Document ID: SEC-2012-1889-0001
Agency: sec
Document Type: Notice
Title: Applications: Columbia ETF Trust, et al.
Posted Date: 2012-11-19T05:00Z

[Federal Register Volume 77, Number 223 (Monday, November 19, 2012)]
[Notices]
[Pages 69511-69516]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-28006]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30260; File No. 812-14037]

Columbia ETF Trust, et al.; Notice of Application

November 13, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order pursuant to sections 6(c) 
and 17(b) of the Investment Company Act of 1940 (the ``Act'') for an 
exemption from section 17(a) of the Act permitting certain 
transactions.

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Summary of the Application: Applicants request an order (the ``Order'') 
that would permit registered investment companies for which certain 
direct or indirect wholly owned subsidiaries of Ameriprise Financial, 
Inc. (``Ameriprise'') act as an investment adviser to engage in certain 
primary and secondary market principal transactions in fixed income 
instruments (the ``Transactions'') with Merrill Lynch, Pierce, Fenner 
and Smith Incorporated (``MLPF&S'') and Bank of America, N.A. 
(``BANA''), including an internal division of BANA (``BANA (Dealer 
Unit)'') as well as affiliates of MLPF&S and BANA (each, a ``BAC 
Trading Entity,'' together, the ``BAC Trading Entities'').

Applicants: Columbia Management Investment Advisers, LLC (``CMIA'') and 
Columbia Wanger Asset Management, LLC (``CWAM'') (each, an ``Adviser'', 
together, the ``Advisers'') and Columbia ETF Trust, Columbia ETF Trust 
I, Columbia Funds Master Investment Trust, LLC, Columbia Funds Series 
Trust, Columbia Funds Series Trust I, Columbia Funds Series Trust II, 
Columbia Funds Variable Insurance Trust, Columbia Funds Variable 
Insurance Trust I, Columbia Funds Variable Series Trust II, Columbia 
Seligman Premium Technology Growth Fund, Inc., Tri-Continental 
Corporation, Columbia Acorn Trust, Wanger Advisors Trust and Ameriprise 
Certificate Company (each a ``Fund'', collectively, the ``Funds''), 
Bank of America Corporation (``BAC''), BANA and MLPF&S.

DATES: Filing Dates: The application was filed on June 1, 2012, and 
amended on

[[Page 69512]]

