Document ID: SEC-2006-0122-0022
Agency: sec
Document Type: Notice
Title: Van Eck Associates Corporation, et al.; Notice of Application
Posted Date: 2008-08-07T04:00Z

[Federal Register: August 7, 2008 (Volume 73, Number 153)]
[Notices]               
[Page 46073-46075]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au08-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28349; 812-13507]

 
Van Eck Associates Corporation, et al.; Notice of Application

July 31, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application to amend a prior order under section 
6(c) of the Investment Company Act of 1940 (``Act'') to grant 
exemptions from sections 2(a)(32), 5(a)(1), 22(d), 22(e), and 24(d) of 
the Act and rule 22c-1 under the Act, under section 12(d)(1)(J) of the 
Act for an exemption from sections 12(d)(1)(A) and (B) of the Act, and 
under sections 6(c) and 17(b) of the Act granting an exemption from 
sections 17(a)(1) and (a)(2) of the Act.

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    Summary of Application: Applicants request an order to amend a 
prior order that permits: (a) Series of an open-end management 
investment company that are based on equity or fixed-income indexes for 
which no entity that creates, compiles, sponsors, or maintains the 
indexes is or will be an affiliated person, or an affiliated person of 
an affiliated person, of any applicant, or any sub-adviser or promoter 
to a series, to issue shares that can be redeemed only in large 
aggregations; (b) secondary market transactions in shares to occur at 
negotiated prices; (c) dealers to sell shares to purchasers in the 
secondary market unaccompanied by a prospectus when prospectus delivery 
is not required by the Securities Act of 1933; (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 large aggregations of shares; (e) under specified limited

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circumstances, certain series to pay redemption proceeds more than 
seven days after the tender of shares; and (f) certain registered 
management investment companies and unit investment trusts outside of 
the same group of investment companies as the series to acquire shares 
of the series (``Prior Order'').\1\ Applicants seek to amend the Prior 
Order in order to offer five new series (the ``New Funds'') based on 
equity securities indexes for which the investment adviser may be 
deemed a sponsor.
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    \1\ Van Eck Associates Corporation, et al., Investment Company 
Act Release Nos. 27283 (Apr. 7, 2006) (notice) and 27311 (May 2, 
2006) (order), subsequently amended by Van Eck Associates 
Corporation, et al., Investment Company Act Release Nos. 27694 (Jan 
31, 2007) (notice) and 27742 (Feb. 27, 2007) (order), subsequently 
amended by Van Eck Associates Corporation, et al., Investment 
Company Act Release Nos. 28007 (Sept. 28, 2007) (notice) and 28021 
(Oct. 24, 2007) (order).
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    Applicants: Van Eck Associates Corporation (``Adviser''), Market 
Vectors ETF Trust (``Trust''), and Van Eck Securities Corporation 
(``Distributor'').
    Filing Dates: The application was filed on March 10, 2008, and 
amended on July 10, 2008 and July 29, 2008. Applicants have agreed to 
file an amendment during the notice period, the substance of which is 
reflected in this notice.
    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 August 22, 2008, 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 may request notification of a hearing by writing to 
the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants, c/o the 
Distributor, 99 Park Avenue, 8th Floor, New York, NY 10016.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873, or Michael W. Mundt, Assistant Director, 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 for a fee at the 
Commission's Public Reference Room, 100 F Street, NE., Washington, DC 
20549-1520 (tel. 202-551-5850).

