Document ID: SEC-2015-1486-0001
Agency: sec
Document Type: Notice
Title: Applications: Brookfield Global Listed Infrastructure Income Fund Inc., et al.
Posted Date: 2015-09-09T04:00Z

[Federal Register Volume 80, Number 174 (Wednesday, September 9, 2015)]
[Notices]
[Pages 54353-54357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22602]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31802; File No. 812-14456]

Brookfield Global Listed Infrastructure Income Fund Inc., et al.; 
Notice of Application

September 1, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an 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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    Applicants: Brookfield Global Listed Infrastructure Income Fund 
Inc. (``INF''), Brookfield High Income Fund Inc. (``HHY''), Brookfield 
Mortgage Opportunity Income Fund Inc. (``BOI''), Brookfield Total 
Return Fund Inc. (``HTR,'' together with INF, HHY, and BOI, the 
``Funds''), and Brookfield Investment Management Inc. (``BIM'').

SUMMARY: Applicants request an order to permit certain registered 
closed-end investment companies to make periodic distributions of long-
term capital gains with respect to their outstanding common shares as 
frequently as monthly in any one taxable year, and as frequently as 
distributions are specified by or in accordance with the terms of any 
outstanding preferred shares that such investment companies may issue.

DATES: Filing Dates: The application was filed on June 6, 2015 and 
amended on August 13, 2015.
    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 September 28, 2015 and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090; Applicants, Brookfield Place, 
250 Vesey Street, New York, NY 10281-1023.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 
551-6870, or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division 
of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicants' Representations

    1. INF, HHY, BOI and HRT are Maryland corporations registered as 
closed-end management investment companies.\1\ INF's investment 
objective is to provide a high total return, with an emphasis on 
income, which it seeks to achieve by investing in publicly traded 
equity securities of infrastructure companies listed on a domestic or 
foreign exchange. HHY's primary investment objective is to seek high 
current income by investing in high yield bonds, debentures, notes, 
corporate loans, convertible debentures and other debt instruments. 
BOI's primary investment objective is to seek high total investment 
return by investing primarily in mortgage-related debt securities and 
other mortgage-related instruments. HTR's primary investment objective 
is to provide a high total return, including short and long-term 
capital gains and a high level of current income by investing primarily 
in U.S. Treasury, mortgage-backed, asset-backed and high-yield 
corporate securities. The common shares of each of the Funds are listed 
and traded on the New York Stock Exchange. Although none of the Funds 
currently intend to issue preferred shares, the board of directors 
(``Board'') of each Fund may authorize the issuance of preferred shares 
in the future.
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    \1\ All existing registered closed-end investment companies that 
currently intend to rely on the order have been named as applicants. 
Applicants request that the order also apply to each other 
registered closed-end investment company advised or to be advised in 
the future by BIM or by an entity controlling, controlled by, or 
under common control (within the meaning of section 2(a)(9) of the 
Act) with BIM (including any successor in interest) (each such 
entity, including BIM, the ``Adviser'') that in the future seeks to 
rely on the order (such investment companies, together with INF, 
HHY, BOI and HTR, are collectively, the ``Funds'' and individually, 
a ``Fund''). Any Fund that may rely on the order in the future will 
comply with the terms and conditions of the application. 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. BIM, a Delaware corporation, is registered under the Investment 
Advisers Act of 1940 (the ``Advisers Act'') as an investment adviser. 
BIM serves as investment adviser to INF, HHY, BOI and HTR. Each Adviser 
to a Fund will be registered under the Advisers Act.
    3. Applicants believe that investors in closed-end funds may prefer 
an investment vehicle that provides regular current income through 
fixed distribution policies that would be available through a 
distribution policy (``Distribution Policy''). Applicants state that 
prior to a Fund's implementing a Distribution Policy in reliance on the 
order, the Board of each Fund, including a majority of the directors 
who are not ``interested persons'' of the Fund, as defined in section 
2(a)(19) of