October 3, 2012. 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 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 December 10, 2012, 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: Elizabeth M. Murphy, Secretary, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants, c/
o Robert M. Kurucza, Esq. and Marco E. Adelfio, Esq., Goodwin Procter 
LLP, 901 New York Avenue NW., Suite 9000, Washington, DC 20001; Scott 
R. Plummer, Esq. and Paul B. Goucher, Esq., Ameriprise Financial, Inc., 
5228 Ameriprise Financial Center, Minneapolis, MN 55474; Glen A. Rae, 
Esq., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith 
Incorporated, Bank of America Tower, NY1-100-05-01, One Bryant Park, 
5th Floor, New York, NY 10036; Brian D. McCabe, Esq., Ropes & Gray LLP, 
Prudential Tower, 800 Boylston Street, Boston, MA 02199-3600; Steve 
Chaiken, Esq., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & 
Smith Inc., 50 Rockefeller Plaza, New York, NY 10020 and Steve Chaiken, 
Esq., Bank of America Corporation, Bank of America Corporate Center, 
100 North Tryon Street, Charlotte, NC 28255.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at 
(202) 551-6915, or Daniele Marchesani, 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 Fund, except as explained below, is an open-end management 
investment company registered under the Act and is organized as a 
statutory trust, business trust, limited liability company or 
corporation under the laws of Delaware, Maryland or Massachusetts or is 
a series thereof. Columbia Seligman Premium Technology Growth Fund, 
Inc. and Tri-Continental Corporation are closed-end registered 
investment companies. Columbia ETF Trust and Columbia ETF Trust I are 
exchange-traded funds and Ameriprise Certificate Company is a face-
amount certificate company. The Funds have a variety of investment 
objectives, but each may to a greater or lesser degree invest a portion 
of its assets in fixed-income instruments. The fixed-income instruments 
in which the Funds may invest include, but are not limited to, 
government securities, municipal securities, tender option bonds, 
taxable and tax-exempt money market securities, repurchase agreements, 
asset- and mortgage-backed securities, corporate bonds and other issues 
and syndicated loans (including assignments thereof and participations 
therein), each as the Funds' respective investment policies allow.
    2. CMIA and CWAM, the Advisers, are direct or indirect wholly-owned 
subsidiaries of Ameriprise, a Delaware corporation. Each Adviser is 
registered as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act''). The Advisers act as investment advisers 
to the Funds and, in certain cases, have oversight over one or more 
affiliated or unaffiliated sub-advisers engaged by certain Funds.\1\
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    \1\ Certain of the Funds have (or may, in the future, have) sub-
advisers that provide sub-advisory services (each, a ``Sub-
Adviser,'' collectively, the ``Sub-Advisers''). Applicants request 
the order cover any such Sub-Advisers, provided that any Sub-Adviser 
that relies on the order complies with the conditions of the order 
as though it were an Adviser, unless otherwise stated.
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    3. BANA is a national banking association and a wholly owned 
indirect subsidiary of BAC. BANA (Dealer Unit) is an internal division 
of BANA, which is exempt from registering as a broker-dealer pursuant 
to the Securities Exchange Act of 1934 (``1934 Act''). MLPF&S, a 
Delaware corporation, is also a wholly owned indirect subsidiary of BAC 
that is registered as a broker-dealer with the Commission under the 
1934 Act. Each of BANA and MLPF&S as well as the affiliates of MLPF&S 
and BANA listed in Schedule C to the application (each, a ``BAC Trading 
Entity,'' and, collectively, the ``BAC Trading Entities'') act as 
dealers and/or underwriters of fixed-income instruments. The BAC 
Trading Entities listed in Schedule C are registered broker-dealers or 
entities exempt from registration.
    4. On April 30, 2010, BANA sold a portion of the asset management 
business of its wholly owned subsidiary Columbia Management Group, LLC 
(``CMG'') to Ameriprise (the ``Columbia Sale''), including the 
management of some of the Funds. The Columbia Sale also included CMG's 
own subsidiary, Columbia Wanger Asset Management, L.P. (now CWAM), the 
investment adviser to certain Funds. After the Columbia Sale, 
RiverSource Investments, LLC changed its name to Columbia Management 
Investment Advisers, LLC (CMIA). CMIA became the investment adviser for 
all Funds, including legacy RiverSource Funds and the former long-term 
Columbia Funds, other than those advised by CWAM.
    5. Following the Columbia Sale the Advisers are not under the 
control (within the meaning of section 2(a)(9) of the Act) of BAC and 
are not under common control with the BAC Trading Entities. However, 
certain fiduciary accounts maintained by BANA's trust department 
(``BANA (US Trust)'') \2\ for the principals or beneficiaries of such 
accounts are invested in the Fund's securities (``fiduciary account 
investments''). BANA (US Trust) has discretionary authority over, but 
no pecuniary interest in, such investments.\3\ Because of these 
investments, there may be affiliations between the BAC Trading Entities 
and the Funds.
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    \2\ BANA (US Trust) includes Bank of America, U.S. Trust Private 
Wealth Management, including U.S. Trust Company of Delaware, the 
Retirement and Philanthropic Services unit, and the Merrill Lynch 
Trust Company division and any successors. The term ``successor'' is 
limited to an entity that results from a reorganization into another 
jurisdiction, a change in the type of business organization or a 
combination, consolidation or reorganization of any of the entities 
covered by the Order, including any such combination, consolidation 
or reorganization effected through the use of a ``shell'' entity 
controlled by any of the entities covered by the Order, provided 
that such combination, consolidation or reorganization does not 
result in a change of direct or indirect control of such entities.
    \3\ Applicants note that there may be some instances in which 
BAC or an entity, including a division thereof, controlled by BAC 
(each, a ``BAC Affiliate,'' collectively, the ``BAC Affiliates'') 
might be deemed to own, control or hold with power to vote less than 
five percent of the outstanding voting securities of a Fund 
otherwise than through fiduciary account investments (a ``<5% 
holding''). References to potential affiliations arising ``solely by 
reason of'' fiduciary account investments above certain levels may 
include situations where fiduciary account investments exceed such 
levels only when added to a <5% holding.
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    6. Applicants state that, because of consolidation in the financial 
services

