Document ID: SEC-2010-1787-0001
Agency: sec
Document Type: Notice
Title: Applications: SSgA Funds Management, Inc., et al.
Posted Date: 2010-11-24T05:00Z

[Federal Register: November 24, 2010 (Volume 75, Number 226)]
[Notices]               
[Page 71753-71760]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24no10-135]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29499; 812-13487]

 
SSgA Funds Management, Inc., et al.; Notice of Application

November 17, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (``Act'') for an exemption from sections 
2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the 
Act, under sections 6(c) and 17(b) of the Act for an exemption from 
sections 17(a)(1) and (a)(2) of the Act, and under section 12(d)(1)(J) 
of the Act for an exemption from sections 12(d)(1)(A) and (B) of the 
Act.

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Applicants:  SSgA Funds Management, Inc. (the ``Adviser''), State 
Street Global Markets, LLC (the ``Distributor''), SPDR Series Trust and 
SPDR Index Shares Funds (each a ``Trust'' and together the ``Trusts'').

Summary of Application:  Applicants request an order that permits: (a) 
Series of certain open-end management investment companies to issue 
shares (``Shares'') redeemable in large aggregations only (``Creation 
Units''); (b) secondary market transactions in Shares to occur at 
negotiated market prices; (c) certain series to pay redemption 
proceeds, under certain circumstances, more than seven days from the 
tender of Shares for redemption; (d) certain affiliated persons of the 
series to deposit securities into, and receive securities from, the 
series in connection with the purchase and redemption of Creation 
Units; (e) certain registered management investment companies and unit 
investment trusts outside of the same group of investment companies as 
the series to acquire Shares; and (f) certain series to perform 
creations and redemptions of Shares in-kind in a master-feeder 
structure.

Filing Dates:  The application was filed on January 31, 2008, and 
amended on May 21, 2008, December 2, 2008, September 3, 2009, July 16, 
2010, and November 17, 2010.

Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on December 10, 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, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants, State Street 
Financial Center, One Lincoln Street, Boston, MA 02111.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879 or Mary Kay Frech, Branch Chief, at (202) 
551-6821 (Division of Investment Management, Office of Investment 
Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.
    Applicants' Representations:
    1. Each Trust is a business trust organized under the laws of the 
Commonwealth of Massachusetts and registered under the Act as an open-
end management investment company. Each Trust is organized as a series 
fund with multiple series.
    2. The Adviser, a Massachusetts corporation, is registered as an 
investment adviser under the Investment Advisers Act of 1940 (the 
``Advisers Act'') and will be the investment adviser to the Funds. The 
Adviser may retain sub-advisers (``Sub-Advisers''). Any Sub-Adviser 
will be registered under the Advisers Act. The Distributor, a broker-
dealer registered under the Securities Exchange Act of 1934 (the 
``Exchange Act''), will serve as the principal underwriter and 
distributor of each of the Funds.
    3. Applicants are requesting relief to permit the Trusts to create 
and operate certain actively managed investment portfolios of the 
Trusts (``New Funds'') that offer Shares with limited redeemability 
(``ETF Relief'') and to operate in a master-feeder structure. 
Applicants request that the ETF Relief apply to future series of the 
Trusts or of other open-end management companies that (a) Utilize 
active management investment strategies, (b) are advised by the Adviser 
or an entity controlling, controlled by, or under common control with 
the Adviser, and (c) comply with the terms and condition of the order 
(``Future Funds''). The New Funds and Future Funds together are the 
``Funds.'' Each Fund will operate as an exchanged-traded fund 
(``ETF'').\1\
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    \1\ All entities that currently intend to rely on the order are 
named as applicants. Any other entity that relies on the order in 
the future will comply with the terms and conditions of the 
application. A Purchasing Fund (as defined below) may rely on the 
requested order only to invest in the Funds and not in any other 
registered investment company.

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[[Page 71754]]