[[Page 54354]]

the Act (the ``Independent Directors''), will request, and the Adviser 
will provide, such information as is reasonably necessary to make an 
informed determination of whether the Board should adopt a proposed 
Distribution Policy. In particular, the Board and the Independent 
Directors will review information regarding the purpose and terms of 
the Distribution Policy; the likely effects of the policy on the Fund's 
long-term total return (in relation to market price and its net asset 
value per common share (``NAV'')); the expected relationship between 
the Fund's distribution rate on its common shares under the policy and 
the Fund's total return (in relation to NAV); whether the rate of 
distribution is anticipated to exceed such Fund's expected total return 
in relation to its NAV; and any foreseeable material effects of the 
policy on the Fund's long-term total return (in relation to market 
price and NAV). The Independent Directors will also 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 the Distribution Policy. Applicants state that, only 
after considering such information will the Board, including the 
Independent Directors, of each Fund approve a Distribution Policy and 
in connection with such approval will determine that the Distribution 
Policy is consistent with a Fund's investment objective(s) and in the 
best interests of the Fund's common shareholders.
    4. Applicants state that the purpose of a Distribution Policy, 
generally, would be to permit a Fund to distribute over the course of 
each year, through periodic distributions in relatively equal amounts 
(plus any required special distributions) that are comprised of 
payments received from portfolio holdings, supplemental amounts 
generally representing capital gains or, possibly, returns of capital 
that may represent unrealized capital gains. The Fund seeks to 
establish a distribution rate that approximates that Fund's projected 
total return that can reasonably be expected to be generated by the 
Fund over an extended period of time, although the distribution rate 
will not be solely dependent on the amount of income earned or capital 
gains realized by the Fund. Under the Distribution Policy of a Fund, 
such Fund would distribute to its respective common shareholders a 
fixed percentage of the market price of such Fund's common shares at a 
particular point in time or a fixed percentage of NAV at a particular 
time or a fixed amount per common share, any of which may be adjusted 
from time to time. It is anticipated that under a Distribution Policy, 
the minimum annual distribution rate with respect to a Fund's common 
shares 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. Except for extraordinary distributions and 
potential increases or decreases in the amount of the distributions in 
the final dividend period in light of a Fund's projected performance 
for the entire calendar year and to enable the Fund to comply with the 
distribution requirements of Subchapter M of the Internal Revenue Code 
(``Code'') for the calendar year, each distribution on the Fund's 
common shares would be at the stated rate then in effect.
    5. Applicants state that prior to the implementation of a 
Distribution Policy for any Fund in reliance on the order, the Board of 
such Fund will have adopted policies and procedures under rule 38a-1 
under the Act that: (i) Are reasonably designed to ensure that all 
notices required to be sent to the Fund's shareholders pursuant to 
section 19(a) of the Act, rule 19a-1 thereunder and condition 4 below 
(each a ``19(a) Notice'') include the disclosure required by rule 19a-1 
under the Act and by condition 2(a) below, and that all other written 
communications by the Fund or its agents regarding distributions under 
the Distribution Policy include the disclosure required by condition 
3(a) below; and (ii) require the Fund to keep records that demonstrate 
its compliance with all of the conditions of the order and that are 
necessary for such Fund to form the basis for, or demonstrate the 
calculation of, the amounts disclosed in its 19(a) Notices.

Applicants' Legal Analysis

    1. Section 19(b) of the Act generally makes it unlawful for any 
registered investment company to make long-term capital gains 
distributions more than once every twelve months. 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 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) of the Act provides, in relevant part, that the 
Commission may exempt any person or transaction from any provision of 
the Act to the extent that such exemption is necessary or appropriate 
in the public interest and consistent with the protection of investors 
and the purposes fairly intended by the policy and provisions of the 
Act.
    3. Applicants state that one of the concerns leading to the 
enactment of section 19(b) and adoption of rule 19b-1 was that 
shareholders might be unable to distinguish between frequent 
distributions of capital gains and dividends from investment income. 
Applicants state, however, that rule 19a-1 effectively addresses this 
concern by requiring that distributions (or the confirmation of the 
reinvestment thereof) estimated to be sourced in part from capital 
gains or capital be accompanied by a separate statement showing the 
sources of the distribution (e.g., estimated net income, net short-term 
capital gains, net long-term capital gains and/or return of capital). 
Applicants state that similar information is included in the Funds' 
annual reports to shareholders and on the Internal Revenue Service Form 
1099 DIV, which is sent to each common and preferred shareholder who 
received distributions during a particular year.
    4. Applicants further state that each Fund will make the additional 
disclosures required by the conditions set forth below, and each Fund 
will adopt compliance policies and procedures in accordance with rule 
38a-1 under the Act to ensure that all required 19(a) Notices and 
disclosures are sent to shareholders. Applicants state that the 
information required by section 19(a), rule 19a-1, the Distribution 
Policy, the policies and procedures under rule 38a-1 noted above, and 
the conditions listed below will help ensure that each Fund's 
shareholders are provided sufficient information to understand that 
their periodic distributions are not tied to a 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. 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