[[Page 69513]]

industry, a few major broker-dealers account for a large percentage of 
the market share in connection with trading in various asset classes, 
including fixed income instruments. Applicants state that the decline 
in the number of broker-dealers and banks trading in the fixed-income 
instruments in which the Funds seek to invest and the increasing 
significance of the few remaining institutions demonstrate the 
importance to the Funds of their relationships with such entities, 
including the BAC Trading Entities. Applicants further represent that 
the BAC Trading Entities were the top-ranked underwriters in the 
following categories of fixed-income instruments in 2011: Investment 
grade-credit; U.S. leveraged loans; residential mortgage-backed 
securities; asset-backed securities; and U.S. commercial paper. 
Applicants also represent that the BAC Trading Entities were the second 
or third-ranked dealers or underwriters in 2011 in the following 
categories of fixed-income instruments: high-yield corporate credit; 
investment grade-credit; collateralized mortgage obligations; asset-
backed securities; and municipal securities. As described more fully in 
the application, BAC Trading Entities had similar levels of market 
share in 2009 and 2010 and were a significant trading partner of the 
legacy RiverSource funds prior to the Columbia Sale.
    7. Applicants assert that prohibiting the Funds from engaging in 
the Transactions with the BAC Trading Entities would become 
increasingly detrimental to the ongoing interests of Fund shareholders 
by limiting the Funds' access to important trading counterparties that 
have very significant market shares in many of the types of instruments 
that the Funds purchase. Applicants submit that prohibiting the Funds 
from engaging in Transactions with the BAC Trading Entities 
unnecessarily reduces the opportunities available to the Funds to 
obtain competitive pricing and execution and to access the markets for 
particular fixed-income instruments that are available from only a few 
dealers. Applicants assert that precluding a Fund from trading with a 
BAC Trading Entity may harm the Fund by, among other things, preventing 
it from obtaining the best pricing, terms and quality of services 
otherwise available in the market.
    8. Applicants, therefore, request the Order, pursuant to sections 
6(c) and 17(b) of the Act exempting Transactions entered into in the 
ordinary course of business by a Fund with BAC Trading Entities, under 
the circumstances described in the application, from the provisions of 
section 17(a) of the Act.\4\ The ``Transactions'' that are the subject 
of the Order include primary and secondary market transactions in 
fixed-income instruments executed on a principal basis between a Fund 
and a BAC Trading Entity.
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    \4\ Applicants are not seeking relief from the provisions of 
sections 10(f), 17(e) or 17(d) of the Act or rule 17d-1 thereunder.
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    The Order would be available only where the BAC Trading Entity is 
deemed to be a first-tier or a second-tier affiliate of a Fund solely 
by reason of fiduciary account investments in the voting securities of 
an Owned Fund, as defined below. In particular, the Order would be 
available only in circumstances in which the BAC Trading Entity might 
be deemed to be (i) An affiliated person (``first-tier affiliate''), in 
the case of BANA (Dealer Unit), or an affiliated person of a first-tier 
affiliate (a ``second-tier affiliate'') of a Fund solely by reason of 
BANA (US Trust), being deemed to own, control or hold with power to 
vote through fiduciary account investments five percent or more of the 
Fund's total outstanding voting securities (each, a ``5% Fund''); (ii) 
a first-tier affiliate of a Fund solely by reason of BANA (US Trust) 
being deemed to beneficially own through the fiduciary account 
investments more than twenty-five percent of the Fund's total 
outstanding voting securities or, by virtue of such fiduciary account 
investments, to control the Fund (each, a ``25% Fund,'' together with 
the 5% Funds, the ``Owned Funds''); and/or (iii) a second-tier 
affiliate of any Fund other than an Owned Fund (each, an ``Other 
Fund'') solely by reason of BANA (US Trust) being considered to own, 
control or hold with power to vote a 5% Fund's securities as described 
in (i) or being deemed to beneficially own a 25% Fund's securities as 
described in (ii), through fiduciary account investments.
    9. Applicants seek to have the Order cover (i) The Funds and any 
investment company registered under the Act or series thereof, whether 
now existing or organized in the future, that is managed, advised or 
sub-advised by any Adviser or by any existing or future entity that is 
controlling, controlled by or under common control with CMIA and/or 
CWAM or controlled by Ameriprise and registered as an investment 
adviser under the Advisers Act; (ii) the Advisers and/or any existing 
or future investment adviser controlling, controlled by or under common 
control with CMIA and/or CWAM or controlled by Ameriprise; and (iii) 
the BAC Trading Entities and any successor entities; provided that any 
entity that relies on the Order complies with the terms and conditions 
of the Order as though it were an applicant.
    10. Applicants request relief only for Transactions that would be 
prohibited by section 17(a) because of affiliations, if any, arising 
solely by reason of BANA (US Trust) being deemed to own, control or 
hold with the power to vote voting securities of an Owned Fund through 
fiduciary account investments. The relief would not be available where 
a BAC Trading Entity is a first-tier affiliate or a second-tier 
affiliate of a Fund for other reasons. The relief would not be 
available for Transactions between a Fund and any trading entity under 
common control with the Fund's Adviser. The relief would also not be 
available for primary market Transactions in fixed-income instruments, 
other than repurchase agreements and variable rate demand notes, of 
which BAC (or any successor) or any entity controlled by BAC (or any 
successor), including any BAC Trading Entity, is the primary obligor.
    11. Neither BAC nor any BAC Affiliates control or will control 
(within the meaning of section 2(a)(9) of the Act), directly or 
indirectly, Ameriprise or the Advisers or any other non-Fund entity 
under the control of Ameriprise (together, the ``Ameriprise 
Affiliates''). Applicants state that only the fiduciary account 
investments in the Owned Funds raise the affiliation issues addressed 
by the requested relief. Additionally, Ameriprise has no beneficial 
interest in, and will not control (within the meaning of section 
2(a)(9) of the Act) directly or indirectly, BAC, the BAC Trading 
Entities or any other BAC Affiliate.
    12. The BAC Affiliates and the Ameriprise Affiliates are structured 
as separate, independent businesses. Applicants state that the BAC 
Affiliates will not have any involvement in the Advisers' investment 
decisions or decisions to engage in Transactions pursuant to the Order, 
and will not attempt to influence or control in any way the placing by 
the Advisers of orders, other than in the normal course of sales 
activities of the same nature that are being carried out during the 
same time period with respect to unaffiliated institutional clients of 
the BAC Trading Entity.
    13. Applicants state that each Fund has adopted confidentiality 
policies designed to limit the unnecessary flow of information about 
Fund holdings and transactions. Applicants note there are effective, 
existing separation and information barriers between the Advisers and 
the Funds on the one hand