Applicants' Representations

    1. The Trust is an open-end management investment company 
registered under the Act and organized as a Delaware statutory trust. 
The Trust is organized as a series fund with multiple series. The 
Adviser, an investment adviser registered under the Investment Advisers 
Act of 1940 (``Advisers Act''), will serve as investment adviser to the 
New Funds. The Adviser may retain sub-advisers (``Sub-Advisers'') to 
manage the assets of a New Fund. Any Sub-Adviser will be registered 
under the Advisers Act. The Distributor, a broker-dealer registered 
under the Securities Exchange Act of 1934, will serve as the principal 
underwriter and distributor of the New Funds' shares.
    2. The applicants are currently permitted to offer series of the 
Trust based on equity or fixed-income securities indexes for which no 
entity that creates, compiles, sponsors, or maintains the indexes is or 
will be an ``affiliated person'' (as such term is defined in section 
2(a)(3) of the Act), or an affiliated person of an affiliated person, 
of the Trust, the Adviser, the Distributor, promoter, or any Sub-
Adviser to the series (``unaffiliated indexes'') in reliance on the 
Prior Order (``Current Funds''). Applicants seek to amend the Prior 
Order to permit the Trust to offer the New Funds based on indexes for 
which the Adviser may be deemed a sponsor due to licensing arrangements 
between the Adviser and the Index Provider (defined below).\2\
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    \2\ Applicants request that the amended order apply to any 
future series of the Trust that operate in substantially similar 
fashion to the New Funds and are based on indexes for which the 
Adviser may be deemed a sponsor due to licensing arrangements that 
are substantially identical to those described in the application 
(``Future Funds''). Any Future Fund will comply with the terms and 
conditions of the Prior Order as amended by the application.
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    3. The underlying indexes of the New Funds are rules-based, 
capitalization-weighted, float adjusted indexes comprised of equity 
securities of companies engaged in the production of certain 
commodities, including, but not limited to, industrial metals, energy 
products, precious metals and agricultural products (the ``Hard Assets 
Indexes'').\3\ Each Hard Assets Index has been created and will be 
compiled, sponsored, and maintained by S-Network Global Indexes, LLC 
(the ``Index Provider''). The Index Provider has created each Hard 
Assets Index in collaboration with James Beeland Rogers, Jr. 
(``Rogers''), the owner of Beeland Interests, Inc. (``Beeland''). None 
of the Index Provider, Rogers or Beeland is or will be an affiliated 
person, as defined in section 2(a)(3) of the Act, or an affiliated 
person of an affiliated person, of the Trust, the Adviser, any Sub-
Adviser, the Distributor, or a promoter of a New Fund.
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    \3\ The Hard Assets Indexes for the New Funds are The 
RogersTM Van Eck Hard Assets Producers 
IndexSM, The RogersTM Van Eck Hard Assets 
Producers Liquid IndexSM, The RogersTM Van Eck 
Agricultural Producers IndexSM, The RogersTM 
Van Eck Energy Producers IndexSM, and The 
RogersTM Van Eck Metals Producers IndexSM.
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    4. The Adviser has entered into a licensing agreement with the 
Index Provider pursuant to which the Adviser will pay a licensing fee 
to the Index Provider for use of the Hard Assets Indexes in connection 
with the New Funds. The Adviser has also granted the Index Provider a 
license to use the ``Van Eck'' name in connection with each Hard Assets 
Index (``VE Name License'').\4\ Applicants state that the Index 
Provider will pay the Adviser a share of the revenues earned from the 
licensing of each Hard Assets Index in exchange for the grant of the VE 
Name License. Applicants assert that, as a result of the VE Name 
License arrangements, the Adviser may be deemed a sponsor of the Hard 
Assets Indexes and the New Funds would be unable to rely on the Prior 
Order without amendment.
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    \4\ The Adviser is responsible for paying all fees associated 
with the license of the Hard Assets Indexes from the Index Provider. 
The licensing arrangements involving the Hard Assets Indexes, 
including the VE Name License, will not directly or indirectly 
affect the fees and expenses of a New Fund.
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    5. Applicants note that the restriction that the Prior Order apply 
only to series based on unaffiliated indexes is designed to address 
potential conflicts of interest. Applicants state that the potential 
conflicts relating to the possible manipulation of the Hard Assets 
Indexes are addressed through policies and procedures that require the 
Hard Assets Indexes to be transparent. Applicants state that the Index 
Provider will maintain a publicly available Web site on which it will 
publish the basic concept of each Hard Assets Index and disclose the 
composition and methodology for each Hard Assets Index (the ``Index 
Composition Methodology), in addition to the components and weighting 
of the components of each Hard Assets Index. Applicants note that the 
identity and weightings of the

[[Page 46075]]

component securities will be readily ascertainable by a third party 
because the Index Composition Methodology will be publicly available.
    6. In addition, although the Index Provider may change the rules of 
the Index Composition Methodology in the future, applicants state that 
any change to the Index Composition Methodology would not take effect 
until the Index Provider has given the Calculation Agent (defined 
below) and the public at least 60 days prior written notice of the 
change, disclosed on the Web site of the Index Provider. The 
``Calculation Agent'' is the entity that will implement the Index 
Composition Methodology, calculate and maintain the Hard Assets 
Indexes, and calculate and disseminate the values of the Hard Assets 
Indexes. The Calculation Agent is not and will not be an affiliated 
person (as defined in the Act), or an affiliated person of an 
affiliated person, of the Trust, the Adviser, any Sub-Adviser, the 
Distributor, or a promoter of a New Fund.
    7. Applicants also state that the Adviser and the Index Provider 
have adopted policies and procedures designed to prevent the 
dissemination and improper use of non-public information in a manner 
similar to firewalls. The Adviser has adopted written policies and 
procedures in accordance with rule 206(4)-7 under the Advisers Act, 
including procedures designed to prevent and detect the misuse of 
material non-public information and its Code of Ethics, as required 
under rule 17j-1 under the Act and rule 204A-1 under the Advisers Act, 
which contains provisions reasonably necessary to prevent Access 
Persons (as defined in rule 17j-1) from trading on the basis of, 
improperly disseminating or otherwise engaging in any improper use of 
nonpublic information. Applicants state that the Index Provider has 
adopted a code of ethics forbidding its personnel, including Rogers, 
from trading on the basis of, improperly disseminating or otherwise 
engaging in any improper use of nonpublic information.
    8. Applicants state that the New Funds will operate in a manner 
identical to the operation of the Current Funds under the Prior Order, 
except as specifically noted by applicants (and summarized in this 
notice). The New Funds will comply with all of the terms and conditions 
of the Prior Order as amended by the present application. Applicants 
believe that the requested relief continues to meet the necessary 
exemptive standards.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18149 Filed 8-6-08; 8:45 am]

BILLING CODE 8010-01-P