Document ID: SEC-2010-0336-0001
Agency: sec
Document Type: Notice
Title: Applications: First Trust/Aberdeen Global Opportunity Income Fund, et al.
Posted Date: 2010-03-04T05:00Z

[Federal Register: March 4, 2010 (Volume 75, Number 42)]
[Notices]               
[Page 9960-9964]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04mr10-114]                         

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SECURITIES AND EXCHANGE COMMISSION

Investment Company Act Release No. 29163; 812-13161-01]

 
First Trust/Aberdeen Global Opportunity Income Fund, et al.; 
Notice of Application

February 26, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 19(b) of 
the Act and rule 19b-1 under the Act.

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 Summary of Application: Applicants request an order to permit certain 
closed-end investment companies to make periodic distributions of long-
term capital gains with respect to their outstanding common stock as 
frequently as twelve times each year, and as frequently as 
distributions are specified by or in accordance with the terms of any 
outstanding preferred stock that such investment companies may issue.

 Applicants: First Trust/Aberdeen Global Opportunity Income Fund, First 
Trust Enhanced Equity Income Fund, First Trust/Four Corners Senior 
Floating Rate Income Fund, First Trust/Four Corners Senior Floating 
Rate Income Fund II, Macquarie/First Trust Global Infrastructure/
Utilities Dividend & Income Fund, First Trust/FIDAC Mortgage Income 
Fund, First Trust Strategic High Income Fund, First Trust Strategic 
High Income Fund II, First Trust Strategic High Income Fund III, First 
Trust/Aberdeen Emerging Opportunity Fund, First Trust Specialty Finance 
and Financial Opportunities Fund, First Trust Active Dividend Income 
Fund, First Trust Municipal Target Term Trust, First Trust/StoneCastle 
Bank Select Income Fund, First Trust Income Fund, First Trust/Chartwell 
Total Return Equity Income Fund, First Trust/Aberdeen Global Credit 
Strategies Fund (collectively, the ``Current Funds''), First Trust 
Advisors L.P. (the ``Adviser'') and First Trust Portfolios, L.P. (the 
``Broker-Dealer'').

 Filing Dates: January 26, 2005, August 9, 2007, September 9, 2008, 
December 12, 2008, April 20, 2009 and August 11, 2009.

 Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on March 23, 2010, and should be accompanied by proof of service 
on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090; Applicants, Chapman and Cutler LLP, 111 
West Monroe St., Chicago, Illinois 60603, attention: Eric F. Fess, Esq. 
and Suzanne M. Russell, Esq.

FOR FURTHER INFORMATION CONTACT: Wendy Friedlander, Senior Counsel, at 
(202) 551-6837, or James M. Curtis, Branch Chief, at (202) 551-6712 
(Division of Investment Management, Office of Chief Counsel).

SUPPLEMENTARY INFORMATION: The following is a summary of the

[[Page 9961]]