    4. Applicants also request that the order permit certain investment 
companies registered under the Act to acquire Shares of Funds beyond 
the limitations in section 12(d)(1)(A) and permit certain Funds, and 
any principal underwriter for the Funds, and any broker or dealer 
registered under the Exchange Act (``Brokers'') to sell Shares beyond 
the limitations in section 12(d)(1)(B) (``Fund of Funds Relief''). 
Applicants request that any exemption under section 12(d)(1)(J) from 
sections 12(d)(1)(A) and (B) for Fund of Funds Relief apply to: (i) Any 
registered investment company or unit investment trust that is 
currently or subsequently part of the same ``group of investment 
companies'' as the Funds within the meaning of section 12(d)(1)(G)(ii) 
of the Act as well as any principal underwriter for the Funds and any 
Brokers selling Shares of a Fund to a Purchasing Fund (as defined 
below); and (ii) each management investment company or unit investment 
trust registered under the Act that is not part of the same ``group of 
investment companies'' as the Funds within the meaning of section 
12(d)(1)(G)(ii) of the Act and that enters into a FOF Participation 
Agreement (as defined below) with a Fund (such management investment 
companies are referred to as ``Purchasing Management Companies,'' such 
unit investment trusts are referred to as ``Purchasing Trusts,'' and 
Purchasing Management Companies and Purchasing Trusts are collectively 
referred to as ``Purchasing Funds''). Purchasing Funds do not include 
the Funds. This relief would not apply to any Fund that is, either 
directly or through a master-feeder structure, acquiring securities of 
any investment company or company relying on section 3(c)(1) or 3(c)(7) 
of the Act in excess of the limits in section 12(d)(1)(A) of the 
Act.\2\
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    \2\ Applicants expect that the New Funds may rely on section 
12(d)(1)(F) or (G) of the Act and, thus, would not be able to rely 
on the Fund of Funds Relief. Nonetheless, it is anticipated that 
certain Future Funds would rely on the requested Fund of Funds 
Relief.
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    5. Applicants further request that the order permit the Funds to 
acquire shares of other registered investment companies managed by the 
Adviser having substantially the same investment objectives as the Fund 
(``Master Funds'') beyond the limitation in section 12(d)(1)(A) and 
permit the Master Funds, and any principal underwriter for the Master 
Fund, to sell shares of the Master Funds to the Funds beyond the 
limitations in section 12(d)(1)(B) (``Master-Feeder Relief'').
    6. Each New Fund will attempt to achieve a specified investment 
objective utilizing an active management strategy, rather than 
attempting to replicate the performance of an index. It is currently 
anticipated that the investment strategies of the New Funds will be 
similar to existing ``target date'' mutual funds, and the New Funds 
will seek to achieve their investment objectives by investing in ETFs 
and other exchange traded products that are not registered under the 
Act, which may or may not be sponsored or advised by the Adviser or one 
of its affiliates (``Underlying ETPs''). The New Funds may invest in 
Underlying ETPs either directly or through investment in a Master 
Fund.\3\ Each Fund, or its respective Master Fund, may invest in 
foreign and domestic equity securities, including depositary receipts 
(``Depositary Receipts'') and shares of other investment companies, and 
in foreign and domestic fixed income securities, including TBA 
transactions, as described herein. Neither the New Funds nor any Future 
Fund (or its respective Master Fund, if any) will invest in options 
contracts, futures contracts or swap agreements.
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    \3\ Each Underlying ETP will trade on a Stock Exchange (as 
defined below) and will calculate its net asset value per share 
(``NAV'') each day.
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    7. It is currently anticipated that each New Fund will invest in a 
Master Fund with a portfolio of Underlying ETPs instead of directly 
holding Underlying ETP shares. Applicants have designed this master-
feeder structure because it is anticipated that, in addition to the New 
Funds, other feeder funds will be created in the future and hold shares 
of each respective Master Fund. Such other feeder funds could be 
traditional mutual funds, the shares of which would be individually 
redeemable, other exchange-traded funds, or other pooled investment 
vehicles. Any traditional mutual fund feeder funds would also be series 
of a separate and distinct registered investment company.\4\
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    \4\ There would be no ability to exchange Shares of the New 
Funds for shares of any other feeder fund.
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    8. The Future Funds may invest, either directly or through a Master 
Fund, in equity securities (``Equity Funds'') or fixed income 
securities (``Fixed Income Funds'') traded in the U.S. or non-U.S. 
markets. Funds that invest, either directly or through a Master Fund, 
in foreign equity and/or fixed income securities are ``Foreign Funds.'' 
Funds that invest, either directly or through a Master Fund, in foreign 
and domestic equity securities are ``Global Equity Funds.'' Funds that 
invest in foreign and domestic fixed income securities, either directly 
or through a Master Fund, are ``Global Fixed Income Funds'' (and 
together with the ``Global Equity Funds, ``Global Funds''). The term 
``Domestic Funds'' includes any Equity Fund or Fixed Income Fund that 
invests, either directly or through a Master Fund, in domestic equity 
and/or fixed income securities.
    9. Applicants anticipate that many, if not all of the Foreign Funds 
will invest a significant portion of their assets in Depositary 
Receipts representing foreign securities in which they seek to invest, 
including American Depositary Receipts (``ADRs'') and Global Depositary 
Receipts (``GDRs''). Depositary Receipts are typically issued by a 
financial institution (``Depository'') and evidence ownership interests 
in a security or a pool or securities (``Underlying Securities'') that 
have been deposited with the Depository.\5\ A Fund will not invest in 
any Depositary Receipts that the Adviser or Sub-Adviser deems to be 
illiquid or for which pricing information is not readily available.
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    \5\ With respect to ADRs, the Depository is typically a U.S. 
financial institution and the Underlying Securities are issued by a 
foreign issuer. The ADR is registered under the Securities Act of 
1933 (``Securities Act'') on Form F-6. ADR trades occur either on a 
Stock Exchange (as defined below) or off-exchange. FINRA Rule 6620 
requires all off-exchange transactions in ADRs to be reported within 
90 seconds and ADR trade reports to be disseminated on a real-time 
basis. With respect to GDRs, the Depository may be a foreign or a 
U.S. entity, and the Underlying Securities may have a foreign or a 
U.S. issuer. All GDRs are sponsored and trade on a foreign exchange. 
No affiliated persons of applicants or any Sub-Adviser will serve as 
the depositary bank for any Depositary Receipts held by a Fund.
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    10. Shares of each Fund will be purchased from the Trusts only in 
Creation Units. Creation Units will be separable upon issue into 
individual Shares, which will be listed and traded at negotiated prices 
on a national securities exchange as defined in section 2(a)(26) of the 
Act (``Stock Exchange''). The Funds will issue Shares in Creation Units 
of at least 50,000 Shares. Orders to purchase Creation Units may be 
placed by or through an ``Authorized Participant,'' which is either (i) 
a broker-dealer or other participant in the continuous net settlement 
system of the National Securities Clearing Corporation, a clearing 
agency registered with the Commission, or (ii) a participant in the 
Depository Trust Company (``DTC''), which in either case has executed 
an agreement with the Trust and the Distributor with respect to 
creations and

[[Page 71755]]

