Document ID: SEC-2009-0286-0001
Agency: sec
Document Type: Notice
Title: Applications: IndexIQ ETF Trust, et al
Posted Date: 2009-03-04T05:00Z

[Federal Register: March 4, 2009 (Volume 74, Number 41)]
[Notices]               
[Page 9442-9449]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04mr09-93]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28638; 812-13441]

 
IndexIQ ETF Trust, et al.; Notice of Application

February 27, 2009.
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 (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; and 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) for an exemption from Sections 12(d)(1)(A) and (B) 
of the Act.

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Applicants: IndexIQ ETF Trust (``Trust''), IndexIQ Advisors LLC 
(``Advisor'') and ALPS Distributors, Inc. (``Distributor'').

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 (``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 after 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; and (e) certain registered management investment companies and 
unit investment trusts outside of the same group of investment 
companies as the series to acquire Shares of certain series.

Filing Dates: The application was filed on October 23, 2007 and amended 
on August 1, 2008, November 19, 2008, January 28, 2009 and February 12, 
2009. 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 March 19, 2009, 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: Gregory Bassuk, 
IndexIQ ETF Trust and IndexIQ Advisors LLC, 800 Westchester Avenue, 
Suite N-611, Rye Brook, NY 10573; ALPS Distributors, Inc., c/o Thomas 
A. Carter, 1290 Broadway, Suite 1100, Denver, CO 80203.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel at 
(202) 551-6811 or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

[[Page 9443]]

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, telephone (202) 551-5850.

Applicants' Representations

    1. The Trust is organized as a Delaware statutory trust and is 
registered as an open-end management investment company under the Act. 
The Trust will initially offer Shares of five series (``Initial 
Funds''), each of which will track an equity securities index 
(``Index'').\1\
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    \1\ The Initial Funds are: IQ Hedge Multi-Strategy Composite 
ETF, IQ Hedge Long/Short ETF, IQ Hedge Macro ETF, IQ Hedge Event-
Driven ETF, and IQ Hedge Market Neutral ETF.
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    2. Applicants request that the order apply to the Initial Funds and 
any additional series of the Trust and other open-end investment 
management companies registered under the Act or series thereof, that 
may be created in the future (the ``Future Funds'').\2\ Any Future Fund 
will be (a) advised by the Advisor or an entity controlling, controlled 
by or under common control with the Advisor, and (b) comply with the 
terms and conditions of the application. The Initial Funds and the 
Future Funds together are the ``Funds.''
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    \2\ All existing entities that intend to rely on the order are 
named as applicants. Any other existing or future entity that relies 
on the order in the future will comply with the terms and conditions 
of the application. A Fund of Funds (as defined below) may rely on 
the order only to invest in Single-Tier Funds (as defined below) and 
not in any other registered investment company, Initial Fund or FOF 
Fund (as defined below).
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    3. The Advisor, a Delaware limited liability company, is registered 
as an investment adviser under the Investment Advisers Act of 1940, as 
amended (the ``Advisers Act'') and will serve as the investment adviser 
to each Fund. The Advisor may enter into sub-advisory agreements with 
one or more investment advisers each of which will serve as a sub-
adviser to a Fund (each, a ``Subadvisor''). Each Subadvisor will be 
registered under the Advisers Act. The Distributor is a broker-dealer 
registered under the Securities Exchange Act of 1934 (the ``Exchange 
Act'') and will act as the principal underwriter and distributor for 
the Creation Units of Shares. The Distributor is not affiliated with 
the Advisor or any Subadvisor.
    4. Each Fund will hold certain equity securities and other 
financial instruments (``Portfolio Holdings'') selected to correspond, 
before fees and expenses, generally to the price and yield performance 
of an Index. The Index for each Initial Fund will consist primarily of 
exchange-traded funds (``ETFs'') and shares of pooled investment 
vehicles (``ETVs'') \3\ (each such Index, a ``FOF Index''). The Initial 
Funds and any other Fund that has a FOF Index as its Index are referred 
to herein as ``FOF Funds.'' Certain of the Indexes for Future Funds may 
be composed of equity securities of domestic issuers and non-domestic 
issuers meeting the requirements for trading in U.S. markets 