application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.
    Applicants' Representations:
    1. Each Current Fund and any future fund that may rely on the 
requested order (each a ``Fund'' and collectively the ``Funds'') is or 
will be registered under the Act as a closed-end management investment 
company.\1\ Each Fund's common stock is or will be listed and traded on 
a ``national securities exchange,'' as defined in section 2(a)(26) of 
the Act. Any preferred stock that has been or may be issued by a Fund 
is not and will not be listed or traded on any exchange. Applicants 
believe that the common stockholders of the Funds are or will be 
generally conservative, dividend- and income-sensitive investors who 
desire current income periodically.
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    \1\ Applicants request that any order issued granting the relief 
requested in the application also apply to any closed-end investment 
company that in the future: (a) is advised by the Adviser (including 
any successor in interest) or by any entity controlling, controlled 
by, or under common control (within the meaning of section 2(a)(9) 
of the Act) with the Adviser; and (b) complies with the terms and 
conditions of the requested order. A successor in interest is 
limited to entities that result from a reorganization into another 
jurisdiction or a change in the type of business organization.
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    2. The Adviser is an Illinois limited partnership and is registered 
under the Investment Advisers Act of 1940. The Adviser is or will be 
responsible for implementing each Fund's overall investment strategy. 
The Adviser is controlled by Grace Partners of DuPage L.P. (``Grace'') 
and The Charger Corporation (``Charger''). Grace's general partner is 
Charger, which is controlled by the Robert Donald Van Kampen family.
    3. The Broker-Dealer is registered under the Securities Exchange 
Act of 1934 as a broker-dealer and is an ``affiliated person'' of the 
Adviser as defined in section 2(a)(3) of the Act. Applicants represent 
that the Broker-Dealer maintains a Web site that includes information 
on financial products that it offers or distributes, including 
information about the Current Funds that have issued publicly-offered 
stock.
    4. Applicants represent that, before any Fund will implement a 
policy to make level, periodic distributions with respect to its common 
stock, the board of trustees (the ``Board'') of such Fund, including a 
majority of the trustees who are not ``interested persons'' as defined 
in Section 2(a)(19) of the Act (each an ``Independent Trustee'') of the 
respective Fund will approve the Fund's adoption of such policy. 
Applicants represent that the Board will request, and the Adviser will 
provide, such information as is reasonably necessary for the Board to 
make an informed determination of whether the Fund should adopt the 
proposed distribution policy. Applicants represent that, in particular, 
the Board, including the Independent Trustees, will review information 
regarding the purpose and terms of the proposed distribution policy, 
the likely effects of such policy on the Fund's long-term total return 
(in relation to market price and net asset value (``NAV'') per common 
share) and the relationship between the Fund's distribution rate on its 
common stock under the policy and the Fund's total return (in relation 
to NAV per common share). Applicants represent that the Independent 
Trustees also will consider what conflicts of interest the Adviser and 
the affiliated persons of the Adviser and the Fund might have with 
respect to the adoption or implementation of such policy. Applicants 
represent that after considering such information the Board, including 
the Independent Trustees, will approve the distribution policy with 
respect to the Fund's common stock (the ``Plan''), provided that the 
Board, including the Independent Trustees, determines that the Plan is 
consistent with the Fund's investment objective(s) and in the best 
interests of the Fund's common stockholders.
    5. Applicants represent that the purpose of any Plan will be to 
permit a Fund to provide its common stockholders with level, periodic 
distributions. Applicants represent that, under the Plan of a Fund, 
such Fund would distribute to its respective common stockholders a 
fixed percentage of the market price of the Fund's common stock at a 
particular point in time or a fixed percentage of NAV per common share 
at a particular point in time or a fixed amount per common share, any 
of which may be adjusted from time to time. Applicants state that the 
minimum annual distribution rate with respect to a Fund's common stock 
under its respective Plan would be independent of the Fund's 
performance during any particular period but would be expected to 
correlate with the Fund's performance over time. Applicants explain 
that each distribution on the common stock would be at the stated rate 
then in effect except for extraordinary distributions and potential 
increases or decreases in the final dividend periods in light of the 
Fund's performance for the entire calendar or taxable year and to 
enable the Fund to comply with the distribution requirements of 
Subchapter M of the Internal Revenue Code of 1986 (the ``Code'') for 
the calendar or taxable year.
    6. Applicants represent that the Board of each Fund that relies on 
the order also will approve the Fund's adoption of policies and 
procedures under rule 38a-1 under the Act that are reasonably designed 
to ensure that all notices sent to stockholders with distributions 
under the Plan (``Notices'') comply with condition II.A below, and that 
all other written communications by any such Fund or its agents 
regarding distributions under the Plan include the disclosure required 
by condition III.A below. Applicants state that the Board of each Fund 
also will approve the Fund's adoption of policies and procedures that 
require such Fund to keep records that demonstrate the Fund's 
compliance with all of the conditions of the requested order and that 
are necessary for the Fund to form the basis for, or demonstrate the 
calculation of, the amounts disclosed in its Notices.
    Applicants' Legal Analysis:
    1. Section 19(b) generally makes it unlawful for any registered 
investment company to make long-term capital gains distributions more 
than once each year. Rule 19b-1 limits the number of capital gains 
dividends, as defined in section 852(b)(3)(C) of the Code 
(``distributions''), that a fund may make with respect to any one 
taxable year to one, plus a supplemental ``clean up'' distribution made 
pursuant to section 855 of the Code not exceeding 10% of the total 
amount distributed for the year, plus one additional capital gain 
dividend made in whole or in part to avoid the excise tax under section 
4982 of the Code.
    2. Section 6(c) provides that the Commission may, by order upon 
application, conditionally or unconditionally exempt any person, 
security, or transaction, or any class or classes of persons, 
securities or transactions, from any provision of the Act, if and to 
the extent that the exemption is necessary or appropriate in the public 
interest and consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the Act.
    3. Applicants state that the one of the concerns underlying section 
19(b) and rule 19b-1 is that shareholders might be unable to 
differentiate between regular distributions of capital gains and 
distributions of investment income.