[[Page 54355]]

reduction in NAV and would be in effect a taxable return of the 
investor's capital. Applicants submit that the ``selling the dividend'' 
concern should not apply to closed-end investment companies, such as 
the Funds.\2\ 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 periodic distribution plan actually helps minimize the concern by 
avoiding, through periodic distributions, any buildup of large end-of-
the-year distributions.
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    \2\ Applicants note that none Funds currently advised by BIM, 
including INF, HHY, BOI, or HTR, offer or intend to offer their 
shares by means of a shelf registration statement. However, to the 
extent that any Fund may do so in the future, shares will be offered 
in this manner only when they are trading at a premium to NAV, and 
not on the basis of an upcoming capital gains dividend, thus 
minimizing the likelihood of improper fund share sales practices. 
Any such offering of shares of a Fund will be made in compliance 
with condition 6 below.
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    6. Applicants also note that the common stock of closed-end funds 
often trades in the marketplace at a discount to its NAV. Applicants 
believe that this discount may be reduced if the Funds are permitted to 
pay relatively frequent dividends on their common shares at a 
consistent rate, whether or not those dividends contain an element of 
long-term capital gains.
    7. Applicants assert that the application of rule 19b-1 to a 
Distribution Policy actually could have an inappropriate influence on 
portfolio management decisions. Applicants state that, in the absence 
of an exemption from rule 19b-1, the adoption of a periodic 
distribution 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 assert that by limiting the 
number of long-term capital gain dividends that a Fund may make with 
respect to any one year, rule 19b-1 may prevent the normal and 
efficient operation of a periodic distribution 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. Applicants also assert that rule 19b-1 may force fixed regular 
periodic distributions under a periodic distribution plan to be funded 
with returns of capital \3\ (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 would 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 periodic distribution plan, or to retain and pay taxes on the 
excess amount. Applicants assert that the requested order would 
minimize these anomalous 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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    \3\ 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 seeks to qualify as a regulated investment 
company under the Code and that has both common stock and preferred 
shares 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 share 
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 shares 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 
shares issued by a closed-end fund. Applicants assert that such 
distributions generally are either 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 
long-term capital gains.
    11. Applicants also submit that the ``selling the dividend'' 
concern is not applicable to preferred shares, which entitles a holder 
to no more than a specified periodic dividend at a fixed rate or the 
rate determined by the market, and, like a debt security, is priced 
based upon its liquidation preference, dividend rate, 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 any application of rule 19b-1 to preferred shares would be 
contrary to the expectation of investors.
    12. Applicants request an order under section 6(c) of the Act 
granting an exemption from the provisions of section 19(b) of the Act 
and rule 19b-1 thereunder to permit each Fund to distribute periodic 
capital gain dividends (as defined in section 852(b)(3)(C) of the Code) 
as frequently as monthly in any one taxable year in respect of its 
common shares and as often as specified by, or determined in accordance 
with the terms of, any preferred shares issued by the Fund.

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:
    1. Compliance Review and Reporting. The Fund's chief compliance 
officer will: (a) Report to the Fund's Board, no less frequently than 
once every three months or at the next regularly scheduled quarterly 
Board meeting, whether (i) the Fund and its Adviser have complied with 
the conditions of the order, and (ii) a material compliance matter (as 
defined in rule 38a-1(e)(2) under the Act) has occurred with respect to 
such conditions; and (b) review the adequacy of the policies and 
procedures adopted by the Board no less frequently than annually.
    2. Disclosures to Fund Shareholders.
    (a) Each 19(a) Notice disseminated to the holders of the Fund's 
common shares, in addition to the information required by section19(a) 
and rule 19a-1:
    (i) Will provide, in a tabular or graphical format:
    (1) 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