(``Domestic Indexes''). Other Indexes for Future Funds may be composed 
of equity securities of non-domestic issuers (``International 
Indexes''). Funds that track Domestic Indexes are referred to as 
``Domestic Funds'' and Funds that track International Indexes are 
referred to as ``International Funds.'' Funds that track Indexes that 
are not FOF Indexes are referred to as ``Single-Tier Funds.'' The 
Indexes are based on a proprietary, rules-based methodology developed 
by Financial Development HoldCo LLC (d/b/a INDEXIQ) (``FDH'') (``Rules-
Based Process''). The Rules-Based Process, including the rules which 
govern the inclusion and weighting of securities in the Indexes, will 
be publicly available, including on the Funds' Web site (``Web site''), 
along with the identities and weightings of the component securities of 
each Index (``Index Constituents'') and the Portfolio Holdings of each 
Fund. While FDH may modify the Rules-Based Process in the future, FDH 
does not intend to do so. Any change to the Rules-Based Process would 
not take effect until FDH had given the public at least 60 days advance 
notice of the change and had given reasonable notice of the change to 
the Calculation Agent. The ``Calculation Agent'' is the entity that, 
pursuant to an agreement with FDH, is solely responsible for all Index 
calculation, maintenance and dissemination activities.\4\ The 
Calculation Agent is not, and will not be, an affiliated person, or an 
affiliated person of an affiliated person, of the Funds, the Advisor, 
any Subadvisor, the Distributor or any promoter of the Funds. The 
Indexes will be reconstituted on a periodic basis no more frequently 
that monthly.
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    \3\ Each ETV will be structured as a special purpose vehicle 
that owns a pool of assets and has issued equity interests in such 
pool for sale by registering with the Commission under the 
Securities Act of 1933, as amended (``Securities Act'').
    \4\ The Calculation Agent will determine the number, type and 
weight of Index Constituents that comprise each Index and will 
perform all other calculations that are necessary to determine the 
proper constitution of each Index. FDH will not disclose any 
information about any Index's constitution to the Advisor, any 
Subadvisor or the Funds prior to the publication of such information 
on the Web site. However, an employee of FDH will monitor the Rules-
Based Process and the Indexes (``Index Administrator''), and other 
employees of FDH may be appointed to assist the Index Administrator 
(``Index Group,'' and together with the Index Administrator, ``Index 
Provider'').
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    5. Applicants state that the Index Provider will not have any 
responsibility for the management of the Funds. In addition, applicants 
have adopted policies and procedures that, among other things, are 
designed to limit or prohibit communications between the Index Provider 
and its other employees (``Firewalls''). Among other things, the 
Firewalls prohibit the Index Provider from disseminating non-public 
information about the Indexes, including potential changes to the 
Rules-Based Process, to, among others, the employees of the Advisor and 
any Subadvisor responsible for managing the Funds or any Affiliated 
Account (as defined below) (``advisory personnel''). An Affiliated 
Account is any registered investment company, separately managed 
account of institutional investors or privately offered fund that is 
not deemed to be an investment company in reliance on Section 3(c)(1) 
or Section 3(c)(7) of the Act for which FDH acts as investment advisor 
or subadvisor. The Advisor also has adopted Firewalls that prohibit 
advisory personnel from sharing any non-public information about the 
Funds and any Affiliated Account with the Index Provider. Further, the 
Advisor and any Subadvisor has or will have, pursuant to rule 206(4)-7 
under the Advisers Act, written policies and procedures designed to 
prevent violations of the Advisers Act and the rules under the Advisers 
Act. The Advisor, any Subadvisor and Distributor also have adopted or 
will adopt a Code of Ethics as required under rule 17j-1 under the Act, 
which contains provisions reasonably necessary to prevent Access 
Persons (as defined in rule 17j-1) from engaging in any conduct 
prohibited in rule 17j-1. In addition, the Advisor and any Subadvisor 
has adopted or will adopt policies and procedures to detect and prevent 
insider trading as required under Section 204A of the Advisers Act, 
which are reasonably designed taking into account the nature of their 
business, to prevent the misuse in violation of the Advisers Act, 
Exchange Act, or rules and regulations under the Advisers Act and 
Exchange Act, of material non-public information.
    6. The investment objective of each Fund will be to provide 
investment results that correspond, before fees and expenses, generally 
to the price and