[[Page 9962]]

Applicants state, however, that rule 19a-1 effectively addresses this 
concern by requiring that a separate statement showing the sources of a 
distribution (e.g., estimated net income, net short-term capital gains, 
net long-term capital gains and/or return of capital) accompany any 
distributions (or the confirmation of the reinvestment of 
distributions) estimated to be sourced in part from capital gains or 
capital. Applicants state that the same information also is included in 
each fund's reports to shareholders and on its IRS Form 1099-DIV, which 
is sent to each common and preferred shareholder who received 
distributions during the year.
    4. Applicants further state that each Fund will make the additional 
disclosures required by the conditions set forth below, and each of 
them will adopt compliance policies and procedures in accordance with 
rule 38a-1 to ensure that all required Notices and disclosures are sent 
to shareholders. Applicants argue that by providing the information 
required by section 19(a) and rule 19a-1, and by complying with the 
procedures adopted under each Plan and the conditions listed below, the 
Funds would ensure that each Fund's shareholders are provided 
sufficient information to understand that their periodic distributions 
are not tied to the Fund's net investment income (which for this 
purpose is the Fund's taxable income other than from capital gains) and 
realized capital gains to date, and may not represent yield or 
investment return. Applicants also state that compliance with each 
Fund's compliance procedures and condition III set forth below will 
ensure that prospective shareholders and third parties are provided 
with the same information. Accordingly, applicants assert that 
continuing to subject the Funds to section 19(b) and rule 19b-1 would 
afford shareholders no extra protection.
    5. Applicants note that section 19(b) and rule 19b-1 also were 
intended to prevent certain improper sales practices, including, in 
particular, the practice of urging an investor to purchase shares of a 
fund on the basis of an upcoming capital gains dividend (``selling the 
dividend''), where the dividend would result in an immediate 
corresponding reduction in NAV and would be in effect a taxable return 
of the investor's capital. Applicants assert that the ``selling the 
dividend'' concern should not apply to closed-end investment companies 
which do not continuously distribute shares. According to Applicants, 
if the underlying concern extends to secondary market purchases of 
shares of closed-end funds that are subject to a large upcoming capital 
gains dividend, adoption of a Plan actually helps minimize the concern 
by avoiding, through periodic distributions, any buildup of large end-
of-the-year distributions.
    6. Applicants also note that common shares of closed-end funds that 
invest primarily in equity securities often trade in the marketplace at 
a discount to their NAV. Applicants believe that this discount may be 
reduced for closed-end funds that pay relatively frequent dividends on 
their common shares at a consistent rate, whether or not those 
dividends contain an element of long-term capital gain.
    7. Applicants assert that the application of rule 19b-1 to a Plan 
actually could have an undesirable influence on portfolio management 
decisions. Applicants state that, in the absence of an exemption from 
rule 19b-1, the implementation of a Plan imposes pressure on management 
(i) not to realize any net long-term capital gains until the point in 
the year that the fund can pay all of its remaining distributions in 
accordance with rule 19b-1, and (ii) not to realize any long-term 
capital gains during any particular year in excess of the amount of the 
aggregate pay-out for the year (since as a practical matter excess 
gains must be distributed and accordingly would not be available to 