redemptions of Creation Units (``Participant Agreement''). Shares of 
each New Fund will be purchased in Creation Units in exchange for an 
in-kind deposit by the purchaser of a particular portfolio of 
securities (``Deposit Securities'') designated by the Adviser, together 
with the deposit of a specified cash payment (``Cash Component,'' 
collectively with the Deposit Securities, ``Fund Deposit''). The Cash 
Component is an amount equal to the difference between the NAV of a 
Creation Unit and the total aggregate market value per Creation Unit of 
the Deposit Securities.\6\ A Fund may also permit, under certain 
circumstances, an in-kind purchaser to substitute cash in lieu of 
depositing some or all of the Deposit Securities.
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    \6\ On each day that a Fund is open, including as required by 
section 22(e) of the Act (``Business Day''), the Adviser will make 
available prior to the opening of trading on the Stock Exchange a 
list of the names and the required number of shares of each Deposit 
Security to be included in the Fund Deposit for each Fund, along 
with the prior day's Cash Component. The Stock Exchange will 
disseminate, every 15 seconds during its regular trading hours, 
through the facilities of the Consolidated Tape Association, the 
estimated NAV of the Funds, which is an amount per Share 
representing the sum of the estimated Cash Component effective 
through and including the previous Business Day, plus the current 
value of the Deposit Securities, on a per Share basis.
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    11. Each Fund may impose a purchase or redemption transaction fee 
(``Transaction Fee'') to protect existing shareholders from the 
dilutive costs associated with the purchase or redemption of Creation 
Units.\7\ The Distributor will deliver a confirmation and prospectus 
(``Prospectus'') to the purchaser.
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    \7\ Where a Fund permits a purchaser to substitute cash in lieu 
of depositing a portion of the requisite Deposit Securities, the 
purchaser may be assessed a higher Transaction Fee to offset the 
cost to the Fund of purchasing such Deposit Securities.
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    12. Purchasers of Shares in Creation Units may hold such Shares or 
may sell such Shares into the secondary market. Shares will be listed 
on the Stock Exchange and traded in the secondary market in the same 
manner as other equity securities. One or more Market Makers (as 
defined below) will be assigned to make continuous markets in Shares. 
The price of Shares trading on a Stock Exchange will be based on a 
current bid/offer market. Transactions involving the sale of Shares on 
a Stock Exchange will be subject to customary brokerage commissions and 
charges.
    13. Applicants expect that purchasers of Creation Units will 
include arbitrageurs and the lead market makers (``LMMs'') and/or 
designated liquidity providers (together with LMMs, ``Market Makers''). 
Applicants expect that secondary market purchasers of Shares will 
include both institutional and retail investors.\8\ Applicants state 
that arbitrage opportunities created by the ability to continually 
purchase or redeem Creation Units at their NAV should ensure that the 
Shares will not trade at a material discount or premium in relation to 
their NAV.
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    \8\ Shares will be registered in book-entry form only. DTC or 
its nominee will be the registered owner of all outstanding Shares. 
Beneficial ownership of Shares will be shown on the records of DTC 
or DTC participants (``DTC Participants'').
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    14. Beneficial owners of Shares may sell their Shares in the 
secondary market, but must accumulate enough Shares to constitute a 
Creation Unit in order to redeem through a Fund. Creation Units will be 
redeemed in exchange for a portfolio of securities (``Redemption 
Securities'') and specified cash amount \9\ as published in the 
redemption basket. While Shares generally will be redeemed in Creation 
Units in exchange for Redemption Securities, each Fund will have the 
right to make redemption payments in cash, in kind or a combination of 
each, provided the value of its redemption payments equals the NAV.\10\ 
To the extent that the Redemption Securities have a value greater than 
the NAV of the Shares being redeemed, a cash payment equal to the 
differential will be paid by the redeeming shareholder to the Trust. 
Redemption of Shares in Creation Units will be subject to a Transaction 
Fee.
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    \9\ In the case of a Fund that is part of a master-feeder 
structure, the Fund will redeem shares from the appropriate master 
portfolio and then deliver to the redeeming shareholder a portfolio 
of Redemption Securities and specified cash amount as published in 
the redemption basket.
    \10\ The Funds may substitute a cash-in-lieu amount to replace 
any Deposit Security or Redemption Security that is a to-be-
announced transaction (``TBA Transaction''). A TBA Transaction is a 
method of trading mortgage-backed securities. In a TBA Transaction, 
the buyer and seller agree upon general trade parameters such as 
agency, settlement date, par amount and price. The actual pools 
delivered generally are determined two days prior to the settlement 
date. The amount of substituted cash in the case of TBA Transactions 
will be equivalent to the value of the TBA Transaction listed as a 
Deposit Security or Redemption Security.
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    15. Applicants state that each Fund must comply with the federal 
securities laws in accepting Deposit Securities and satisfying 
redemptions with Redemption Securities, including that the Redemption 
Securities are sold in transactions that would be exempt from 
registration under the Securities Act.\11\ The Deposit Securities and 
Redemption Securities will consist of a pro rata basket of the 
portfolio securities held by a Fund (``Fund Securities''), except for 
certain minor differences that may exist for certain Fixed Income Funds 
because it is impossible to break up bonds beyond certain minimum sizes 
needed for transfer and settlement.
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    \11\ In accepting Deposit Securities and satisfying redemptions 
with Redemption Securities that are restricted securities eligible 
for resale pursuant to rule 144A under the Securities Act, each Fund 
will comply with the conditions of rule 144A, including in 
satisfying redemptions with such rule 144A eligible restricted 
Redemption Securities.
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    16. Neither the Trust nor any Fund will be advertised or marketed 
or otherwise held out as a traditional open-end investment company or a 
mutual fund. Instead, each Fund will be marketed as an ``actively-
managed exchange-traded fund.'' \12\ All marketing materials that 
describe the features or method of obtaining, buying or selling 
Creation Units, or Shares traded on the Stock Exchange, or refer to 
redeemability, will prominently disclose that Shares are not 
individually redeemable shares and will disclose that the owners of 
Shares may acquire those Shares from the Fund, or tender those Shares 
for redemption to the Fund in Creation Units only. The same approach 
will be followed in connection with shareholder reports and investor 
educational materials issued or circulated in connection with the 
Shares. The Funds will provide copies of its semi-annual and annual 
shareholder reports to DTC Participants for distribution to beneficial 
owners of Shares.
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    \12\ As noted above, the Funds may operate in a master-feeder 
structure. Under such circumstances, the Funds would operate, and 
would be marketed, as ETFs. The respective Master Funds would 
operate as mutual funds, but would not be publicly offered or 
marketed. Applicants do not believe the master-feeder structure 
would be confusing to investors because any additional feeder fund 
that is a traditional mutual fund or other pooled investment vehicle 
would be marketed separately. Applicants state that they will take 
steps to ensure that investors will understand the differences 
between the Funds and any feeder funds.
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    17. The Trust will maintain a Web site that will include each 
Fund's Prospectus and other information about each Fund that is updated 
on a daily basis, including the prior Business Day's NAV, closing 
market price, reported midpoint of ``bid and ask'' at the time of 
calculation of such NAV (``Bid/Ask Price''), and a calculation of the 
premium or discount of such price against such NAV. Prior to the 
opening of the Stock Exchange on each Business Day, a Trust will 
disclose on its Web site the identities and quantities of the 
securities and other assets held by each Fund, or its respective Master 
Fund,\13\