[[Page 69514]]

and the BAC Trading Entities on the other. Applicants assert that there 
is substantial internal separation and independent operation of the BAC 
Trading Entities from the other BAC Affiliates and of BANA (US Trust) 
from BANA (Dealer Unit). BANA (US Trust) is subject to strict fiduciary 
laws and regulations that require BANA (US Trust) to act solely in the 
interests of the principals or beneficiaries of the accounts. 
Applicants represent that there is not, and will not be, any express or 
implied understanding between a BAC Trading Entity and Ameriprise or 
any Adviser that an Adviser will cause a Fund to enter into 
Transactions or give preference to the BAC Trading Entity in effecting 
such Transactions between the Fund and the BAC Trading Entity.
    14. Ameriprise and the Ameriprise Affiliates, including the 
Advisers, will not adopt any compensation scheme any component of which 
is based on the amount of business done by the Funds with a BAC Trading 
Entity except to the extent such business might affect indirectly the 
profits or losses of the Advisers. BAC and the BAC Affiliates, 
including BANA (US Trust), will not adopt any compensation scheme any 
component of which is based on a factor that compensates employees for 
Transactions with the Funds differently than Transactions with 
unaffiliated counterparties.
    15. BANA (US Trust) undertakes to not to exercise any voting 
authority with respect to shares that constitute five percent or more 
of a Fund's total outstanding voting securities, including in 
connection with the election of directors/trustees (the ``Non-Voting 
Undertaking'').