satisfy pay-out requirements in following years), notwithstanding that 
purely investment considerations might favor realization of long-term 
gains at different times or in different amounts. Applicants thus 
assert that the limitation on the number of capital gains distributions 
that a fund may make with respect to any one year imposed by rule 19b-1 
may prevent the efficient operation of a Plan whenever that fund's 
realized net long-term capital gains in any year exceed the total of 
the periodic distributions that may include such capital gains under 
the rule.
    8. In addition, Applicants assert that rule 19b-1 may cause fixed 
regular periodic distributions under a Plan to be funded with returns 
of capital \2\ (to the extent net investment income and realized short-
term capital gains are insufficient to fund the distribution), even 
though realized net long-term capital gains otherwise could be 
available. To distribute all of a fund's long-term capital gains within 
the limits in rule 19b-1, a fund may be required to make total 
distributions in excess of the annual amount called for by its Plan, or 
to retain and pay taxes on the excess amount. Applicants thus assert 
that the requested order would minimize these effects of rule 19b-1 by 
enabling the funds to realize long-term capital gains as often as 
investment considerations dictate without fear of violating rule 19b-1.
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    \2\ Returns of capital as used in the application means return 
of capital for financial accounting purposes and not for tax 
accounting purposes.
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    9. Applicants state that Revenue Ruling 89-81 under the Code 
requires that a fund that has both common stock and preferred stock 
outstanding designate the types of income, e.g., investment income and 
capital gains, in the same proportion as the total distributions 
distributed to each class for the tax year. To satisfy the 
proportionate designation requirements of Revenue Ruling 89-81, 
whenever a fund has realized a long-term capital gain with respect to a 
given tax year, the fund must designate the required proportionate 
share of such capital gain to be included in common and preferred stock 
dividends. Applicants state that although rule 19b-1 allows a fund some 
flexibility with respect to the frequency of capital gains 
distributions, a fund might use all of the exceptions available under 
the rule for a tax year and still need to distribute additional capital 
gains allocated to the preferred stock to comply with Revenue Ruling 
89-81.
    10. Applicants assert that the potential abuses addressed by 
section 19(b) and rule 19b-1 do not arise with respect to preferred 
stock issued by a closed-end fund. Applicants assert that such 
distributions are fixed or determined in periodic auctions by reference 
to short-term interest rates rather than by reference to performance of 
the issuer and Revenue Ruling 89-81 determines the proportion of such 
distributions that are comprised of the long-term capital gains.
    11. Applicants also submit that the ``selling the dividend'' 
concern is not applicable to preferred stock, which entitles a holder 
to no more than a periodic dividend at a fixed rate or the rate 
determined by the market, and, like a debt security, is priced based 
upon its liquidation value, credit quality, and frequency of payment. 
Applicants state that investors buy preferred shares for the purpose of 
receiving payments at the frequency bargained for, and do not expect 
the liquidation value of their shares to change.
    12. Applicants request an order under section 6(c) granting an 
exemption from the provisions of section 19(b) and rule 19b-1 to permit 
each Fund to distribute periodic capital gains dividends (as defined in 
section 852(b)(3)(C) of the Code) as often as monthly in any one 
taxable year in respect of its common

