Document ID: SEC-2017-1406-0001
Agency: sec
Document Type: Notice
Title: Applications: Advanced Series Trust, et al.
Posted Date: 2017-08-18T04:00Z

[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Notices]
[Pages 39475-39477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17504]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32778; File No. 812-14748]

Advanced Series Trust, et al.

August 15, 2017.

AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 12(d)(1)(J) of 

the Investment Company Act of 1940 (the ``Act'') for an exemption from 

sections 12(d)(1)(A), (B), and (C) of the Act and under sections 6(c) 

and 17(b) of the Act for an exemption from sections 17(a)(1) and (2) of 

the Act. The requested order would permit certain registered open-end 

investment companies to acquire shares of certain registered open-end 

investment companies, registered closed-end investment companies, and 

business development companies, as defined in section 2(a)(48) of the 

Act (``BDCs'') and registered unit investment trusts (collectively, 

``Underlying Funds''), that are within and outside the same group of 

investment companies as the acquiring investment companies, in

[[Page 39476]]

excess of the limits in section 12(d)(1) of the Act. The requested 

order would supersede a prior order (``Prior Order'').\1\

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    \1\ In the Matter of Prudential Investment Portfolios 3, et al., 

Investment Company Act Rel. Nos. 30200 (Sept. 11, 2012 (notice) and 

30229 (Oct. 9, 2012) (order).

Applicants: Advanced Series Trust, Prudential Investment Portfolios 3, 

Prudential Investment Portfolios 5, The Prudential Investment 

Portfolios, Inc., and The Prudential Series Fund, each a Delaware 

statutory trust, a Massachusetts business trust, or a Maryland 

corporation and registered under the Act as an open-end management 

investment company with multiple series (each, a ``Trust''); PGIM 

Investments LLC, a New York limited liability company (the ``Initial 

Adviser''), registered as an investment adviser under the Investment 

Advisers Act of 1940; and Prudential Annuities Distributors, Inc., a 

Delaware corporation (``PAD''), and Prudential Investment Management 

Services LLC, a Delaware limited liability company (``PIMS'' and 

together with ``PAD,'' the ``Distributors''), each registered as a 

broker-dealer under the Securities Exchange Act of 1934 (``Exchange 

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Act'').

Filing Dates:  The application was filed on February 23, 2017 and 

amended on June 15, 2017.

Hearing or Notification of Hearing:  An order granting the requested 

relief will be issued unless the Commission orders a hearing. 

Interested persons may request a hearing by writing to the Commission's 

Secretary and serving applicants with a copy of the request, personally 

or by mail. Hearing requests should be received by the Commission by 

5:30 p.m. on September 8, 2017 and should be accompanied by proof of 

service on the 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: 655 Broad Street, 

17th Floor, Newark, NJ 07102-4410.

FOR FURTHER INFORMATION CONTACT:  Jean E. Minarick, Senior Counsel, at 

(202) 551-6811, or Kaitlin C. Bottock, Branch Chief, at (202) 551-6821 

(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 

application. The complete application may be obtained via the 

Commission's Web site by searching for the file number, or for an 

applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Summary of the Application

    1. Applicants request an order to permit (a) a Fund \2\ (each a 

``Fund of Funds'') to acquire shares of Underlying Funds \3\ in excess 

of the limits in sections 12(d)(1)(A) and (C) of the Act and (b) the 

Underlying Funds that are registered open-end investment companies or 

series thereof, their principal underwriters and any broker or dealer 

registered under the Exchange Act to sell shares of the Underlying Fund 

to the Fund of Funds in excess of the limits in section 12(d)(1)(B) of 

the Act.\4\ Applicants also request an order of exemption under 

sections 6(c) and 17(b) of the Act from the prohibition on certain 

affiliated transactions in section 17(a) of the Act to the extent 

necessary to permit the Underlying Funds to sell their shares to, and 

redeem their shares from, the Funds of Funds.\5\ Applicants state that 

such transactions will be consistent with the policies of each Fund of 

Funds and each Underlying Fund and with the general purposes of the Act 

and will be based on the net asset values of the Underlying Funds.