[[Page 9444]]

yield performance of its Index.\5\ Intra-day values of each Index will 
be disseminated every 15 seconds throughout the trading day. A Fund 
will utilize either a replication or representative sampling strategy 
which will be disclosed with regard to each Fund in its prospectus 
(``Prospectus'').\6\ A Fund using a replication strategy will invest in 
the Index Constituents in its Index in approximately the same 
proportions as in the Index. In certain circumstances, such as when 
there are practical difficulties or substantial costs involved in 
holding every security in an Index or when one or more Index 
Constituents is less liquid, illiquid or unavailable, a Fund may use a 
representative sampling strategy pursuant to which it will invest in 
some, but not all of the Index Constituents of its Index.\7\ Applicants 
anticipate that a Fund that utilizes a representative sampling strategy 
will not track the performance of its Index with the same degree of 
accuracy as an investment vehicle that invests in all Index 
Constituents of the Index with the same weighting as the Index. 
Applicants expect that each Fund will have a tracking error relative to 
the performance of its Index of less than 5 percent.
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    \5\ Applicants represent that each Single-Tier Fund will invest 
at least 80% of its total assets in some or all of the Index 
Constituents of its Index or, in the case of International Funds, 
Index Constituents and depositary receipts representing such Index 
Constituents. ``Depositary Receipts'' will typically be American 
Depositary Receipts, but may include Global Depositary Receipts and 
Euro Depositary Receipts. Each FOF Fund will invest at least 80% of 
its total assets in ETFs, ETVs and other Index Constituents of its 
FOF Index. Each Fund also may invest up to 20% of its assets in 
certain futures, options and swap contracts, cash and cash 
equivalents, as well as in stocks not included in its Index, but 
which the Advisor or Subadvisor believes will help the Fund track 
its Index.
    \6\ All representations and conditions contained in the 
application that require a Fund to disclose particular information 
in the Fund's Prospectus and/or annual report shall be effective 
with respect to the Fund until the time that the Fund complies with 
the disclosure requirements adopted by the Commission in Investment 
Company Act Release No. 28584 (Jan. 13, 2009).
    \7\ Under the representative sampling strategy, the Advisor and 
any Subadvisor will seek to construct a Fund's portfolio so that its 
market capitalization, industry weightings, fundamental investment 
characteristics (such as return variability, earnings valuation and 
yield) and liquidity measures perform like those of the Index.
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    7. Creation Units are expected to range between 15,000 to 200,000 
Shares as will be clearly stated in the relevant Fund's Prospectus. 
Applicants expect that the initial price of a Creation Unit will fall 
in the range of $1,000,000 to $10,000,000. All orders to purchase 
Creation Units must be placed with the Distributor, by or through a 
party that has entered into an agreement with the Distributor 
(``Authorized Participant''). The Distributor will be responsible for 
transmitting the orders to the Funds. An Authorized Participant must be 
either: (a) A broker-dealer or other participant in the continuous net 
settlement system of the National Securities Clearing Corporation 
(``NSCC''), a clearing agency registered with the Commission, or (b) a 
participant in the Depository Trust Company (``DTC'', and such 
participant, ``DTC Participant''). Shares of each Fund generally will 
be sold in Creation Units in exchange for an in-kind deposit by the 
purchaser of a portfolio of securities designated by the Advisor or 
Subadvisor to correspond generally to the price and yield performance 
of the relevant Index (the ``Deposit Securities''), together with the 
deposit of a specified cash payment (``Balancing Amount''). The 
Balancing Amount is an amount equal to the difference between (a) the 
net asset value (``NAV'') per Creation Unit of a Fund and (b) the total 
aggregate market value per Creation Unit of the Deposit Securities.\8\ 
Each Fund may permit a purchaser of Creation Units to substitute cash 
in lieu of depositing some or all of the Deposit Securities if the 
Advisor or Sub-Advisor believes such method would reduce the Fund's 
transaction costs or enhance the Fund's operating efficiency.\9\
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    \8\ Each Fund will sell and redeem Creation Units only on a 
``Business Day'' which is defined as any day that the New York Stock 
Exchange, the Listing Exchange (defined below), and the custodian of 
the Fund are open for business, and includes any day that a Fund is 
required to be open under section 22(e) of the Act. Each Business 
Day, prior to the opening of trading on the Listing Exchange 
(defined below), the list of names and amount of each security 
constituting the current Deposit Securities and the Balancing Amount 
will be made available. Any national securities exchange (as defined 
in section 2(a)(26) of the Act) (``Exchange'') on which Shares are 
listed (``Listing Exchange'') will disseminate, every 15 seconds 
during its regular trading hours, through the facilities of the 
Consolidated Tape Association, an amount per individual Share 
representing the sum of the estimated Balancing Amount and the 
current value of the Deposit Securities.
    \9\ Applicants state that in some circumstances or in certain 
countries, it may not be practicable or convenient, or permissible 
under the laws of certain countries or the regulations of certain 
foreign stock exchanges, for an International Fund to operate 
exclusively on an ``in-kind'' basis. Applicants also note that when 
a substantial rebalancing of a Fund's portfolio is required, the 
Advisor or a Subadvisor might prefer to receive cash rather than 
stocks so that the Fund may avoid transaction costs involved in 
liquidating part of its portfolio to achieve the rebalancing.
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    8. An investor purchasing a Creation Unit from a Fund will be 
charged a fee (``Transaction Fee'') to prevent the dilution of the 
interests of the remaining shareholders resulting from costs in 
connection with the purchase or redemption of Creation Units.\10\ The 
maximum Transaction Fees relevant to each Fund and the method of 
calculating such Transaction Fees will be disclosed in the Prospectus 
or statement of additional information (``SAI'') of such Fund. The 
Distributor also will be responsible for delivering the Fund's 
Prospectus to those persons purchasing Creation Units, and for 
maintaining records of both the orders placed with it and the 
confirmations of acceptance furnished by it. In addition, the 
Distributor will maintain a record of the instructions given to the 
applicable Fund to implement the delivery of its Shares.
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    \10\ 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 cover the cost 
of purchasing such Deposit Securities, including operational 
processing and brokerage costs, and part or all of the spread 
between the expected bid and the offer side of the market relating 
to such Deposit Securities.
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    9. Purchasers of Shares in Creation Units may hold such Shares or 
may sell such Shares into the secondary market. Shares of the Funds 
will be listed and traded on an Exchange. It is expected that one or 
more member firms of a Listing Exchange will be designated to act as a 
specialist (``Specialist'') or a market maker (``Market Maker'') and 
maintain a market for Shares trading on the Listing Exchange. Prices of 
Shares trading on an Exchange will be based on the current bid/offer 
market. Shares sold in the secondary market will be subject to 
customary brokerage commissions and charges.
    10. Applicants expect that purchasers of Creation Units will 
include institutional investors and arbitrageurs (which could include 
institutional investors). A Specialist or Market Maker, in providing a 
fair and orderly secondary market for the Shares, also may purchase 
Creation Units for use in its market-making activities. Applicants 
expect that secondary market purchasers of Shares will include both 
institutional investors and retail investors.\11\ Applicants expect 
that the price at which Shares trade will be disciplined by arbitrage 
opportunities created by the option to continually purchase or redeem 
Creation Units at their NAV, which should ensure that Shares will not 
trade at a material discount or premium in relation to their NAV.
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    \11\ Shares will be registered in book-entry form only. DTC or 
its nominee will be the registered owner of all outstanding Shares. 
DTC or DTC Participants will maintain records reflecting beneficial 
owners of Shares.
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    11. Shares will not be individually redeemable, and owners of 
Shares may