Applicants' Legal Analysis

    1. Section 17(a) of the Act, among other things, prohibits an 
affiliated person of a registered investment company, or any affiliated 
person of such a person, acting as principal, from selling to or 
purchasing from such registered company any security or other property 
and from borrowing money or other property from such investment 
company. Section 17(b) of the Act authorizes the Commission to exempt a 
transaction from section 17(a) of the Act if evidence establishes that 
the terms of the proposed 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 policy of each registered investment 
company concerned and with the general purposes of the Act.
    2. Section 6(c) of the Act, in relevant part, authorizes the 
Commission to exempt any person or transaction, or any class or classes 
of persons or transactions, from any provision or provisions 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.
    3. Section 2(a)(3) of the Act defines ``affiliated person'' of 
another person to include: (a) Any person directly or indirectly 
owning, controlling, or holding with power to vote, 5% or more of the 
outstanding voting securities of such other person; (b) any person 5% 
or more of whose outstanding voting securities are directly or 
indirectly owned by, controlled, or held with power to vote, by such 
person; and (c) any person directly or indirectly controlling, 
controlled by, or under common control with, such other person.
    4. Section 2(a)(9) of the Act, in relevant part, defines 
``control'' as ``the power to exercise a controlling influence over the 
management or policies of a company, unless such power is solely the 
result of an official position with such company.'' Section 2(a)(9) 
also provides that any person who owns beneficially, either directly or 
through one or more controlled companies, more than 25% of the voting 
securities of a company shall be presumed to control such company. Any 
person who does not so own more than 25% of the voting securities of 
any company shall be presumed not to control such company.
    5. Applicants state that a BAC Trading Entity could be deemed to be 
a first-tier affiliate or a second-tier affiliate of a 5% Fund insofar 
as fiduciary account investments of five percent or more of an Owned 
Fund's outstanding voting securities could cause BANA (US Trust) to be 
viewed as owning, controlling or holding with power to vote ``voting 
securities.'' Were BANA (US Trust) to be deemed a first-tier affiliate 
of a 5% Fund, the BAC Trading Entities (except for BANA (Dealer Unit)) 
would then be deemed to be second-tier affiliates of the 5% Fund. BANA 
(Dealer Unit), on the other hand, could be deemed to be a first-tier 
affiliate of the 5% Fund. Additionally, a BAC Trading Entity could be 
deemed a first-tier affiliate of a 25% Fund and a second-tier affiliate 
of the Other Funds.\5\ Applicants submit that, due to the fiduciary 
account investments, any Transaction involving a Fund and a BAC Trading 
Entity that is a first-tier affiliate or a second-tier affiliate 
thereof, would be subject to the prohibition of section 17(a) of the 
Act.
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    \5\ As discussed in the application, this conclusion could be 
reached if, on account of the fiduciary account investments, BANA 
(US Trust) ``beneficially owned'' greater than twenty-five percent 
of the 25% Fund's total outstanding voting securities. The Owned 
Fund could then be presumed to be under the control of BANA (US 
Trust), and thus of BAC. As wholly owned subsidiaries of BAC, the 
BAC Trading Entities may also be presumed to be under the control of 
BAC. Accordingly, the 25% Fund and the BAC Trading Entities could be 
presumed to be under the common control of BAC and thus first-tier 
affiliates of each other. If the 25% Fund and the Other Funds are 
deemed to be under the control of their respective Adviser(s), then 
the 25% Fund and the Other Funds could be deemed to be first-tier 
affiliates of each other by virtue of being under common control. 
Therefore, if the BAC Trading Entities are deemed to be first-tier 
affiliates of the 25% Fund, they could be deemed to be second-tier 
affiliates of the Other Funds.
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    6. Applicants submit that the primary purpose of section 17(a) is 
to prevent a person with the power to control an investment company 
from essentially engaging in self-dealing, to the detriment of the 
investment company's shareholders. Applicants submit that the policies 
which section 17(a) were meant to further are not implicated here 
because BAC and BAC Trading Entities are not able to cause a Fund to 
enter into a Transaction or otherwise influence portfolio decisions by 
the Advisers on behalf of the Funds. Applicants state that, as a 
result, no BAC Trading Entity is in a position to engage in self-
dealing or otherwise cause any of the relevant Funds to enter into 
Transactions that are not in the best interests of its shareholders.
    7. Applicants submit that the carefully circumscribed circumstances 
under which the Transactions would be conducted, including in 
particular the proposed conditions for the Order (set out below), amply 
satisfy the statutory standards for relief. Applicants state that 
compliance with the ``Structural Conditions'' set forth below is 
intended to assure that the Advisers and the Funds continue to operate 
independently of, and free of any undue influence by, BAC and the BAC 
Trading Entities, which applicants assert is further buttressed by the 
Non-Voting Undertaking. Moreover, neither BAC, nor any BAC Affiliate 
will exercise, or attempt to exercise, control over any Fund.
    8. Applicants state that compliance with the ``Transactional 
Conditions'' set forth below is designed to assure that the terms of 
the individual transactions are fair from the perspective of the Funds. 
Applicants note that, at the outset, the conditions require each