[[Page 9963]]

stock and as often as specified by or determined in accordance with the 
terms thereof in respect of its preferred stock.\3\
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    \3\ Applicants state that a future fund that relies on the 
requested order will satisfy each of the representations in the 
application except that such representations will be made in respect 
of actions by the board of trustees of such future fund and will be 
made at a future time.
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    Applicants' Conditions:
    Applicants agree that, with respect to each Fund seeking to rely on 
the order, the order will be subject to the following conditions:
    I. Compliance Review and Reporting. The fund's chief compliance 
officer will: (a) Report to the fund Board, no less frequently than 
once every three months or at the next regularly scheduled quarterly 
board meeting, whether (i) the fund and the Adviser have complied with 
the conditions to the requested order, and (ii) a Material Compliance 
Matter, as defined in rule 38a-1(e)(2), has occurred with respect to 
compliance with such conditions; and (b) review the adequacy of the 
policies and procedures adopted by the fund no less frequently than 
annually.
    II. Disclosures to Fund Shareholders:
    A. Each Notice to The holders of the fund's common stock, in 
addition to the information required by section 19(a) and rule 19a-1:
    1. Will provide, in a tabular or graphical format:
    (a) The amount of the distribution, on a per common share basis, 
together with the amounts of such distribution amount, on a per common 
share basis and as a percentage of such distribution amount, from 
estimated: (A) Net investment income; (B) net realized short-term 
capital gains; (C) net realized long-term capital gains; and (D) return 
of capital or other capital source;
    (b) The fiscal year-to-date cumulative amount of distributions, on 
a per common share basis, together with the amounts of such cumulative 
amount, on a per common share basis and as a percentage of such 
cumulative amount of distributions, from estimated: (A) Net investment 
income; (B) net realized short-term capital gains; (C) net realized 
long-term capital gains; and (D) return of capital or other capital 
source;
    (c) The average annual total return in relation to the change in 
NAV for the 5-year period (or, if the fund's history of operations is 
less than five years, the time period commencing immediately following 
the fund's first public offering) ending on the last day of the month 
prior to the most recent distribution record date compared to the 
current fiscal period's annualized distribution rate expressed as a 
percentage of NAV as of the last day of the month prior to the most 
recent distribution record date; and
    (d) The cumulative total return in relation to the change in NAV 
from the last completed fiscal year to the last day of the month prior 
to the most recent distribution record date compared to the fiscal 
year-to-date cumulative distribution rate expressed as a percentage of 
NAV as of the last day of the month prior to the most recent 
distribution record date.
    Such disclosure shall be made in a type size at least as large and 
as prominent as the estimate of the sources of the current 
distribution; and
    2. will include the following disclosure:
    (a) ``You should not draw any conclusions about the fund's 
investment performance from the amount of this distribution or from the 
terms of the fund's Plan'';
    (b) ``The fund estimates that it has distributed more than its 
income and net realized capital gains; therefore, a portion of your 
distribution may be a return of capital. A return of capital may occur 
for example, when some or all of the money that you invested in the 
fund is paid back to you. A return of capital distribution does not 
necessarily reflect the fund's investment performance and should not be 
confused with `yield' or `income' '';\4\ and
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    \4\ This disclosure will be included only if the current 
distribution or the fiscal year-to-date cumulative distributions are 
estimated to include a return of capital.
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    (c) ``The amounts and sources of distributions reported in this 
Notice are only estimates and are not being provided for tax reporting 
purposes. The actual amounts and sources of the amounts for tax 
reporting purposes will depend upon the fund's investment experience 
during the remainder of its fiscal year and may be subject to changes 
based on tax regulations. The fund will send you a Form 1099-DIV for 
the calendar year that will tell you how to report these distributions 
for federal income tax purposes.''
    Such disclosure shall be made in a type size at least as large as 
and as prominent as any other information in the Notice and placed on 
the same page in close proximity to the amount and the sources of the 
distribution.
    B. On the inside front cover of each report to shareholders under 
rule 30e-1 under the Act, the fund will:
    1. Describe the terms of the Plan (including the fixed amount or 
fixed percentage of the distributions and the frequency of the 
distributions);
    2. Include the disclosure required by condition II.A.2.a above;
    3. State, if applicable, that the Plan provides that the Board may 
amend or terminate the Plan at any time without prior notice to fund 
shareholders; and
    4. Describe any reasonably foreseeable circumstances that might 
cause the fund to terminate the Plan and any reasonably foreseeable 
consequences of such termination.
    C. Each report provided to shareholders under rule 30e-1 and each 
prospectus filed with the Commission on Form N-2 under the Act, will 
provide the fund's total return in relation to changes in NAV in the 
financial highlights table and in any discussion about the fund's total 
return.
    III. Disclosure to Shareholders, Prospective Shareholders and Third 
Parties:
    A. The fund will include the information contained in the relevant 
Notice, including the disclosure required by condition II.A.2 above, in 
any written communication (other than a Form 1099) about the Plan or 
distributions under the Plan by the fund, or agents that the fund has 
authorized to make such communication on the fund's behalf, to any fund 
common shareholder, prospective common shareholder or third-party 
information provider;
    B. The fund will issue, contemporaneously with the issuance of any 
Notice, a press release containing the information in the Notice and 
will file with the Commission the information contained in such Notice, 
including the disclosure required by condition II.A.2 above, as an 
exhibit to its next filed Form N-CSR; and
    C. The fund will post prominently on the Web site maintained by the 
Broker-Dealer, an affiliated person of the Adviser, a statement 
containing the information in each Notice, including the disclosure 
required by condition II.A.2 above, and will maintain such information 
on such Web site for at least 24 months.\5\
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    \5\ None of the funds nor the Adviser maintains a Web site. 
First Trust Portfolios, a registered broker-dealer and an affiliate 
of the Adviser, maintains a Web site that is used by the Adviser and 
the funds.
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    IV. Delivery of Notices to Beneficial Owners: If a broker, dealer, 
bank or other person (``financial intermediary'') holds common stock 
issued by the fund in nominee name, or otherwise, on behalf of a 
beneficial owner, the fund: (a) Will request that the financial 
intermediary, or its agent, forward the Notice to all beneficial owners 
of the fund's stock held through such financial intermediary; (b) will 
provide, in a timely manner, to the financial intermediary, or its 
agent, enough