[[Page 9445]]

acquire those Shares from a Fund, or tender such Shares for redemption 
to the Fund, in Creation Units only. To redeem, an investor will have 
to accumulate enough Shares to constitute a Creation Unit. Redemption 
orders must be placed by or through an Authorized Participant. An 
investor redeeming a Creation Unit generally will receive (a) Portfolio 
Holdings designated to be delivered for Creation Unit redemptions on 
the date that the request for redemption is submitted (``Fund 
Securities'') and (b) a ``Cash Redemption Payment,'' consisting of an 
amount calculated in the same manner as the Balancing Amount, although 
the actual amount of the Cash Redemption Payment may differ if the Fund 
Securities are not identical to the Deposit Securities on that day. An 
investor may receive the cash equivalent of a Fund Security in certain 
circumstances, such as if the investor is constrained from effecting 
transactions in the security by regulation or policy. A redeeming 
investor will pay a Transaction Fee, calculated in the same manner as a 
Transaction Fee payable in connection with purchases of Creation Units.
    12. Applicants state that in accepting Deposit Securities and 
satisfying redemptions with Fund Securities, the relevant Funds will 
comply with the federal securities laws, including that the Deposit 
Securities and Fund Securities are sold in transactions that would be 
exempt from registration under the Securities Act. As a general matter, 
the Deposit Securities and Fund Securities will correspond pro rata to 
the Portfolio Holdings held by each Fund, although Fund Securities 
received on redemption may not always be identical to Deposit 
Securities deposited in connection with the purchase of Creation Units 
for the same day.
    13. Neither the Trust nor any individual Fund will be marketed or 
otherwise held out as a traditional open-end investment company or a 
mutual fund. Instead, each Fund will be marketed as an ``ETF,'' an 
``investment company,'' a ``fund,'' or a ``trust.'' All marketing 
materials that describe the features or method of obtaining, buying or 
selling Creation Units or Shares, or refer to redeemability, will 
prominently disclose that Shares are not individually redeemable and 
that the owners of Shares may purchase or redeem Shares from the Fund 
in Creation Units only. The same approach will be followed in the SAI, 
shareholder reports and investor educational materials issued or 
circulated in connection with the Shares. The Funds will provide copies 
of their annual and semi-annual shareholder reports to DTC Participants 
for distribution to shareholders.

Applicants' Legal Analysis

    1. Applicants request an order under Section 6(c) of the Act 
granting 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; and under Sections 6(c) and 
17(b) of the Act granting 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 (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 provisions 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 
his proportionate share of the issuer's current net assets, or the cash 
equivalent. Because the Shares will not be individually redeemable, 
applicants request an order that would permit each Fund, as a series of 
an open-end management investment company, to issue Shares that are 
redeemable in Creation Units only. Applicants state that investors may 
purchase the Shares in Creation Units and redeem Creation Units from 
each Fund. Applicants state that because Creation Units may always be 
purchased and redeemed at NAV, the market price of the Shares should 
not vary substantially from their NAV.

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 the Shares will take 
place at negotiated prices, not at a current offering price described 
in a Fund's Prospectus, and not at a price based on NAV. Thus, 
purchases and sales of the 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 of 
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, and (c) ensure an orderly distribution of 
investment company shares by eliminating price competition from dealers 
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 
does not involve the Funds as parties and will not result in dilution 
of an investment in Shares, 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

[[Page 9446]]

discrimination or preferential treatment among purchasers. Finally, 
applicants contend that the proposed distribution system will be 
orderly because competitive forces will ensure that the difference 
between the market price of Shares and their NAV remains narrow.

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 
state that settlement of redemptions for the International Funds is 
contingent not only on the settlement cycle of the United States 
market, but also on currently practicable delivery cycles in local 
markets for underlying foreign securities held by the International 
Funds. Applicants state that local market delivery cycles for 
transferring Fund Securities to redeeming investors, coupled with local 
market holiday schedules, will, under certain circumstances, require a 
delivery process longer than seven calendar days for International 
Funds. Applicants request relief under Section 6(c) of the Act from 
Section 22(e) to allow the International Funds to pay redemption 
proceeds up to 12 calendar days after the tender of any Creation Units 
for redemption. Except as disclosed in the relevant International 
Fund's Prospectus and/or SAI, applicants expect that each International 
Fund will be able to deliver redemption proceeds within seven days.\12\ 
Applicants state that the SAI will disclose those local holidays (over 
the period of at least one year following the date thereof), if any, 
that are expected to prevent the delivery of redemption proceeds in 
seven calendar days and the maximum number of days needed to deliver 
the proceeds for each affected Fund.
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    \12\ Rule 15c6-1 under the Exchange Act requires that most 
securities transactions be settled within three business days of the 
trade. Applicants acknowledge that no relief obtained from the 
requirements of section 22(e) will affect any obligations applicants 
may have under rule 15c6-1.
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    8. Applicants state that Section 22(e) was designed to prevent 
unreasonable, undisclosed and unforeseen delays in the payment of 
redemption proceeds. Applicants assert that the requested relief will 
not lead to the problems that Section 22(e) was designed to prevent.