[[Page 69515]]

Fund's Board of Directors, Board of Trustees or other governing body of 
such Fund, as applicable (each, a ``Board''), including a majority of 
its disinterested directors or trustees, as applicable (``Necessary 
Majority''), to approve, and the Fund to implement, procedures 
governing all Transactions pursuant to the Order. Applicants submit 
that, pursuant to such procedures, the Transactions will be subject to 
ongoing review by each Fund's chief compliance officer, and will be 
reviewed by its Board, including a Necessary Majority, on a quarterly 
basis. In addition, the Board must annually consider the level of 
Transactions with BAC Trading Entities and whether continued reliance 
on the Order is appropriate in light of the need of the Funds to have 
the BAC Trading Entities available as trading counterparties. The 
conditions also generally require price quotations from unaffiliated 
dealers that are in a position to quote competitive prices to ensure 
that the terms of the particular Transactions are fair and reasonable 
and do not involve overreaching. For primary market Transactions, the 
conditions generally require that the Funds purchase instruments at a 
price that is not more than the price paid by each other purchaser, and 
on the same terms as other purchasers, in that offering or in any 
concurrent offering.
    9. Applicants state that the Transactions described in the 
Application satisfy the standards of sections 6(c) and 17(b). 
Applicants submit that there is no danger of overreaching or self-
dealing by a BAC Trading Entity in connection with a Transaction, and 
there will be no conflict of interest associated with an Adviser's or 
Sub-Adviser's decision to engage in a Transaction with a BAC Trading 
Entity on behalf of a Fund. Moreover, applicants state that the Order 
is consistent with the policies of the Funds and the protection of 
investors, as the Advisers and Sub-Advisers will manage the Funds in 
accordance with the policies and investment objectives of the Funds and 
without any influence by the BAC Trading Entities. Finally, applicants 
state that permitting the Transactions will be appropriate in the 
public interest and consistent with general purposes of the Act because 
the ability to engage in Transactions increases the likelihood of a 
Fund achieving the best pricing, terms and quality of service otherwise 
available in the market in such transactions and results in none of the 
abuses that the Act was designed to prevent.

Applicants' Conditions

    Applicants agree that the Order granting the requested relief will 
be subject to the following conditions:

A. Structural

    (1) Neither BAC nor any BAC Affiliates will control any of the 
Advisers or principal underwriters or promoters for the Funds, directly 
or indirectly, within the meaning of section 2(a)(9) of the Act, and 
neither BAC nor any BAC Affiliates will exercise, or attempt to 
exercise, control over any Fund. The Order will remain in effect only 
so long as Ameriprise, or another entity not controlling, controlled by 
or under common control with BAC, primarily controls the Advisers. In 
this regard, pursuant to the Non-Voting Undertaking, BANA (US Trust) 
will not exercise any voting authority that it possesses with respect 
to shares that constitute five percent or more of any Fund's total 
outstanding voting securities. Instead, it will delegate to an 
independent third party that is not affiliated with either BAC or any 
BAC Affiliate the voting of such shares.
    (2) Neither BAC nor any BAC Affiliates will directly or indirectly 
consult with Ameriprise or any Ameriprise Affiliate, including the 
Advisers, or any portfolio manager of the Advisers concerning purchase 
or sale Transactions, or the selection of a broker or dealer for any 
Transactions placed or to be placed on behalf of a Fund, or otherwise 
seek to influence the choice of broker or dealer for any Transaction by 
a Fund, other than in the normal course of sales activities of the same 
nature that are being carried out during the same time period with 
respect to unaffiliated institutional clients of the BAC Trading 
Entity, or that existed between the BAC Trading Entity and the 
Advisers, if any, prior to consummation of the Columbia Sale.
    (3) No officer, director or employee of an Owned Fund will directly 
or indirectly seek to influence in any way the terms of any Transaction 
covered by the Order, other than in the normal course of investment 
activities of the same nature that are being carried out during the 
same time period with respect to unaffiliated broker-dealers, or that 
existed between the BAC Trading Entity and the Advisers, if any, prior 
to consummation of the Columbia Sale.
    (4) The Advisers and each BAC Trading Entity are structured as 
separate organizations, with separate capitalization, separate books 
and records, and separate officers and employees, and are physically 
separated. Each BAC Trading Entity will adopt and implement policies 
that prohibit the BAC Trading Entity from (a) linking any approval or 
action relating to an Owned Fund to any action by any Fund or by an 
Adviser relating to any Fund, or (b) using the fiduciary account 
investments in an Owned Fund as a basis for seeking to persuade any 
Fund or the Advisers to engage in business with the BAC Trading Entity. 
The Funds have adopted policies designed to keep information about 
their holdings and transactions on a confidential basis, prior to any 
public disclosure, except in connection with the ordinary course of 
business as permitted by the portfolio holdings disclosure policies 
approved by the Funds' directors/trustees and involving communications 
of the same nature as are being made during the same period to 
unaffiliated trading partners of the Funds. Pursuant to these policies, 
the Advisers will designate information regarding investment advisory 
and portfolio execution matters relating to the Funds as information 
that may not be communicated between the Owned Fund, on the one hand, 
and the BAC Trading Entity, on the other hand, prior to any public 
disclosure.
    (5) Ameriprise and the Ameriprise Affiliates will not adopt any 
compensation scheme any component of which is based on the amount of 
business done by the Funds with a BAC Trading Entity except to the 
extent such business might affect indirectly the profits or losses of 
the Advisers. BAC and the BAC Affiliates will not adopt any 
compensation scheme any component of which is based on a factor that 
compensates employees for Transactions with the Funds differently than 
Transactions with unaffiliated counterparties.
    (6) The Advisers and the BAC Trading Entities, with the assistance 
of their respective legal/compliance departments, will prepare 
guidelines for their respective personnel to make certain that 
Transactions effected pursuant to the Order comply with its conditions, 
and that the Advisers and the BAC Trading Entities maintain an arms-
length relationship. The respective legal/compliance departments of the 
Advisers and the BAC Trading Entities will monitor periodically the 
activities of the Advisers and the BAC Trading Entities, respectively, 
to make certain that the conditions of the Order are met.

B. Transactional

    With respect to each Transaction entered into or effected pursuant 
to the Order on behalf of a Fund:
    (1) Each Fund's Board, including the Necessary Majority, shall 
approve, and

[[Page 69516]]