[[Page 71756]]

that will form the basis of each Fund's NAV at the end of such Business 
Day.\14\
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    \13\ For Funds that are part of a master-feeder structure, the 
Fund will disclose information about the securities and other assets 
held by the Master Fund.
    \14\ Under accounting procedures followed by the Funds, trades 
made on the prior Business Day (``T'') will be booked and reflected 
in NAV on the current Business Day (``T+1''). Accordingly, the Funds 
will be able to disclose at the beginning of the Business Day the 
portfolio that will form the basis for the NAV calculation at the 
end of the Business Day.
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    Applicants' Legal Analysis:
    1. Applicants request an order under section 6(c) of the Act for an 
exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act 
and rule 22c-1 under the Act, under sections 6(c) and 17(b) of the Act 
for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, and 
under section 12(d)(1)(J) of the Act for an exemption from sections 
12(d)(1)(A) and 12(d)(1)(B) of the Act.
    2. Section 6(c) of the Act provides that the Commission may exempt 
any person, security or transaction, or any class of persons, 
securities or transactions, from any provision of the Act, if and 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. 
Section 17(b) of the Act authorizes the Commission to exempt a proposed 
transaction from section 17(a) of the Act if evidence establishes that 
the terms of the transaction, including the consideration to be paid or 
received, are reasonable and fair and do not involve overreaching on 
the part of any person concerned, and the proposed transaction is 
consistent with the policies of the registered investment company and 
the general provisions of the Act. Section 12(d)(1)(J) of the Act 
provides that the Commission may exempt any person, security, or 
transaction, or any class or classes of persons, securities or 
transactions, from any provision of section 12(d)(1) if the exemption 
is consistent with the public interest and the protection of investors.

Sections 5(a)(1) and 2(a)(32) of the Act

    3. Section 5(a)(1) of the Act defines an ``open-end company'' as a 
management investment company that is offering for sale or has 
outstanding any redeemable security of which it is the issuer. Section 
2(a)(32) of the Act defines a redeemable security as any security, 
other than short-term paper, under the terms of which the holder, upon 
its presentation to the issuer, is entitled to receive approximately a 
proportionate share of the issuer's current net assets, or the cash 
equivalent. Because Shares will not be individually redeemable, 
applicants request an order to permit the Trust to register as an open-
end management investment company and redeem Shares in Creation Units 
only.\15\ Applicants state that investors may purchase Shares in 
Creation Units and redeem Creation Units from each Fund. Applicants 
further state that because the market price of Creation Units will be 
disciplined by arbitrage opportunities, investors should be able to 
sell Shares in the secondary market at prices that do vary 
substantially from their NAV.
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    \15\ The Master Funds will not require relief from sections 
2(a)(32) and 5(a)(1) because the Master Funds will issue 
individually redeemable securities.
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Section 22(d) of the Act and Rule 22c-1 Under the Act

    4. Section 22(d) of the Act, among other things, prohibits a dealer 
from selling a redeemable security, which is currently being offered to 
the public by or through a principal underwriter, except at a current 
public offering price described in the prospectus. Rule 22c-1 under the 
Act generally requires that a dealer selling, redeeming, or 
repurchasing a redeemable security do so only at a price based on its 
NAV. Applicants state that secondary market trading in Shares will take 
place at negotiated prices, rather than at the current offering price 
described in the Prospectus, and not at a price based on NAV. Thus, 
purchases and sales of Shares in the secondary market will not comply 
with section 22(d) of the Act and rule 22c-1 under the Act. Applicants 
request an exemption under section 6(c) from these provisions.
    5. Applicants assert that the concerns sought to be addressed by 
section 22(d) of the Act and rule 22c-1 under the Act with respect to 
pricing are equally satisfied by the proposed method of pricing Shares. 
Applicants maintain that while there is little legislative history 
regarding section 22(d), its provisions, as well as those of rule 22c-
1, appear to have been designed to (a) Prevent dilution caused by 
certain riskless-trading schemes by principal underwriters and contract 
dealers, (b) prevent unjust discrimination or preferential treatment 
among buyers resulting from sales at different prices, and (c) assure 
an orderly distribution of investment company shares by eliminating 
price competition from Brokers offering shares at less than the 
published sales price and repurchasing shares at more than the 
published redemption price.
    6. Applicants believe that none of these purposes will be thwarted 
by permitting Shares to trade in the secondary market at negotiated 
prices. Applicants state that (a) secondary market trading in Shares 
would not cause dilution of an investment in Shares because such 
transactions do not involve the Funds as parties, and (b) to the extent 
different prices exist during a given trading day, or from day to day, 
such variances occur as a result of third-party market forces, such as 
supply and demand. Therefore, applicants assert that secondary market 
transactions in Shares will not lead to discrimination or preferential 
treatment among purchasers. Finally, applicants contend that the 
proposed distribution system will be orderly because arbitrage activity 
should ensure that the difference between NAV and the market price of 
Shares remains low.

Section 22(e)

    7. Section 22(e) of the Act generally prohibits a registered 
investment company from suspending the right of redemption or 
postponing the date of payment of redemption proceeds for more than 
seven days after the tender of a security for redemption. Applicants 
observe that the settlement of redemptions of Creation Units of the 
Foreign Funds is contingent not only on the settlement cycle of the 
U.S. securities markets but also on the delivery cycles present in 
foreign markets in which Foreign Funds, or their respective Master 
Funds, may invest. Applicants have been advised that, under certain 
circumstances, the delivery cycles for transferring Redemption 
Securities to redeeming investors, coupled with local market holiday 
schedules, will require a delivery process of up to 14 calendar days. 
Applicants therefore request relief from section 22(e) in order to 
provide payment or satisfaction of redemptions within the maximum 
number of calendar days required for such payment or satisfaction in 
the principal local markets where transactions in the Fund Securities 
of each Foreign Fund, and any respective Master Fund, customarily clear 
and settle, but in all cases no later than 14 days following the tender 
of a Creation Unit.\16\
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    \16\ Applicants acknowledge that no relief obtained from the 
requirements of section 22(e) will affect any obligations that 
applicants may otherwise have under rule 15c6-1 under the Exchange 
Act. Rule 15c6-1 requires that most securities transactions be 
settled within three business days of the trade date.
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    8. Applicants submit that Congress adopted section 22(e) to prevent 
unreasonable, undisclosed or unforeseen delays in the actual payment of 
redemption proceeds. Applicants state that allowing in-kind redemption 
payments for Creation Units of a Foreign Fund, and any respective 
Master Fund, to be made within the number of days