Section 12(d)(1)

    9. Section 12(d)(1)(A) of the Act, in relevant part, 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 the investment company's 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.
    10. Applicants request an exemption to permit management investment 
companies (``Acquiring Management Companies'') and unit investment 
trusts (``Acquiring Trusts'') registered under the Act that are not 
sponsored or advised by the Advisor or any entity controlling, 
controlled by, or under common control with the Advisor 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 Trust (collectively, 
``Acquiring Funds'') to acquire Shares of a Single-Tier Fund beyond the 
limits of Section 12(d)(1)(A). No Acquiring Fund will be in the same 
group of investment companies as defined in Section 12(d)(1)(G)(ii) of 
the Act as the Single-Tier Funds. In addition, applicants seek relief 
to permit a Single-Tier Fund or a broker-dealer (``Broker'') that is 
registered under the Exchange Act to sell Shares of such Single-Tier 
Fund to an Acquiring Fund in excess of the limits of Section 
12(d)(1)(B).
    11. Each Acquiring Management Company will be advised by an 
investment adviser within the meaning of Section 2(a)(20)(A) of the Act 
(the ``Acquiring Fund Advisor'') and may be sub-advised by one or more 
investment advisers within the meaning of Section 2(a)(20)(B) of the 
Act (each an ``Acquiring Fund Subadvisor''). Each Acquiring Fund 
Advisor and Acquiring Fund Subadvisor will be registered under the 
Advisers Act. Each Acquiring Trust will be sponsored by a sponsor 
(``Sponsor'').
    12. Applicants submit that the proposed conditions to the requested 
relief adequately address the concerns underlying the limits in Section 
12(d)(1), which include concerns about undue influence by a fund of 
funds over underlying funds, excessive layering of fees and overly 
complex fund structures. Applicants believe that the requested 
exemption is consistent with the public interest and the protection of 
investors.
    13. Applicants believe that neither the Acquiring Funds nor an 
Acquiring Fund Affiliate would be able to exert undue influence over 
the Single-Tier Funds.\13\ To limit the control that an Acquiring Fund 
may have over a Single-Tier Fund, applicants propose a condition 
prohibiting an Acquiring Fund Advisor or Sponsor, any person 
controlling, controlled by, or under common control with the Acquiring 
Fund Advisor or Sponsor, and any investment company and any issuer that 
would be an investment company but for Sections 3(c)(1) or 3(c)(7) of 
the Act that is advised or sponsored by the Acquiring Fund Advisor or 
Sponsor, or any person controlling, controlled by, or under common 
control with an Acquiring Fund Advisor or Sponsor (``Acquiring Fund's 
Advisory Group'') from controlling (individually or in the aggregate) a 
Single-Tier Fund within the meaning of Section 2(a)(9) of the Act. The 
same prohibition would apply to any Acquiring Fund's Subadvisor, any 
person controlling, controlled by or under common control with the 
Acquiring Fund's Subadvisor, and any investment company or issuer that 
would be an investment company but for Sections 3(c)(1) or 3(c)(7) of 
the Act (or portion of such investment company or issuer) advised or 
sponsored by the Acquiring Fund's Subadvisor or any person controlling, 
controlled by or under common control with the Acquiring Fund's 
Subadvisor (``Acquiring Fund's Sub-Advisory Group'').
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    \13\ An ``Acquiring Fund Affiliate'' is an Acquiring Fund 
Advisor, Acquiring Fund Subadvisor, Sponsor, promoter, or principal 
underwriter of an Acquiring Fund, and any person controlling, 
controlled by, or under common control with any of these entities. A 
``Single-Tier Fund Affiliate'' is the Advisor, Subadvisor, promoter, 
or principal underwriter of a Single-Tier Fund and any person 
controlling, controlled by or under common control with any of these 
entities.
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    14. Applicants propose other conditions to limit the potential for 
undue influence over the Single-Tier Funds, including that no Acquiring 
Fund or Acquiring Fund Affiliate (except to the extent it is acting in 
its capacity as an investment adviser to a Single-Tier Fund) will cause 
a Single-Tier Fund to purchase a security in any offering of securities 
during the existence of any underwriting or selling syndicate of which 
a principal underwriter is an Underwriting Affiliate (``Affiliated 
Underwriting''). An ``Underwriting Affiliate'' is a principal 
underwriter in any underwriting or