the Fund shall implement, procedures governing all Transactions 
pursuant to the Order and the Fund's Board shall no less frequently 
than quarterly review all Transactions conducted pursuant to the Order 
and receive and review a report of those Transactions. Such report, 
which will be prepared by the Advisers and reviewed and approved by the 
Fund's Chief Compliance Officer, will indicate for each Transaction 
that the conditions of the Order have been satisfied, and will include 
a discussion of any significant changes in the volume, type or terms of 
Transactions between the relevant Funds and the BAC Trading Entity, the 
reasons for these changes, and a determination that such changes are 
appropriate. In addition, the Board will annually consider (i) whether 
the level of Transactions with BAC Trading Entities is appropriate and 
(ii) whether continued reliance on the Order in any applicable category 
of fixed-income instruments is appropriate in light of the need of the 
Funds to have the BAC Trading Entities available as trading 
counterparties, as evidenced by, among other things, the aggregate 
market share of the BAC Trading Entities in each such category.
    (2) For each Transaction, the Adviser or Sub-Adviser will adhere to 
a ``best execution'' standard and will consider only the interests of 
the Funds and will not take into account the impact of a Fund's 
investment decision on the BAC Trading Entity. Before entering into any 
such Transaction, the Adviser or Sub-Adviser will determine that the 
Transaction is consistent with the investment objective(s) and policies 
of the Fund and is in the best interests of the Fund and its 
shareholders.
    (3) Each Fund will (a) for so long as the Order is relied upon, 
maintain and preserve in an easily accessible place a written copy of 
the procedures and conditions (and any modifications thereto) that are 
described herein, and (b) maintain and preserve for a period of not 
less than six years from the end of the fiscal year in which any 
Transaction in which the Adviser or Sub-Adviser knows that both a BAC 
Trading Entity and a Fund directly or indirectly have an interest 
occurs, the first two years in an easily accessible place, a written 
record of each such Transaction setting forth a description of the 
security purchased or sold by the Fund, a description of the BAC 
Trading Entity's interest or role in the Transaction, the terms of the 
Transaction, and the information or materials upon which the 
determination was made that each such Transaction was made in 
accordance with the procedures and conditions set forth herein.
    (4) Except for Transactions involving repurchase agreements and 
variable rate demand notes, before any secondary market principal 
Transaction in fixed-income instruments is entered into between a Fund 
and a BAC Trading Entity, the Adviser or Sub-Adviser must obtain a 
competitive quotation for the same instruments (or in the case of 
instruments for which quotations for the same instruments are not 
available, a competitive quotation for Comparable Instruments) from at 
least two unaffiliated dealers that are in a position to quote 
favorable market prices, except that if, after reasonable efforts by 
the Adviser or Sub-Adviser, quotations are unavailable from two such 
dealers, only one other competitive quotation is required. For each 
such Transaction, the Adviser or Sub-Adviser will determine, based upon 
the quotations and such other relevant information reasonably available 
to the Adviser or Sub-Adviser, as applicable (such as available 
transaction prices and any other information regarding the value of the 
instruments), that the price available from the BAC Trading Entity is 
at least as favorable as that available from other sources.
    (a) Repurchase Agreements. With respect to Transactions involving 
repurchase agreements, a Fund will enter into such agreements only 
where the Adviser or Sub-Adviser has determined, based upon information 
reasonably available to the Adviser or Sub-Adviser, as applicable, that 
the income to be earned from the repurchase agreement is at least equal 
to that available from other sources. Before any repurchase agreements 
are entered into pursuant to the Order, the Fund or the Adviser or Sub-
Adviser, as applicable, must obtain competitive quotations from at 
least two unaffiliated dealers with respect to repurchase agreements 
comparable to the type of repurchase agreement involved, except that 
if, after reasonable efforts by the Adviser or Sub-Adviser, quotations 
are unavailable from two such dealers, only one other competitive 
quotation is required.
    (b) Variable Rate Demand Notes. With respect to each Transaction 
involving variable rate demand notes for which dealer quotes are not 
ordinarily available, a Fund will only undertake purchases and sales 
where the Adviser or Sub-Adviser has determined, based on relevant 
information reasonably available to the Adviser or Sub-Adviser, as 
applicable, that the income earned from the variable rate demand note 
is at least equal to that of variable rate demand notes of comparable 
quality that are available from other sources.
    (5) With respect to instruments offered in a primary market 
underwritten, or other primary market, Transaction, the Fund will 
undertake such purchase from a BAC Trading Entity only where the 
Adviser or Sub-Adviser has determined, based upon relevant information 
reasonably available to the Adviser or Sub-Adviser, as applicable, that 
the instruments will be purchased at a price that is not more than the 
price paid by each other purchaser of the instruments from, as 
relevant, the BAC Trading Entity or other members of an underwriting 
syndicate in that offering or in any concurrent offering of 
instruments, and on the same terms as such other purchasers (except in 
the case of an offering conducted under the laws of a country other 
than the United States, for any rights to purchase that are required by 
law to be granted to existing holders of the issuer). If no information 
regarding concurrent purchasers of the instruments is reasonably 
available to the Adviser or Sub-Adviser, the Fund may undertake such 
purchase from a BAC Trading Entity when the Adviser or Sub-Adviser has 
determined, based upon information reasonably available to the Adviser 
or Sub-Adviser, as applicable, that the yield on the instruments to be 
purchased is at least equal to that available on Comparable Instruments 
from other sources at that time.
    (6) The commission, fee, spread, or other remuneration to be 
received by the BAC Trading Entities must be reasonable and fair 
compared to the commission, fee, spread, or other remuneration received 
by others in connection with comparable transactions involving similar 
instruments being purchased or sold during a comparable period of time.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-28006 Filed 11-16-12; 8:45 am]
BILLING CODE 8011-01-P