[[Page 71757]]

indicated above would not be inconsistent with the spirit and intent of 
section 22(e). Applicants state that each Foreign Fund's SAI will 
disclose those local holidays (over the period of at least one year 
following the date of the SAI), if any, that are expected to prevent 
the delivery of in-kind redemption proceeds in seven calendar days and 
the maximum number of days needed to deliver the proceeds for each 
affected Foreign Fund. Applicants are not seeking relief from section 
22(e) with respect to Foreign Funds effecting redemptions on a cash 
basis.
    9. If using a master-feeder structure, applicants will operate in 
substantially the same manner. In the case of an in-kind redemption 
from a Fund, the Fund would make a corresponding redemption from the 
Master Fund. Applicants do not believe the master-feeder structure 
would have any impact on the delivery cycle.

Section 12(d)(1)

    10. Section 12(d)(1)(A) of the Act prohibits a registered 
investment company from acquiring shares of an investment company if 
the securities represent more than 3% of the total outstanding voting 
stock of the acquired company, more than 5% of the total assets of the 
acquiring company, or, together with the securities of any other 
investment companies, more than 10% of the total assets of the 
acquiring company. Section 12(d)(1)(B) of the Act prohibits a 
registered open-end investment company, its principal underwriter, or 
any other broker or dealer from selling its shares to another 
investment company if the sale will cause the acquiring company to own 
more than 3% of the acquired company's voting stock, or if the sale 
will cause more than 10% of the acquired company's voting stock to be 
owned by investment companies generally.
    11. Applicants request relief to permit Purchasing Management 
Companies and Purchasing Trusts registered under the Act that are not 
sponsored or advised by the Adviser or any entity controlling, 
controlled by, or under common control with the Adviser and are not 
part of the same ``group of investment companies,'' as defined in 
section 12(d)(1)(G)(ii) of the Act, as the Trusts, to acquire Shares of 
a Fund beyond the limits of section 12(d)(1)(A) of the Act. Applicants 
also seek an exemption to permit the Funds and/or a Broker to sell 
Shares to Purchasing Funds beyond the limits of section 12(d)(1)(B). 
Pursuant to the terms and conditions of the requested order, each 
Purchasing Fund will enter into a FOF Participation Agreement (as 
defined below) with the relevant Fund.
    12. Each Purchasing Management Company will be advised by an 
investment adviser within the meaning of section 2(a)(20)(A) of the Act 
(``Purchasing Fund Adviser'') and may be sub-advised by investment 
adviser(s) within the meaning of section 2(a)(20)(B) of the Act 
(``Purchasing Fund Sub-Adviser''). Any investment adviser to a 
Purchasing Management Company will be registered as an investment 
adviser or exempt from registration under the Advisers Act. Each 
Purchasing Trust will have a sponsor (``Sponsor'').
    13. Applicants assert that the proposed transactions will not lead 
to any of the abuses that section 12(d)(1) was designed to prevent. 
Applicants submit that the proposed conditions to the requested relief 
address the concerns underlying the limits in section 12(d)(1), which 
include concerns about undue influence, excessive layering of fees and 
overly complex structures.
    14. Applicants submit that their proposed conditions address any 
concerns regarding the potential for undue influence. A Purchasing Fund 
or Purchasing Fund Affiliate \17\ will not cause an investment in a 
Fund to influence the terms of services or transactions between a 
Purchasing Fund or a Purchasing Fund Affiliate and the Fund or Fund 
Affiliate.\18\ A Purchasing Fund's Advisory Group or a Purchasing 
Fund's Sub-Advisory Group will not control a Fund within the meaning of 
section 2(a)(9) of the Act. A ``Purchasing Fund's Advisory Group'' is 
the Purchasing Fund Adviser, or Sponsor, any person controlling, 
controlled by or under common control with the Purchasing Fund Adviser 
or Sponsor, and any investment company or issuer that would be an 
investment company but for section 3(c)(1) or 3(c)(7) of the Act, that 
is advised or sponsored by the Purchasing Fund Adviser, the Sponsor, or 
any person controlling, controlled by or under common control with the 
Purchasing Fund Adviser or Sponsor. A ``Purchasing Fund's Sub-Advisory 
Group'' is any Purchasing Fund Sub-Adviser, any person controlling, 
controlled by, or under common control with the Purchasing Fund Sub-
Adviser, and any investment company or issuer that would be an 
investment company but for section 3(c)(1) or 3(c)(7) of the Act (or 
portion of such investment company or issuer) advised or sponsored by 
the Purchasing Fund Sub-Adviser or any person controlling, controlled 
by or under common control with the Purchasing Fund Sub-Adviser.
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    \17\ A ``Purchasing Fund Affiliate'' is defined as the 
Purchasing Fund Adviser, Purchasing Fund Sub-Adviser, Sponsor, 
promoter and principal underwriter of a Purchasing Fund and any 
person controlling, controlled by or under common control with any 
of these entities.
    \18\ A ``Fund Affiliate'' is defined as an investment adviser, 
promoter or principal underwriter of a Fund, or its respective 
Master Fund, and any person controlling, controlled by or under 
common control with any of these entities.
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    15. Applicants also propose a condition to ensure that no 
Purchasing Fund or Purchasing Fund Affiliate will cause a Fund to 
purchase a security from an Affiliated Underwriting. An ``Affiliated 
Underwriting'' is an offering of securities during the existence of an 
underwriting or selling syndicate of which a principal underwriter is 
an Underwriting Affiliate. An ``Underwriting Affiliate'' is a principal 
underwriter in any underwriting or selling syndicate that is an 
officer, director, member of an advisory board, Purchasing Fund 
Adviser, Purchasing Fund Sub-Adviser, employee or Sponsor of the 
Purchasing Fund, or a person of which any such officer, director, 
member of an advisory board, Purchasing Fund Adviser, Purchasing Fund 
Sub-Adviser, employee or Sponsor is an affiliated person, except any 
person whose relationship to the Fund is covered by section 10(f) of 
the Act is not an Underwriting Affiliate.
    16. Applicants propose several conditions to address the potential 
for layering of fees. Applicants note that the board of directors or 
trustees of a Purchasing Management Company, including a majority of 
the directors or trustees who are not ``interested persons'' within the 
meaning of section 2(a)(19) of the Act (``disinterested directors or 
trustees''), will be required to find that the advisory fees charged 
under the contract are based on services provided that will be in 
addition to, rather than duplicative of, services provided under the 
advisory contract of any Fund in which the Purchasing Management 
Company may invest. Applicants state that any sales charges and/or 
service fees charged with respect to shares of a Purchasing Fund will 
not exceed the limits applicable to a fund of funds set forth in NASD 
Conduct Rule 2830.\19\
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    \19\ Any references to NASD Conduct Rule 2830 include any 
successor or replacement rule that may be adopted by the Financial 
Industry Regulatory Authority.
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    17. Applicants submit that the proposed arrangement will not create 
an overly complex fund structure. Applicants note that a Fund (and its 
respective Master Fund) will be prohibited from acquiring securities of