[[Page 54356]]

long-term capital gains; and (D) return of capital or other capital 
source;
    (2) 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;
    (3) 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 
ended immediately 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 (4) 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
    (ii) Will include the following disclosure:
    (1) ``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 Distribution Policy'';
    (2) ``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\ The disclosure in condition 2(a)(ii)(2) 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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    (3) ``The amounts and sources of distributions reported in this 
19(a) 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 19(a) 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:
    (i) Describe the terms of the Distribution Policy (including the 
fixed amount or fixed percentage of the distributions and the frequency 
of the distributions);
    (ii) include the disclosure required by condition 2(a)(ii)(1) 
above;
    (iii) state, if applicable, that the Distribution Policy provides 
that the Board of the Fund may amend or terminate the Distribution 
Policy at any time without prior notice to Fund shareholders; and
    (iv) describe any reasonably foreseeable circumstances that might 
cause the Fund to terminate the Distribution Policy and any reasonably 
foreseeable consequences of such termination.
    (c) Each report provided to shareholders of a Fund under rule 30e-1 
under the Act 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.
    3. Disclosure to Shareholders, Prospective Shareholders and Third 
Parties.
    (a) The Fund will include the information contained in the relevant 
19(a) Notice, including the disclosure required by condition 2(a)(ii) 
above, in any written communication (other than a communication on Form 
1099) about the Distribution Policy or distributions under the 
Distribution Policy 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 
19(a) Notice, a press release containing the information in the 19(a) 
Notice and will file with the Commission the information contained in 
such 19(a) Notice, including the disclosure required by condition 
2(a)(ii) above, as an exhibit to its next filed Form N-CSR; and
    (c) The Fund will post prominently a statement on its (or the 
Adviser's) Web site containing the information in each 19(a) Notice, 
including the disclosure required by condition 2(a)(ii) above, and will 
maintain such information on such Web site for at least 24 months.
    4. Delivery of 19(a) Notices to Beneficial Owners. If a broker, 
dealer, bank or other person (``financial intermediary'') holds common 
shares 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 19(a) Notice to all beneficial 
owners of the Fund's shares held through such financial intermediary; 
(b) will provide, in a timely manner, to the financial intermediary, or 
its agent, enough copies of the 19(a) 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 
19(a) Notice to each beneficial owner of the Fund's shares; and (c) 
upon the request of any financial intermediary, or its agent, that 
receives copies of the 19(a) Notice, will pay the financial 
intermediary, or its agent, the reasonable expenses of sending the 
19(a) Notice to such beneficial owners.
    5. Additional Board Determinations for Funds Whose Common Shares 
Trades at a Premium.
    If:
    (a) The Fund's common shares have traded on the stock exchange that 
they primarily trade 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 shares 
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:
    (i) At the earlier of the next regularly scheduled meeting or 
within four months of the last day of such 12-week

[[Page 54357]]

rolling period, the Board, including a majority of the Independent 
Directors:
    (1) Will request and evaluate, and the Adviser will furnish, such 
information as may be reasonably necessary to make an informed 
determination of whether the Distribution Policy should be continued or 
continued after amendment;
    (2) will determine whether continuation, or continuation after 
amendment, of the Distribution Policy is consistent with the Fund's 
investment objective(s) and policies and is in the best interests of 
the Fund and its shareholders, after considering the information in 
condition 5(b)(i)(1) above; including, without limitation:
    (A) Whether the Distribution Policy is accomplishing its 
purpose(s);
    (B) the reasonably foreseeable material effects of the Distribution 
Policy on the Fund's long-term total return in relation to the market 
price and NAV of the Fund's common shares; and
    (C) the Fund's current distribution rate, as described in condition 
5(b) above, compared with the Fund's average annual taxable income or 
total return over the two-year period, as described in condition 5(b), 
or such longer period as the Board deems appropriate; and
    (3) based upon that determination, will approve or disapprove the 
continuation, or continuation after amendment, of the Distribution 
Policy; and
    (ii) The Board will record the information considered by it, 
including its consideration of the factors listed in condition 
5(b)(i)(2) above, and the basis for its approval or disapproval of the 
continuation, or continuation after amendment, of the Distribution 
Policy 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.
    6. Public Offerings. The Fund will not make a public offering of 
its common shares other than:
    (a) A rights offering below NAV to holders of the Fund's common 
shares;
    (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 6(a) 
and 6(b) above, provided that, with respect to such other offering:
    (i) 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 record date,\5\ expressed as a percentage of NAV 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; \6\ and
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    \5\ If the Fund has been in operation fewer than six months, the 
measured period will begin immediately following the Fund's first 
public offering.
    \6\ 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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    (ii) 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 shares as frequently as twelve times each year, and as 
frequently as distributions are specified by or determined in 
accordance with the terms of any outstanding preferred shares as such 
Fund may issue.
    7. Amendments to Rule 19b-1.
    The requested order 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 shares as 
frequently as twelve times each year.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-22602 Filed 9-8-15; 8:45 am]
 BILLING CODE 8011-01-P