[[Page 9964]]

copies of the Notice assembled in the form and at the place that the 
financial intermediary, or its agent, reasonably requests to facilitate 
the financial intermediary's sending of the Notice to each beneficial 
owner of the fund's stock; and (c) upon the request of any financial 
intermediary, or its agent, that receives copies of the Notice, will 
pay the financial intermediary, or its agent, the reasonable expenses 
of sending the Notice to such beneficial owners.
    V. Additional Board Determinations for Funds Whose Shares Trade at 
a Premium: If:
    A. The fund's common stock has traded on the exchange that it 
primarily trades on at the time in question at an average premium to 
NAV equal to or greater than 10%, as determined on the basis of the 
average of the discount or premium to NAV of the fund's common stock as 
of the close of each trading day over a 12-week rolling period (each 
such 12-week rolling period ending on the last trading day of each 
week); and
    B. The fund's annualized distribution rate for such 12-week rolling 
period, expressed as a percentage of NAV as of the ending date of such 
12-week rolling period, is greater than the fund's average annual total 
return in relation to the change in NAV over the 2-year period ending 
on the last day of such 12-week rolling period; then:
    1. At the earlier of the next regularly scheduled meeting or within 
four months of the last day of such 12-week rolling period the Board, 
including a majority of the Independent Trustees:
    (a) Will request and evaluate, and the Adviser will furnish, such 
information as may be reasonably necessary to make an informed 
determination of whether the Plan should be continued or continued 
after amendment;
    (b) Will determine whether continuation, or continuation after 
amendment, of the Plan is consistent with the fund's investment 
objective(s) and policies and in the best interests of the fund and its 
stockholders, after considering the information in condition V.B.1.a 
above; including, without limitation:
    (1) Whether the Plan is accomplishing its purpose(s);
    (2) The reasonably foreseeable effects of the Plan on the fund's 
long-term total return in relation to the market price and NAV of the 
fund's common stock; and
    (3) The fund's current distribution rate, as described in condition 
V.B above, compared to with the fund's average annual total return over 
the 2-year period, as described in condition V.B, or such longer period 
as the board deems appropriate; and
    (c) Based upon that determination, will approve or disapprove the 
continuation, or continuation after amendment, of the Plan; and
    2. The Board will record the information considered by it and the 
basis for its approval or disapproval of the continuation, or 
continuation after amendment, of the Plan in its meeting minutes, which 
must be made and preserved for a period of not less than six years from 
the date of such meeting, the first two years in an easily accessible 
place.
    VI. Public Offerings: The fund will not make a public offering of 
the fund's common stock other than:
    A. A rights offering below NAV to holders of the fund's common 
stock;
    B. An offering in connection with a dividend reinvestment plan, 
merger, consolidation, acquisition, spin-off or reorganization of the 
fund; or
    C. An offering other than an offering described in conditions VI.A 
and VI.B above, unless, with respect to such other offering:
    1. the fund's annualized distribution rate for the six months 
ending on the last day of the month ended immediately prior to the most 
recent distribution declaration date,\6\ expressed as a percentage of 
NAV per share as of such date, is no more than 1 percentage point 
greater than the fund's average annual total return for the 5-year 
period ending on such date; \7\ and
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    \6\ If the fund has been in operation fewer than six months, the 
measured period will begin immediately following the fund's first 
public offering.
    \7\ If the fund has been in operation fewer than five years, the 
measured period will begin immediately following the fund's first 
public offering.
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    2. the transmittal letter accompanying any registration statement 
filed with the Commission in connection with such offering discloses 
that the fund has received an order under section 19(b) to permit it to 
make periodic distributions of long-term capital gains with respect to 
its common stock as frequently as twelve times each year, and as 
frequently as distributions are specified in accordance with the terms 
of any outstanding preferred stock that such fund may issue.
    VII. Amendments to Rule 19b-1. The requested relief will expire on 
the effective date of any amendment to rule 19b-1 that provides relief 
permitting certain closed-end investment companies to make periodic 
distributions of long-term capital gains with respect to their 
outstanding common stock as frequently as twelve times each year.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4516 Filed 3-3-10; 8:45 am]
BILLING CODE 8011-01-P