[[Page 71758]]

any investment company or company relying on section 3(c)(1) or 3(c)(7) 
of the Act in excess of the limits contained in section 12(d)(1)(A) of 
the Act, except to the extent that (i) the Fund (or its respective 
Master Fund) acquires securities of another investment company pursuant 
to certain exemptive relief from the Commission, or (ii) the Fund 
acquires shares of its respective Master Fund.
    18. To ensure that a Purchasing Fund is aware of the terms and 
conditions of the requested order, the Purchasing Fund must enter into 
an agreement with the respective Fund (``FOF Participation 
Agreement''). The FOF Participation Agreement will include an 
acknowledgment from the Purchasing Fund that it may rely on the order 
only to invest in the Funds (or other series of the Trusts) and not in 
any other investment company.
    19. Applicants also are seeking relief from sections 12(d)(1)(A) 
and (B) of the Act to permit the Funds to perform creations and 
redemptions of Shares in-kind in a master-feeder structure. Applicants 
assert that this structure is substantially identical to traditional 
master-feeder structures permitted pursuant to the exception provided 
in section 12(d)(1)(E) of the Act. Section 12(d)(1)(E) provides that 
the percentage limitations of sections 12(d)(1)(A) and (B) will not 
apply to a security issued by an investment company (in this case, the 
shares of the applicable master portfolio) if, among other things, that 
security is the only investment security held by the Fund. Applicants 
believe the proposed master-feeder structure complies with section 
12(d)(1)(E) because each Fund will hold only investment securities 
issued by its corresponding Master Fund; however, the Funds may receive 
securities other than securities of its corresponding Master Fund if a 
Fund accepts an in-kind creation. To the extent that a Fund may be 
deemed to be holding both shares of the master portfolio and other 
securities, applicants request relief from sections 12(d)(1)(A) and 
(B). The Funds would operate in compliance with all other provisions of 
section 12(d)(1)(E).

Sections 17(a)(1) and (2) of the Act

    20. Sections 17(a)(1) and (2) of the Act generally prohibit an 
affiliated person of a registered investment company, or an affiliated 
person of such a person (``second tier affiliate''), from selling any 
security to or purchasing any security from the company. Section 
2(a)(3) of the Act defines ``affiliated person'' to include any person 
directly or indirectly owning, controlling, or holding with power to 
vote 5% or more of the outstanding voting securities of the other 
person and any person directly or indirectly controlling, controlled 
by, or under common control with, the other person. Section 2(a)(9) of 
the Act provides that a control relationship will be presumed where one 
person owns more than 25% of another person's voting securities. The 
Funds may be deemed to be controlled by the Adviser or an entity 
controlling, controlled by or under common control with the Adviser and 
hence affiliated persons of each other. In addition, the Funds may be 
deemed to be under common control with any other registered investment 
company (or series thereof) advised by the Adviser or an entity 
controlling, controlled by or under common control with the Adviser (an 
``Affiliated Fund'').
    21. Applicants request an exemption from section 17(a) under 
sections 6(c) and 17(b) to permit in-kind purchases and redemptions by 
persons that are affiliated persons or second tier affiliates of the 
Funds solely by virtue of one or more of the following: (i) Holding 5% 
or more, or more than 25%, of the Shares of the Trust or one or more 
Funds; (ii) an affiliation with a person with an ownership interest 
described in (i); or (iii) holding 5% or more, or more than 25%, of the 
shares of one or more Affiliated Funds. Applicants also request an 
exemption in order to permit each Fund to sell Shares to and redeem 
Shares from, and engage in the in-kind transactions that would 
accompany such sales and redemptions with, any Purchasing Fund of which 
the Fund is an affiliated person or a second tier affiliate.\20\
---------------------------------------------------------------------------