[[Page 9447]]

selling syndicate that is an officer, director, member of an advisory 
board, Acquiring Fund Advisor, Acquiring Fund Subadvisor, employee or 
Sponsor of an Acquiring Fund, or a person of which any such officer, 
director, member of an advisory board, Acquiring Fund Advisor, 
Acquiring Fund Subadvisor, employee, or Sponsor is an affiliated person 
(except that any person whose relationship to the Fund is covered by 
Section 10(f) of the Act is not an Underwriting Affiliate).
    15. Applicants do not believe that the proposed arrangement will 
involve excessive layering of fees. The board of directors or trustees 
of any Acquiring 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 find that the advisory fees charged to the Acquiring 
Management Company are based on services provided that will be in 
addition to, rather than duplicative of, services provided under the 
advisory contract(s) of any Single-Tier Fund in which the Acquiring 
Management Company may invest. In addition, except as provided in 
condition 12, an Acquiring Fund Advisor or a trustee (``Trustee'') or 
Sponsor of an Acquiring Trust, as applicable, will waive fees otherwise 
payable to it by the Acquiring Fund in an amount at least equal to any 
compensation (including fees received pursuant to any plan adopted by a 
Fund under rule 12b-1 under the Act) received by the Acquiring Fund 
Advisor or Trustee or Sponsor or an affiliated person of the Acquiring 
Fund Advisor, Trustee or Sponsor, from a Single-Tier Fund in connection 
with the investment by the Acquiring Fund in the Single-Tier Fund. 
Applicants also state that any sales charges or service fees charged 
with respect to shares of an Acquiring Fund will not exceed the limits 
applicable to a fund of funds set forth in Conduct Rule 2830 of the 
NASD.
    16. Applicants submit that the proposed arrangement will not create 
an overly complex fund structure. Applicants note that no Single-Tier 
Fund may 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. To ensure that 
Acquiring Funds comply with the terms and conditions of the requested 
relief from Section 12(d)(1), any Acquiring Fund that intends to invest 
in a Single-Tier Fund in reliance on the requested order will enter 
into a written agreement with such Single-Tier Fund (``Acquiring Fund 
Agreement'') requiring the Acquiring Fund to adhere to the terms and 
conditions of the requested order. The Acquiring Fund Agreement also 
will include an acknowledgement from the Acquiring Fund that it may 
rely on the requested order only to invest in the Single-Tier Funds and 
not in any other investment company, Initial Fund or FOF Fund.
    17. Applicants also note that a Single-Tier Fund may choose to 
reject any direct purchase of Creation Units by an Acquiring Fund. To 
the extent that an Acquiring Fund purchases Shares of a Single-Tier 
Fund in the secondary market, a Single-Tier Fund would still retain its 
right to reject any initial investment by an Acquiring Fund in excess 
of the limits in Section 12(d)(1)(A) by declining to enter into an 
Acquiring Fund Agreement with an Acquiring Fund.

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

    18. Section 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 (a) 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, (b) any person 5% or more of whose outstanding voting 
securities are directly or indirectly owned, controlled or held with 
the power to vote by the other person, and (c) 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.
    19. Applicants request an exemption from Section 17(a) of the Act 
pursuant to Sections 6(c) and 17(b) of the Act to permit persons to 
effectuate in-kind purchases and redemptions with a Fund when they are 
affiliated persons of the Fund or Second-Tier Affiliates solely by 
virtue of one or more of the following: (a) Holding 5% or more, or in 
excess of 25%, of the outstanding Shares of one or more Funds; (b) 
having an affiliation with a person with an ownership interest 
described in (a); or (c) holding 5% or more, or more than 25%, of the 
shares of one or more other registered investment companies (or series 
thereof) advised by the Advisor or an entity controlling, controlled by 
or under common control with the Advisor.
    20. Applicants believe that permitting the affiliated persons 
described above to effect in-kind purchases or redemptions of Creation 
Units would not give rise to the abuses that section 17(a) seeks to 
prevent. The deposit procedures for both in-kind purchases and in-kind 
redemptions of Creation Units will be the same for all purchases and 
redemptions. Deposit Securities and Fund Securities will be valued in 
the same manner as Portfolio Holdings. Therefore, applicants state that 
in-kind purchases and redemptions will afford no opportunity for the 
specified affiliated persons, or Second-Tier Affiliates, of a Fund to 
effect a transaction detrimental to other holders of Shares. Applicants 
also believe that in-kind purchases and redemptions will not result in 
self-dealing or overreaching of the Funds.
    21. Applicants also seek relief from Section 17(a) to permit a 
Single-Tier Fund that is an affiliated person of an Acquiring Fund to 
sell its Shares to and redeem its Shares from an Acquiring Fund, and to 
engage in the accompanying in-kind transactions with the Acquiring 
Fund.\14\ Applicants state that the terms of the transactions are fair 
and reasonable and do not involve overreaching. Applicants note that 
any consideration paid by an Acquiring Fund for the purchase or 
redemption of Shares directly from a Single-Tier Fund will be based on 
the NAV of the Single-Tier Fund.\15\ Applicants believe that any 
proposed transactions directly between the Single-Tier Funds and 
Acquiring Funds will be consistent with the policies of each Acquiring 
Fund. The purchase of Creation Units by an Acquiring Fund directly from 
a Single-Tier Fund will be accomplished in accordance with the 
investment restrictions of any such Acquiring Fund and will be 
consistent with the investment policies set forth in the Acquiring 
Fund's registration statement. The Acquiring Fund Agreement will 
require any Acquiring Fund that purchases Creation Units directly from 
a Single-Tier Fund to represent that the purchase of Creation Units 
from a

[[Page 9448]]

Single-Tier Fund by an Acquiring Fund will be accomplished in 
compliance with the investment restrictions of the Acquiring Fund and 
will be consistent with the investment policies set forth in the 
Acquiring Fund's registration statement.
---------------------------------------------------------------------------

