Document ID: SEC-2017-1534-0001
Agency: sec
Document Type: Notice
Title: Applications: Innovator ETFS Trust and Innovator Capital Management, LLC
Posted Date: 2017-09-15T04:00Z

[Federal Register Volume 82, Number 178 (Friday, September 15, 2017)]
[Notices]
[Pages 43439-43440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19577]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32813; 812-14780]

Innovator ETFS Trust and Innovator Capital Management, LLC

September 11, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 15(a) of 
the Act and rule 18f-2 under the Act. The requested exemption would 
permit an investment adviser to hire and replace certain subadvisers 
without shareholder approval.

Applicants: Innovator ETFS Trust (the ``Trust''), a Delaware statutory 
trust registered under the Act as an open-end management investment 
company, and Innovator Capital Management, LLC, a Delaware limited 
liability company registered as an investment adviser under the 
Investment Advisers Act of 1940 (the ``Adviser'' or ``Innovator'' and, 
collectively with the Trust, the ``Applicants'').

Filing Dates: The application was filed on June 7, 2017 and amended on 
September 8, 2017.

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 October 5, 2017 and should be accompanied by proof of service 
on the Applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest,

[[Page 43440]]

any facts bearing upon the desirability of a hearing on the matter, the 
reason for the request, and the issues contested. Persons who wish to 
be notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES:  Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090. Applicants: H. Bruce Bond, 
Innovator Capital Management, LLC, 120 N. Hale Street, Suite 200, 
Wheaton, Illinois 60187.

FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel, 
at (202) 551-6990, or Andrea Ottomanelli Magovern, Acting Branch Chief, 
at (202) 551-6821 (Division of Investment Management, Chief Counsel's 
Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Summary of the Application

    1. The Adviser serves as the investment adviser to the Funds 
pursuant to investment advisory agreements with the Trust on behalf of 
each Fund (collectively, the ``Advisory Agreements'').\1\ The Adviser 
is responsible for the overall management of the Funds' business 
affairs and selecting investments according to the Funds' investment 
objectives, policies, and restrictions, subject to the authority of the 
board of trustees of the Trust (``Board''). The Advisory Agreements 
permit the Adviser, subject to the approval of the Board, to delegate 
to one or more unaffiliated subadvisers (each, a ``Subadviser'' and 
collectively, the ``Subadvisers'') the responsibility to provide the 
day-to-day portfolio investment management of each Fund, subject to the 
supervision and direction of the Adviser. The primary responsibility 
for managing the Funds will remain vested in the Adviser. The Adviser 
will hire, evaluate, allocate assets to and oversee the Subadvisers, 
including determining whether a Subadviser should be terminated, at all 
times subject to the authority of the Board.
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    \1\ Applicants request relief with respect to any existing or 
future series of the Trust and any other existing or future 
registered open-end management investment company or series thereof 
that: (a) Is advised by the Adviser or its successors, including any 
entity controlling, controlled by, or under common control with the 
Adviser or its successors (each, also an ``Adviser''); (b) uses the 
manager of managers structure described in the application; and (c) 
complies with the terms and conditions of the application (any such 
series, a ``Fund'' and collectively, the ``Funds''). For purposes of 
the requested order, ``successor'' is limited to an entity that 
results from a reorganization into another jurisdiction or a change 
in the type of business organization.
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    2. Applicants request an exemption to permit the Adviser, subject 
to Board approval, to hire certain Subadvisers pursuant to Subadvisory 
Agreements and materially amend existing Subadvisory Agreements without 
obtaining the shareholder approval required under section 15(a) of the 
Act and rule 18f-2 under the Act.\2\
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    \2\ The requested relief will not extend to any subadviser that 
is an affiliated person, as defined in section 2(a)(3) of the Act, 
of the Trust, a Fund or the Adviser, other than by reason of serving 
as a subadviser to one or more of the Funds.
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    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the 
application.\3\ Such terms and conditions provide for, among other 
safeguards, appropriate disclosure to Fund shareholders and 
notification about subadvisory changes and enhanced Board oversight to 
protect the interests of the Funds' shareholders.
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    \3\ Prior to May, 2017, Innovator Management LLC (``Innovator 
Management'') served as the Funds' investment adviser. (Innovator 
and Innovator Management are not affiliated persons of each other.) 
Innovator Management entered into an agreement with Innovator 
pursuant to which Innovator Management transferred the assets of its 
investment advisory business and related intellectual property to 
Innovator (the ``Transaction''). The closing of the Transaction (the 
``Closing'') occurred on May 9, 2017. The Commission previously 
granted relief to Innovator Management and the Trust that, other 
than the identity of the investment adviser, was identical in all 
material respects to that requested in the Application. Academy 
Funds Trust and Innovator Management LLC, Investment Company Act 
Release Nos. 31679 (June 17, 2015)(notice) and 31711 (July 9, 
2015)(order) (``Existing Order''). On May 5, 2017, the Commission 
staff provided oral no-action relief to Innovator and the Trust to 
rely on the Existing Order until the earlier of the receipt of any 
order granted by the Commission on the Application or 150 days from 
the date of the Closing.
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    4. Section 6(c) 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 the Act, or 
any rule thereunder, if such relief is necessary or appropriate in the 
public interest and consistent with the protection of investors and 
purposes fairly intended by the policy and provisions of the Act. 
Applicants believe that the requested relief meets this standard 
because, as further explained in the application, the Advisory 
Agreements will remain subject to shareholder approval, while the role 
of the Subadvisers is substantially similar to that of individual 
portfolio managers, so that requiring shareholder approval of 
Subadvisory Agreements would impose unnecessary delays and expenses on 
the Funds.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19577 Filed 9-14-17; 8:45 am]
 BILLING CODE 8011-01-P