    \20\ Applicants state that although they believe that a 
Purchasing Fund generally will purchase Shares in the secondary 
market, a Purchasing Fund might seek to transact in Creation Units 
directly with a Fund.
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    22. Applicants contend that no useful purpose would be served by 
prohibiting the affiliated persons described above from making in-kind 
purchases or in-kind redemptions of Shares of a Fund in Creation Units. 
The value of a Fund Deposit made by a purchaser or Redemption 
Securities and corresponding Cash Component given to a redeeming 
investor will be the same regardless of the investor's identity, and 
will be valued under the same objective standards applied to valuing 
the Fund Securities. The method of valuing Fund Securities held by a 
Fund is the same as that used for calculating in-kind purchase or 
redemption values. Therefore, applicants state that the in-kind 
purchases and redemptions will afford no opportunity for the specified 
affiliated persons of a Fund to effect a transaction detrimental to 
other holders of Shares. Applicants do not believe that in-kind 
purchases and redemptions will result in abusive self-dealing or 
overreaching of the Fund.
    23. Applicants also submit that the sale of Shares to and 
redemption of Shares from a Purchasing Fund satisfies the standards for 
relief under sections 17(b) and 6(c) of the Act. Any consideration paid 
for the purchase or redemption of Shares directly from a Fund will be 
based on the NAV of the Fund.\21\ The FOF Participation Agreement will 
require any Purchasing Fund that purchases Shares directly from a Fund 
to represent that its purchases are permitted under its investment 
restrictions and consistent with the investment policies described in 
its registration statement.
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    \21\ Applicants acknowledge that the receipt of compensation by 
(a) an affiliated person of a Purchasing Fund, or an affiliated 
person of such person, for the purchase by the Purchasing Fund of 
Shares or (b) an affiliated person of a Fund, or an affiliated 
person of such person, for the sale by the Fund of its Shares to a 
Purchasing Fund, may be prohibited by section 17(e)(1) of the Act. 
The FOF Participation Agreement also will include this 
acknowledgment.
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    24. To the extent that a Fund operates in a master-feeder 
structure, applicants also request relief permitting the Funds to 
engage in in-kind creations and redemptions with the applicable master 
portfolio. Applicants state that the customary section 17(a)(1) and 
17(a)(2) relief would not be sufficient to permit such transactions 
because the Funds and the applicable master portfolio could also be 
affiliated by virtue of having the same investment adviser. However, 
applicants believe that in-kind creations and redemptions between a 
Fund and a master portfolio advised by the same investment adviser do 
not involve ``overreaching'' by an affiliated person. Such transactions 
will occur only at the Fund's proportionate share of the master 
portfolio's net assets, and the distributed securities will be valued 
in the same manner as they are valued for the purposes of calculating 
the applicable master portfolio's NAV. Further, all such transactions 
will be effected with respect to pre-determined securities and on the 
same terms with respect to all investors. Finally, such transactions 
would only occur as a result of, and to effectuate, a creation or 
redemption transaction between the Fund and a third-party investor. 
Applicants believe that the terms of the proposed transactions are 
reasonable and fair and do not involve overreaching on the part of any 
person concerned and that the transactions are consistent with the 
general purposes of the Act.
    Applicants' Conditions:

[[Page 71759]]

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

ETF Relief

    1. As long as the Funds operate in reliance on the requested order, 
the Shares of the Funds will be listed on a Stock Exchange.
    2. Neither the Trust nor any Fund will be advertised or marketed as 
an open-end investment company or a mutual fund. Any advertising 
material that describes the purchase or sale of Creation Units or 
refers to redeemability will prominently disclose that the Shares are 
not individually redeemable and that owners of the Shares may acquire 
those Shares from the Fund and tender those Shares for redemption to 
the Fund in Creation Units only.
    3. The Web site for the Funds, which is and will be publicly 
accessible at no charge, will contain, on a per Share basis for each 
Fund the prior Business Day's NAV and the market closing price or Bid/
Ask Price of the Shares, and a calculation of the premium or discount 
of the market closing price or Bid/Ask Price of the Shares against such 
NAV.
    4. On each Business Day, before commencement of trading in Shares 
on the Stock Exchange, the Fund (or its respective Master Fund) will 
disclose on its Web site the identities and quantities of the Fund 
Securities and other assets held by each Fund that will form the basis 
for each Fund's calculation of NAV at the end of such Business Day.
    5. The Adviser or Sub-Adviser, directly or indirectly, will not 
cause any Authorized Participant (or any investor on whose behalf an 
Authorized Participant may transact with the Fund) to acquire any 
Deposit Security for the Fund through a transaction in which the Fund 
could not engage directly.
    6. The requested relief, other than the section 12(d)(1) relief and 
the section 17 relief related to a master-feeder structure, will expire 
on the effective date of any Commission rule under the Act that 
provides relief permitting the operation of actively-managed exchange-
traded funds.

Fund of Funds Relief

    7. The members of the Purchasing Fund's Advisory Group will not 
control (individually or in the aggregate) a Fund (or its respective 
Master Fund) within the meaning of section 2(a)(9) of the Act. The 
members of the Purchasing Fund's Sub-Advisory Group will not control 
(individually or in the aggregate) a Fund (or its respective Master 
Fund) within the meaning of section 2(a)(9) of the Act. If, as a result 
of a decrease in the outstanding voting securities of a Fund, the 
Purchasing Fund's Advisory Group or the Purchasing Fund's Sub-Advisory 
Group, each in the aggregate, becomes a holder of more than 25 percent 
of the outstanding voting securities of a Fund, it will vote its Shares 
of the Fund in the same proportion as the vote of all other holders of 
the Fund's Shares. This condition does not apply to the Purchasing 
Fund's Sub-Advisory Group with respect to a Fund (or its respective 
Master Fund) for which the Purchasing Fund Sub-Adviser or a person 
controlling, controlled by or under common control with the Purchasing 
Fund Sub-Adviser acts as the investment adviser within the meaning of 
section 2(a)(20)(A) of the Act.
    8. No Purchasing Fund or Purchasing Fund Affiliate will cause any 
existing or potential investment by the Purchasing Fund in a Fund to 
influence the terms of any services or transactions between the 
Purchasing Fund or a Purchasing Fund Affiliate and the Fund (or its 
respective Master Fund) or a Fund Affiliate.
    9. The board of directors or trustees of a Purchasing Management 
Company, including a majority of the disinterested directors or 
trustees, will adopt procedures reasonably designed to assure that the 
Purchasing Fund Adviser and any Purchasing Fund Sub-Adviser are 
conducting the investment program of the Purchasing Management Company 
without taking into account any consideration received by the 
Purchasing Management Company or a Purchasing Fund Affiliate from a 
Fund (or its respective Master Fund) or a Fund Affiliate in connection 
with any services or transactions.
    10. Once an investment by a Purchasing Fund in the securities of a 
Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, the board 
of trustees of a Fund (``Board'') (or of its respective Master Fund), 
including a majority of the disinterested Board members, will determine 
that any consideration paid by the Fund (or its respective Master Fund) 
to the Purchasing Fund or a Purchasing Fund Affiliate in connection 
with any services or transactions: (i) Is fair and reasonable in 
relation to the nature and quality of the services and benefits 
received by the Fund (or its respective Master Fund); (ii) is within 
the range of consideration that the Fund (or its respective Master 
Fund) would be required to pay to another unaffiliated entity in 
connection with the same services or transactions; and (iii) does not 
involve overreaching on the part of any person concerned. This 
condition does not apply with respect to any services or transactions 
between a Fund (or its respective Master Fund) and its investment 
adviser(s), or any person controlling, controlled by or under common 
control with such investment adviser(s).
    11. The Purchasing Fund Adviser, or trustee (``Trustee'') or 
Sponsor, as applicable, will waive fees otherwise payable to it by the 
Purchasing Fund in an amount at least equal to any compensation 
(including fees received pursuant to any plan adopted by a Fund (or its 
respective Master Fund) under rule 12b-1 under the Act) received from a 
Fund (or its respective Master Fund) by the Purchasing Fund Adviser, or 
Trustee or Sponsor, or an affiliated person of the Purchasing Fund 
Adviser, or Trustee or Sponsor, other than any advisory fees paid to 
the Purchasing Fund Adviser, or Trustee, or Sponsor, or its affiliated 
person by the Fund (or its respective Master Fund), in connection with 
the investment by the Purchasing Fund in the Fund. Any Purchasing Fund 
Sub-Adviser will waive fees otherwise payable to the Purchasing Fund 
Sub-Adviser, directly or indirectly, by the Purchasing Management 
Company in an amount at least equal to any compensation received from a 
Fund (or its respective Master Fund) by the Purchasing Fund Sub-
Adviser, or an affiliated person of the Purchasing Fund Sub-Adviser, 
other than any advisory fees paid to the Purchasing Fund Sub-Adviser or 
its affiliated person by the Fund (or its respective Master Fund), in 
connection with any investment by the Purchasing Management Company in 
the Fund made at the direction of the Purchasing Fund Sub-Adviser. In 
the event that the Purchasing Fund Sub-Adviser waives fees, the benefit 
of the waiver will be passed through to the Purchasing Management 
Company.
    12. No Purchasing Fund or Purchasing Fund Affiliate (except to the 
extent it is acting in its capacity as an investment adviser to a Fund 
(or its respective Master Fund)) will cause a Fund (or its respective 
Master Fund) to purchase a security in an Affiliated Underwriting.
    13. The Board of the Fund (or of its respective Master Fund), 
including a majority of the disinterested Board members, will adopt 
procedures reasonably designed to monitor any purchases of securities 
by the Fund (or its respective Master Fund) in an Affiliated 
Underwriting, once an investment by a Purchasing Fund in the securities 
of the Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act, 
including any purchases made directly from an Underwriting Affiliate. 
The Board will review these purchases