    \14\ Applicants believe that an Acquiring Fund likely will 
purchase Shares of the Single-Tier Funds in the secondary market and 
will not purchase or redeem Creation Units directly from a Single-
Tier Fund.
    \15\ Applicants acknowledge that receipt of compensation by (a) 
an affiliated person of an Acquiring Fund, or an affiliated person 
of such person, for the purchase by the Acquiring Fund of Shares of 
a Single-Tier Fund or (b) an affiliated person of a Single-Tier 
Fund, or an affiliated person of such person, for the sale by the 
Single-Tier Fund of its Shares to an Acquiring Fund may be 
prohibited by section 17(e)(1) of the Act. The Acquiring Fund 
Agreement also will include this acknowledgment.
---------------------------------------------------------------------------

Applicants' Conditions

    Applicants agree that any order of granting the requested relief 
will be subject to the following conditions: \16\
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    \16\ See note 7, supra.
---------------------------------------------------------------------------

ETF Relief

    1. As long as the Trust operates in reliance on the requested 
order, the Shares of each Fund will be listed on an Exchange.
    2. Neither the Trust nor any Fund will be advertised or marketed as 
an open-end investment company or a mutual fund. Each Fund's Prospectus 
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 and tender those Shares for redemption to the Fund 
in Creation Units only. Any advertising material that describes the 
purchase or sale of Creation Units or refers to redeemability will 
prominently disclose that Shares are not individually redeemable, and 
that owners of Shares may acquire those Shares from the Fund and tender 
those Shares for redemption to the Fund in Creation Units only.
    3. The Website, which will be publicly accessible at no charge, 
will contain the following information, on a per Share basis, for each 
Fund: (a) The prior Business Day's NAV and the mid-point of the bid-ask 
spread at the time of the calculation of NAV (``Bid/Ask Price''), and a 
calculation of the premium or discount of the Bid/Ask Price at the time 
of calculation of the NAV against such NAV; and (b) data in chart 
format displaying the frequency distribution of discounts and premiums 
of the daily Bid/Ask Price against the NAV, within appropriate ranges, 
for each of the four previous calendar quarters.
    4. The Prospectus and annual report for each Fund also will 
include: (a) the information listed in condition 3(b), (i) in the case 
of the Fund's Prospectus, for the most recently completed year (and the 
most recently completed quarter or quarters, as applicable) and (ii) in 
the case of the annual report, for the immediately preceding five 
years, as applicable; and (b) the following data, calculated on a per 
Share basis for one, five and ten year periods (or life of the Fund): 
(i) The cumulative total return and the average annual total return 
based on NAV and Bid/Ask Price, and (ii) the cumulative total return of 
the relevant Index.
    5. Each Fund's Prospectus will clearly disclose that, for purposes 
of the Act, Shares are issued by the Fund, which is a registered 
investment company, and that the acquisition of Shares by investment 
companies is subject to the restrictions of Section 12(d)(1) of the 
Act. In addition, the Prospectus for each Single-Tier Fund will 
disclose that it has received an exemptive order that permits 
registered investment companies to invest in such Single-Tier Fund 
beyond the limits in Section 12(d)(1), subject to certain terms and 
conditions, including that the registered investment company enter into 
an Acquiring Fund Agreement with the Single-Tier Fund regarding the 
terms of the investment.
    6. The requested ETF Relief will expire on the effective date of 
any Commission rule under the Act that provides relief permitting the 
operation of index-based exchange-traded funds.

