 5, 2018) (notice) and 33287 (October 31, 2018) (order); Advisors Asset Management, Inc. and ETF Series Solutions, Investment Company Act Release Nos. 33169 (July 24, 2018) (notice) and 33207 (August 21, 2018) (order); TriLine Index Solutions, LLC and ETF Series Solutions, Investment Company Act Release Nos. 33159 (July 11, 2018) (notice) and 33192 (August 6, 2018) (order); SL Advisors, LLC and ETF Series Solutions, Investment Company Act Release Nos. 33158 (July 11, 2018) (notice) and 33193 (August 6, 2018) (order); DMS ETF Trust I, et al., Investment Company Act Release Nos. 33156 (July 10, 2018) (notice) and 33196 (August 7, 2018) (order).

For the reasons set forth above, Applicants believe that the relief sought would be appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.

### V. Conditions

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Applicants agree that any order of the Commission granting the requested relief will be subject to the following conditions:

1. Before a Subadvised Fund may rely on the order requested herein, the operation of the Subadvised Fund in the manner described in this Application will be, or has been, approved by a majority of the Subadvised Fund’s outstanding voting securities as defined in the 1940 Act, or, in the case of a Subadvised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Subadvised Fund’s shares are offered to the public.

15---

2. The prospectus for each Subadvised Fund will disclose the existence, substance and effect of any order granted pursuant to the Application. In addition, each Subadvised Fund will hold itself out to the public as employing the multi-manager structure described in this Application. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Subadvisers and recommend their hiring, termination, and replacement.

3. The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Fund’s assets, and subject to review and oversight of the Board, will (i) set the Subadvised Fund’s overall investment strategies, (ii) evaluate, select, and recommend Subadvisers for all or a portion of the Subadvised Fund’s assets, (iii) allocate and, when appropriate, reallocate the Subadvised Fund’s assets among Subadvisers, (iv) monitor and evaluate the Subadvisers’ performance, and (v) implement procedures reasonably designed to ensure that Subadvisers comply with the Subadvised Fund’s investment objective, policies and restrictions.

4. Subadvised Fund will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures.

5. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.

6. Independent Legal Counsel, as defined in Rule 0-1(a)(6) under the 1940 Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.

7. Whenever a Subadviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser.

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8. The Board must evaluate any material conflicts that may be present in a subadvisory arrangement. Specifically, whenever a subadviser change is proposed for a Subadvised Fund (“Subadviser Change”) or the Board considers an existing Subadvisory Agreement as part of its annual review process (“Subadviser Review”):

(a) the Adviser will provide the Board, to the extent not already being provided pursuant to Section 15(c) of the 1940 Act, with all relevant information concerning:
(i) any material interest in the proposed new Subadviser, in the case of a Subadviser Change, or the Subadviser in the case of a Subadviser Review, held directly or indirectly by the Adviser or a parent or sister company of the Adviser, and any material impact the proposed Subadvisory Agreement may have on that interest;
(ii) any arrangement or understanding in which the Adviser or any parent or sister company of the Adviser is a participant that (A) may have had a material effect on the proposed Subadviser Change or Subadviser Review, or (B) may be materially affected by the proposed Subadviser Change or Subadviser Review;
(iii) any material interest in a Subadviser held directly or indirectly by an officer or Trustee of the Subadvised Fund, or an officer or board member of the Adviser (other than through a pooled investment vehicle not controlled by such person); and

16

(iv) any other information that may be relevant to the Board in evaluating any potential material conflicts of interest in the proposed Subadviser Change or Subadviser Review.
(b) the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the Subadviser Change or continuation after Subadviser Review is in the best interests of the Subadvised Fund and its shareholders and, based on the information provided to the Board, does not involve a conflict of interest from which the Adviser, a Subadviser, any officer or Trustee of the Subadvised Fund, or any officer or board member of the Adviser derives an inappropriate advantage.