[[Page 71760]]

periodically, but no less frequently than annually, to determine 
whether the purchases were influenced by the investment by the 
Purchasing Fund in the Fund. The Board will consider, among other 
things: (i) Whether the purchases were consistent with the investment 
objectives and policies of the Fund (or its respective Master Fund); 
(ii) how the performance of securities purchased in an Affiliated 
Underwriting compares to the performance of comparable securities 
purchased during a comparable period of time in underwritings other 
than Affiliated Underwritings or to a benchmark such as a comparable 
market index; and (iii) whether the amount of securities purchased by 
the Fund (or its respective Master Fund) in Affiliated Underwritings 
and the amount purchased directly from an Underwriting Affiliate have 
changed significantly from prior years. The Board will take any 
appropriate actions based on its review, including, if appropriate, the 
institution of procedures designed to assure that purchases of 
securities in Affiliated Underwritings are in the best interest of 
shareholders.
    14. Each Fund (or its respective Master Fund) will maintain and 
preserve permanently in an easily accessible place a written copy of 
the procedures described in the preceding condition, and any 
modifications to such procedures, and will maintain and preserve for a 
period of not less than six years from the end of the fiscal year in 
which any purchase in an Affiliated Underwriting occurred, the first 
two years in an easily accessible place, a written record of each 
purchase of securities in Affiliated Underwritings, once an investment 
by a Purchasing Fund in the securities of the Fund exceeds the limit of 
section 12(d)(1)(A)(i) of the Act, setting forth from whom the 
securities were acquired, the identity of the underwriting syndicate's 
members, the terms of the purchase, and the information or materials 
upon which the Board's determinations were made.
    15. Before investing in a Fund in excess of the limit in section 
12(d)(1)(A), a Purchasing Fund will execute a FOF Participation 
Agreement with the Fund stating that their respective boards of 
directors or trustees and their investment advisers, or trustee and 
Sponsor, as applicable, understand the terms and conditions of the 
order, and agree to fulfill their responsibilities under the order. At 
the time of its investment in shares of a Fund in excess of the limit 
in section 12(d)(1)(A)(i), a Purchasing Fund will notify the Fund of 
the investment. At such time, the Purchasing Fund will also transmit to 
the Fund a list of the names of each Purchasing Fund Affiliate and 
Underwriting Affiliate. The Purchasing Fund will notify the Fund of any 
changes to the list of the names as soon as reasonably practicable 
after a change occurs. The Fund and the Purchasing Fund will maintain 
and preserve a copy of the order, the FOF Participation Agreement, and 
the list with any updated information for the duration of the 
investment and for a period of not less than six years thereafter, the 
first two years in an easily accessible place.
    16. Before approving any advisory contract under section 15 of the 
Act, the board of directors or trustees of each Purchasing Management 
Company, including a majority of the disinterested directors or 
trustees, will find that the advisory fees charged under such contract 
are based on services provided that will be in addition to, rather than 
duplicative of, the services provided under the advisory contract(s) of 
any Fund (or its respective Master Fund) in which the Purchasing 
Management Company may invest. These findings and their basis will be 
recorded fully in the minute books of the appropriate Purchasing 
Management Company.
    17. Any sales charges and/or service fees charged with respect to 
shares of a Purchasing Fund will not exceed the limits applicable to a 
fund of funds as set forth in NASD Conduct Rule 2830.
    18. No Fund (or its respective Master Fund) will acquire securities 
of any investment company or company relying on section 3(c)(1) or 
3(c)(7) of the Act in excess of the limits contained in section 
12(d)(1)(A) of the Act, except to the extent that (i) the Fund (or its 
respective Master Fund) acquires securities of another investment 
company pursuant to exemptive relief from the Commission permitting the 
Fund (or its respective Master Fund) to acquire securities of one or 
more investment companies for short-term cash management purposes, or 
(ii) the Fund acquires securities of the Master Fund pursuant to the 
Master-Feeder Relief.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-29588 Filed 11-23-10; 8:45 am]
BILLING CODE 8011-01-P