Section 12(d)(1) Relief

    7. The members of an Acquiring Fund's Advisory Group will not 
control (individually or in the aggregate) a Single-Tier Fund within 
the meaning of Section 2(a)(9) of the Act. The members of an Acquiring 
Fund's Sub-Advisory Group will not control (individually or in the 
aggregate) a Single-Tier Fund within the meaning of Section 2(a)(9) of 
the Act. If, as a result of a decrease in the outstanding Shares of a 
Single-Tier Fund, an Acquiring Fund's Advisory Group or an Acquiring 
Fund's Sub-Advisory Group, each in the aggregate, becomes a holder of 
more than 25% of the outstanding Shares of a Single-Tier Fund, it will 
vote its Shares in the same proportion as the vote of all other holders 
of the Shares. This condition will not apply to the Acquiring Fund's 
Sub-Advisory Group with respect to a Single-Tier Fund for which the 
Acquiring Fund's Subadvisor or a person controlling, controlled by, or 
under common control with the Acquiring Fund's Subadvisor acts as the 
investment adviser within the meaning of Section 2(a)(20)(A) of the 
Act.
    8. No Acquiring Fund or Acquiring Fund Affiliate will cause any 
existing or potential investment by the Acquiring Fund in a Single-Tier 
Fund to influence the terms of any services or transactions between an 
Acquiring Fund or an Acquiring Fund Affiliate and the Single-Tier Fund 
or the Single-Tier Fund Affiliate.
    9. The board of directors or trustees of an Acquiring Management 
Company, including a majority of the disinterested directors or 
trustees, will adopt procedures reasonably designed to ensure that the 
Acquiring Fund Advisor and any Acquiring Fund Subadvisor are conducting 
the investment program of the Acquiring Management Company without 
taking into account any consideration received by the Acquiring 
Management Company or an Acquiring Fund Affiliate from a Single-Tier 
Fund or a Single-Tier Fund Affiliate in connection with any services or 
transactions.
    10. No Acquiring Fund or Acquiring Fund Affiliate (except to the 
extent it is acting in its capacity as an investment adviser to a 
Single-Tier Fund) will cause a Single-Tier Fund to purchase a security 
in any Affiliated Underwriting.
    11. Before investing in the Shares of a Single-Tier Fund in excess 
of the limits in Section 12(d)(1)(A), each Acquiring Fund and such 
Single-Tier Fund will execute an Acquiring Fund Agreement stating, 
without limitation, that their boards of directors or trustees and 
their investment advisers or Sponsors or Trustees, 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 Single-Tier Fund in excess of the limit in Section 
12(d)(1)(A)(i), an Acquiring Fund will notify such Single-Tier Fund of 
the investment. At such time, the Acquiring Fund will also transmit to 
such Single-Tier Fund a list of names of each Acquiring Fund Affiliate 
and Underwriting Affiliate. The Acquiring Fund will notify the Single-
Tier Fund of any changes to the list of names as soon as reasonably 
practicable after a change occurs. The Single-Tier Fund and the 
Acquiring Fund will maintain and preserve a copy of the order, the 
Acquiring Fund Agreement, and the list of names 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.
    12. The Acquiring Fund Advisor, Trustee or Sponsor, as applicable, 
will waive fees otherwise payable to it by the Acquiring Fund in an 
amount at least equal to any compensation (including fees received 
under any plan adopted by a Fund under rule 12b-1 under the Act) 
received from a Single-Tier Fund by the Acquiring Fund Advisor, Trustee 
or Sponsor, or an affiliated person of the Acquiring Fund Advisor, 
Trustee or Sponsor, other than any advisory fees paid to the Acquiring 
Fund Advisor, Trustee or Sponsor, or its affiliated person by the 
Single-Tier Fund, in connection with the investment by the Acquiring 
Fund in the Single-Tier Fund.

[[Page 9449]]

Any Acquiring Fund Subadvisor will waive fees otherwise payable to the 
Acquiring Fund Subadvisor, directly or indirectly, by the Acquiring 
Management Company in an amount at least equal to any compensation 
received from a Single-Tier Fund by the Acquiring Fund Subadvisor, or 
an affiliated person of the Acquiring Fund Subadvisor, other than any 
advisory fees paid to the Acquiring Fund Subadvisor or its affiliated 
person by a Single-Tier Fund, in connection with any investment by the 
Acquiring Management Company in such Single-Tier Fund made at the 
direction of the Acquiring Fund Subadvisor. In the event that the 
Acquiring Fund Subadvisor waives fees, the benefit of the waiver will 
be passed through to the Acquiring Management Company.
    13. Any sales charges and/or service fees charged with respect to 
shares of an Acquiring Fund will not exceed the limits applicable to a 
fund of funds as set forth in NASD Conduct Rule 2830.
    14. Once an investment by an Acquiring Fund in the securities of a 
Single-Tier Fund exceeds the limit in Section 12(d)(1)(A)(i) of the 
Act, the board of directors or trustees of a Fund (``Board''), 
including a majority of the directors or trustees that are not 
``interested persons'' within the meaning of Section 2(a)(19) of the 
Act (``independent trustees''), will determine that any consideration 
paid by such Single-Tier Fund to an Acquiring Fund or Acquiring Fund 
Affiliate in connection with any services or transactions: (a) Is fair 
and reasonable in relation to the nature and quality of the services 
and benefits received by such Single-Tier Fund; (b) is within the range 
of consideration that such Single-Tier Fund would be required to pay to 
another unaffiliated entity in connection with the same services or 
transactions; and (c) 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 Single-Tier Fund and its investment 
adviser(s), or any person controlling, controlled by, or under common 
control with such investment adviser.
    15. The Board, including a majority of the independent trustees, 
will adopt procedures reasonably designed to monitor any purchases of 
securities by a Single-Tier Fund in an Affiliated Underwriting once an 
investment by an Acquiring Fund in the securities of such Single-Tier 
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 periodically, but no less frequently than 
annually, to determine whether the purchases were influenced by the 
investment by the Acquiring Fund in the Single-Tier Fund. The Board 
will consider, among other things: (a) Whether the purchases were 
consistent with the investment objectives and policies of the Single-
Tier Fund; (b) 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 (c) whether the amount of 
securities purchased by the Single-Tier 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 
interests of shareholders of the Single-Tier Fund.
    16. Each Single-Tier 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 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 an Acquiring Fund in the Shares of 
the Single-Tier 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.
    17. Before approving any advisory contract under Section 15 of the 
Act, the board of directors or trustees of each Acquiring Management 
Company, including a majority of the independent 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 Single-Tier Fund in which the Acquiring Management Company may 
invest. These findings and their basis will be recorded fully in the 
minute books of the appropriate Acquiring Management Company.
    18. No Single-Tier Fund will acquire securities of any investment 
company or companies relying on Sections 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.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-4602 Filed 3-3-09; 8:45 am]

BILLING CODE 8011-01-P