9. Each Subadvised Fund will disclose in its registration statement the Aggregate Fee Disclosure.

10. In the event that the Commission adopts a rule under the 1940 Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.

11. Any new Subadvisory Agreement or any amendment to an existing Investment Advisory Agreement or Subadvisory Agreement that directly or indirectly results in an increase in the

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aggregate advisory fee rate payable by the Subadvised Fund will be submitted to the Subadvised Fund's shareholders for approval.

## VI. PROCEDURAL MATTERS

All of the requirements for execution and filing of this Application on behalf of Applicants have been complied with in accordance with the applicable organizational documents of Applicants, and the undersigned officers of Applicants are fully authorized to execute this Application and any amendments hereto. The resolutions of the Board are attached as Exhibits A and B-1 through A-2 to this Application in accordance with the requirements of Rule 0-2(c)(1) under the 1940 Act and the verifications required by Rule 0-2(d) under the 1940 Act are attached as Exhibits C and DB-1 through B-2 to this Application. In accordance with the requirements for a request for expedited review of this application, marked copies of two recent applications seeking the same relief as Applicants that are substantially identical as required by Rule 0-5(e) of the Act are attached as Exhibits C.

Pursuant to the requirements of Rule 0-2(f) under the 1940 Act, the Trusteach Applicant hereby states that its address is Advisors Series Trust c/o U.S. Bank Global Fund Services, 615 East Michigan Street, Milwaukee, WI 53202 and the Adviser states that its address is 52 Vanderbilt Avenue, Suite 401.

Two Roads Shared Trust
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246

Hypatia Capital Management LLC
430 Park Avenue, 19th Floor
New York, NY 10017, and that 10022

Copies of all notices, orders, oral or written communications or questions regarding this Application should be directed to the individuals and addresses indicated on the first page of this Application.

Stacy H. Louizos
Blank Rome, LLP
1271 Avenue of the Americas
New York, NY 10020
slouzos@blankrome.com
Phone: 212.885.5147

Applicants desire that the Commission issue the requested order pursuant to Rule 0-5 under the 1940 Act without conducting a hearing.

## VII. CONCLUSION

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For the foregoing reasons, Applicants respectfully request that the Commission issue an order under Section 6(c) of the 1940 Act granting the relief requested in the Application. Applicants submit that the requested exemption is necessary or appropriate in the public interest, consistent with the protection of investors, and consistent with the purpose fairly intended by the policy and provisions of the 1940 Act.

[Signature Page Follows]

17

IN WITNESS WHEREOF, each Applicant has caused this Application to be duly executed as of the date set forth below:

Respectfully submitted,
ADVISORS SERIES TRUST

By: /s/ Jeffrey T. Rauman

Name: Jeffrey T. Rauman

Title: President and Chief Executive Officer

SEMPER CAPITAL MANAGEMENT, L.P.

By: /s/ Stephen C. Ellwood

Name: Stephen C. Ellwood

Title: Chief Operating Officer/Chief Legal Officer

TWO ROADS SHARED TRUST

By: /s/ James Colantino

Name: James Colantino

Title: President

Date: January 24, 2023

HYPATIA CAPITAL MANAGEMENT LLC

By: /s/ John Grenawalt

Name: John Grenawalt

Title: Chief Operating Officer

Date: January 24, 2023

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# **EXHIBITS TO APPLICATION**

The following materials are made a part of the Application and are attached hereto:
November 12, 2021

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# **EXHIBIT INDEX**

| Designation | Page Number | Sequential Document |
| --- | --- | --- |
| Exhibits A-1 through A-2 |  | Authorizing Resolutions of Advisors Series Trust A-1 Authorizations |
| Exhibits B-1 through B-2 |  | Verification of Advisors Series Trust Pursuant to Rule 0-2(d) B-1 Verifications |
| B-2 Exhibit C |  | Verification of Semper Capital Management, L.P. Pursuant to Rule 0-2(d) B-2 Rule 0-5(e)(3) Comparisons |