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    \2\ Applicants request that the order apply to each existing and 

future series of the Trusts and to each existing and future 

registered open-end investment company or series thereof that is 

advised by the Initial Adviser or its successors or by any other 

investment adviser controlling, controlled by, or under common 

control with the Initial Adviser or its successors and is part of 

the same ``group of investment companies'' as the Trusts (each, a 

``Fund''). For purposes of the requested order, ``successor'' is 

limited to an entity that results from a reorganization into another 

jurisdiction or a change in the type of business organization. For 

purposes of the request for relief, the term ``group of investment 

companies'' means any two or more registered investment companies, 

including closed-end investment companies or BDCs, that hold 

themselves out to investors as related companies for purposes of 

investment and investor services.

    \3\ Certain of the Underlying Funds have obtained exemptions 

from the Commission necessary to permit their shares to be listed 

and traded on a national securities exchange at negotiated prices 

and, accordingly, to operate as an exchange-traded fund (``ETF'').

    \4\ Applicants do not request relief for the Funds of Funds to 

invest in reliance on the order in BDCs and registered closed-end 

investment companies that are not listed and traded on a national 

securities exchange.

    \5\ A Fund of Funds generally would purchase and sell shares of 

an Underlying Fund that operates as an ETF through secondary market 

transactions rather than through principal transactions with the 

Underlying Fund. Applicants nevertheless request relief from 

sections 17(a)(1) and (2) to permit each Fund of Funds that is an 

affiliated person, or an affiliated person of an affiliated person, 

as defined in section 2(a)(3) of the Act, of an ETF, to sell shares 

to or redeem shares from the ETF. Applicants are not seeking relief 

from Section 17(a) for, and the requested relief will not apply to, 

transactions where an ETF could be deemed an affiliated person, or 

an affiliated person of an affiliated person, of a Fund of Funds 

because an investment adviser to the ETF or an entity controlling, 

controlled by or under common control with the investment adviser to 

the ETF is also an investment adviser to the Fund of Funds. A Fund 

of Funds will purchase and sell shares of an Underlying Fund that is 

a closed-end fund or BDC through secondary market transactions at 

market prices rather than through principal transactions with the 

closed-end fund or BDC. Accordingly, applicants are not requesting 

section 17(a) relief with respect to transactions in shares of 

closed-end funds (including BDCs).

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    2. Certain Underlying Funds may invest up to 25% of their assets in 

a wholly-owned and controlled subsidiary of the Underlying Fund 

organized under the laws of the Cayman Islands as an exempted company 

or under the laws of another non-U.S. jurisdiction (each, a ``Cayman 

Sub''), in order to invest in commodity-related instruments and certain 

other instruments. Applicants state that these Cayman Subs are created 

for tax purposes in order to ensure that the Underlying Fund would 

remain qualified as a regulated investment company for U.S. Federal 

income tax purposes.

    3. Applicants agree that any order granting the requested relief 

will be subject to the terms and conditions stated in the application. 

Such terms and conditions are designed to, among other things, help 

prevent any potential (i) undue influence over an Underlying Fund that 

is not in the same ``group of investment companies'' as the Fund of 

Funds through control or voting power, or in connection with certain 

services, transactions, and underwritings, (ii) excessive layering of 

fees, and (iii) overly complex fund structures, which are the concerns 

underlying the limits in sections 12(d)(1)(A), (B), and (C) of the Act.

    4. 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. Section 17(b) of the Act authorizes the 

Commission to grant an order permitting a transaction otherwise 

prohibited by section 17(a) if it finds that (a) the terms of the 

proposed transaction are fair and reasonable and do not involve 

overreaching on the part of any person concerned; (b) the proposed 

transaction is consistent with the policies of each registered

[[Page 39477]]

investment company involved; and (c) the proposed transaction is 

consistent with the general purposes of the Act. Section 6(c) of the 

Act permits the Commission to exempt any persons or transactions from 

any provision of the Act if such exemption is necessary or appropriate 

in the public interest and consistent with the protection of investors 

and the purposes fairly intended by the policy and provisions of the 

Act.

    For the Commission, by the Division of Investment Management, 

pursuant to delegated authority.

Eduardo A. Aleman,

Assistant Secretary.

[FR Doc. 2017-17504 Filed 8-17-17; 8:45 am]

BILLING CODE 8011-01-P