19

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# EXHIBIT A-1

# **ADVISORS SERIES AUTHORIZATION OF TWO ROADS SHARED TRUST**

Authorization to File Exemptive Order

Application Relating to the Fund

The undersigned, Elaine Richards Timothy Burdick, hereby certifies that she is the duly appointed elected Secretary of the Advisors Series Two Roads Shared Trust (the “Trust”); that, with respect to the attached application for exemption from the provisions of the Investment Company Act of 1940 (the “1940 Act”), the rules and forms thereunder and any amendments thereto (such application along with any amendments, the “Application”), all actions necessary to authorize the execution and filing of the Application under the Amended Agreement and Declaration of Trust and Amended and Restated By-Laws of the Trust have been taken and the person signing and filing the Application on behalf of the Trust is fully authorized to do so; and that the following is a complete, true and correct copy of the resolutions duly adopted by the Board of Trustees of the Trust on August 10, 2021 at a meeting held on December 20-21, 2022, in accordance with the Amended and Restated By-Laws of the Trust and that such resolutions have not been revoked, modified, rescinded, or amended and are in full force and effect:

WHEREAS, the Board of Trustees of Advisors Series Trust (the “Trust”), including the independent members of the board (collectively, the “Board”), has determined that it is in the best interests of RESOLVED, that the appropriate officers of the Trust are authorized to file on behalf of the Trust an application, in a form satisfactory to such officers and counsel to the Trust, and any subsequent amendments as required, with the Securities and Exchange Commission for an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (“1940 Act”), exempting the Trust and Hypatia Capital Management LLC (the “Adviser”) from the provisions of Section 15(a) of the 1940 Act”), as well as from certain disclosure requirements in rule 20a-1 under the 1940 Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934 (“1934 Act”), and sections 6-07(2)(a), (b), and (c) of Regulation S-X, or from any other provision of the 1940 Act, 1934 Act, or rules thereunder as may be deemed necessary or advisable upon the advice of counsel to the Trust to permit Semper Capital Management, L.P. (the “Adviser”), subject to the supervision of the Trust’s Board of Trustees and certain conditions required by the U.S. Securities and Exchange Commission (“Commission”) and set forth in the amended application for exemptive relief (the “Amended Application”), to enter into and materially amend, for any series of the Trust managed by the Adviser now or hereafter existing that operates consistent with the terms of the Amended exemptive application, investment sub-advisory agreements with various subadvisers, including non-affiliated subadvisers, wholly-owned subadvisers, and affiliated subadvisers, with the approval of the Board, but without obtaining shareholder approval of the applicable series.

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~~NOW, THEREFORE, BE IT RESOLVED, that the filing with the U.S. Securities and Exchange Commission (the “SEC”) by the officers of the Trust, in the name and on behalf of the Trust, of an Amended Application with changes consistent with the SEC comments is approved; and~~
TWO ROADS SHARED TRUST

By: /s/ Timothy Burdick

Name: Timothy Burdick

Title: Secretary

Date: January 24, 2023

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~~FURTHER RESOLVED, that the filing with the SEC by the officers of the Trust, in the name and on behalf of the Trust, of any further amendments to the Amended Application in response to comments from the SEC staff, counsel or the officers of the Trust is approved.~~

~~IN WITNESS WHEREOF, the undersigned have executed this written consent, which may be executed in multiple counterparts, all of which taken together shall constitute one original, as of the 10th day of August, 2021.~~

EXHIBIT A-1-2

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# AUTHORIZATION OF HYPATIA CAPITAL MANAGEMENT LLC

I, John Grenawalt, do hereby certify that I am the duly appointed Chief Operating Officer of Hypatia Capital Management LLC (the “Adviser”) that, with respect to the attached application for exemptive relief from certain provisions of the Investment Company Act of 1940 and any amendments thereto (such application along with any amendments, the “Application”), all actions necessary to authorize the execution and filing of the Application under the Adviser’s organizational documents have been taken and that I am fully authorized to sign and file the Application on behalf of the Adviser; and that the Adviser has adopted the following resolution on December 20, 2022, in accordance with its organizational documents:

RESOLVED, that that the appropriate officers of the Adviser be, and hereby are, authorized to file on behalf of the Adviser an application with the Securities and Exchange Commission for an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (“1940 Act”), exempting Two Roads Shared Trust (“Trust”) and the Adviser from: (i) the provisions of Section 15(a) of the 1940 Act to permit the Adviser, subject to the supervision of the Trust’s Board of Trustees, to appoint new subadvisers to a Trust series for which the Adviser serves as investment adviser (each a “Subadvised Fund”) and to make material changes to the subadvisory agreements with subadvisers to the Subadvised Fund without obtaining shareholder approval of the applicable Subadvised Series; and (ii) the disclosures required pursuant to Item 19(a)(3) of Form N-IA, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A of Schedule 14A, and Sections 6-07(2) (a)-(c) of Regulation S-X relating to subadviser compensation.

HYPATIA CAPITAL MANAGEMENT LLC

By: /s/ John Grenawalt  
Name: John Grenawalt  
Title: Chief Operating Officer  
Date: January 24, 2023

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# EXHIBIT B-1

# ADVISORS SERIES VERIFICATION TWO ROADS SHARED TRUST

# VERIFICATION PURSUANT TO RULE 0-2(d)

The undersigned states he has duly executed the attached Application dated ~~November 12, 2021, for~~ and ~~January 24, 2023 for an order pursuant to Section 6(c) of the Investment Company Act of 1940~~ (“1940 Act”), on behalf of ~~Advisors Series~~ Two Roads Shared Trust (the “Trust”); that he is President ~~and Chief Executive Officer of such trust~~ of the Trust and is authorized to sign the Application on behalf of the Trust; and that all action by shareholders, ~~and the Trust’s Board of Trustees and other bodies~~ necessary to authorize the undersigned to execute and file ~~such instrument~~ the Application has been taken. The undersigned further ~~says~~ states that he is familiar with ~~such instrument~~ the Application, and the contents thereof, and ~~that~~ the facts therein set forth are true to the best of his knowledge, information, and belief.

By: /s/ Jeffrey T. Rauman

Name: Jeffrey T. Rauman

Title: President and Chief Executive Officer

# B-1

21

# TWO ROADS SHARED TRUST

By: /s/ James Colantino

Name: James Colantino

Title: President

Date: January 24, 2023

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# EXHIBIT B-2

# ~~SEMPER~~VERIFICATION HYPATIA CAPITAL MANAGEMENT, ~~L.P.~~ LLC

# ~~VERIFICATION PURSUANT TO RULE 0-2(d)~~

The undersigned states that he has duly executed the attached Application dated ~~November 12, 2021, for and~~ January 24, 2023 for an order pursuant to Section 6(c) of the Investment Company Act of 1940 (the “1940 Act”), on behalf of ~~Semper~~ Hypatia Capital Management, ~~L.P.~~ LLC; that he is ~~an Officer of such company~~ Chief Operating Officer of Hypatia Capital Management LLC and is authorized to sign the Application on behalf of Hypatia Capital Management LLC; and that all action by the officers, ~~directors~~ and other ~~bodies~~ persons necessary to authorize the undersigned to execute and file ~~such instrument~~ the Application has been taken. The undersigned further ~~says~~ states that he is familiar with ~~such instrument~~ the Application, and the contents thereof, and ~~that~~ the facts therein set forth are true to the best of his knowledge, information, and belief.

# ~~SEMPER~~HYPATIA CAPITAL MANAGEMENT, ~~L.P.~~ LLC

~~By: /s/ Stephen C. Ellwood~~

~~Name: Stephen C. Ellwood~~

~~Title: Chief Operating Officer/Chief Legal Officer~~

By: /s/ John Grenawalt

Name: John Grenawalt

Title: Chief Operating Officer

Date: January 24, 2023

B-2

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