80 FR 22245 - Voya Retirement Insurance and Annuity Company et al.;

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 76 (April 21, 2015)

Page Range		22245-22249
FR Document		2015-09067

Summary of Application: Applicants seek an order pursuant to section 26(c) of the 1940 Act, approving the substitution of shares issued by certain series of Voya Variable Portfolios, Inc. (the ``Replacement Funds'') for shares of certain registered investment companies currently held by subaccounts of the Accounts (the ``Existing Funds''), to support certain variable annuity contracts (collectively, the ``Contracts'') issued by the Companies.

Federal Register, Volume 80 Issue 76 (Tuesday, April 21, 2015)

[Federal Register Volume 80, Number 76 (Tuesday, April 21, 2015)]
[Notices]
[Pages 22245-22249]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-09067]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31552; File No. 812-14302]

Voya Retirement Insurance and Annuity Company et al.; Notice of
Application

April 15, 2015.

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

ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'' or ``Act'').

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Applicants: Voya Retirement Insurance and Annuity Company (``Voya
Retirement''), Voya Insurance and Annuity Company (``Voya Insurance''),
ReliaStar Life Insurance Company of New York (``ReliaStar NY''), and
Security Life of Denver Insurance Company (``Security Life'') (each a
``Company'' and together, the ``Companies''), Variable Annuity Account
B of Voya Retirement (``Voya Retirement B''), Variable Annuity Account
I of Voya Retirement (``Voya Retirement I''), Separate Account B of
Voya Insurance (``Voya Insurance B''), Separate Account EQ of Voya
Insurance (``Voya Insurance EQ''), ReliaStar Life Insurance Company of
New York Separate Account NY-B (``ReliaStar NY-B''), Security Life
Separate Account A1 (``Security Life A1''), Security Life Separate
Accounts S-A1 (``Security Life S-A1'') (each, an ``Account'' and

[[Page 22246]]

together, the ``Accounts'') and Voya Variable Portfolios, Inc. The
Companies, the Accounts, and Voya Variable Portfolios, Inc. are
collectively referred to herein as the ``Applicants.''
SUMMARY: Summary of Application: Applicants seek an order pursuant to
section 26(c) of the 1940 Act, approving the substitution of shares
issued by certain series of Voya Variable Portfolios, Inc. (the
``Replacement Funds'') for shares of certain registered investment
companies currently held by subaccounts of the Accounts (the ``Existing
Funds''), to support certain variable annuity contracts (collectively,
the ``Contracts'') issued by the Companies.

DATES:
Filing Date: The application was filed on April 29, 2014, and was
amended and restated October 27, 2014, February 23, 2015 and March 31,
2015.
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 Secretary of
the Commission and serving the 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 May 11, 2015 and should be accompanied by
proof of service on the Applicants in the form of an affidavit or, for
lawyers, a certificate of service. Pursuant to Rule 0-5 under the Act,
hearing requests should state the nature of the writer's interest, any
facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Commission: Brent Fields, Secretary, SEC, 100 F Street, NE.,
Washington, DC 20549-1090. Applicants: J. Neil McMurdie, Esquire,
Senior Counsel, Voya Financial Legal Services, One Orange Way, Windsor,
CT 06095.

FOR FURTHER INFORMATION CONTACT: Rochelle Kauffman Plesset, Senior
Counsel, at (202) 551-6840, or Nadya Roytblat, Assistant Chief Counsel
at (202) 551-0825 (Division of Investment Management, Chief Counsel's
Office).

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

Applicants' Representations

1. Voya Retirement is the depositor of Voya Retirement B and Voya
Retirement I. Voya Insurance is the depositor of Voya Insurance B and
Voya Insurance EQ. ReliaStar NY is the depositor of ReliaStar NY-B.
Security Life is the depositor of Security Life A1 and Security Life S-
A1. Each Company is an indirect, wholly-owned subsidiary of Voya
Financial, Inc.\1\
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\1\ Prior to September 1, 2014, Voya Retirement was known as ING
Life Insurance and Annuity Company and Voya Insurance was known as
ING USA Annuity and Life Insurance Company. Prior to April 7, 2014,
Voya Financial, Inc. was known as ING U.S. Inc.
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2. Each Account is a ``separate account'' as defined by Rule 0-1(e)
under the 1940 Act and each is registered under the 1940 Act as a unit
investment trust. Each of the respective Accounts is used by the
Company for which it is a part to support the Contracts that it issues.
Each Account is divided into subaccounts, each of which invests
exclusively in shares of an Existing Fund or another registered open-
end management investment company. The application sets forth the
registration statement file numbers for the Contracts and the Accounts.
3. The Contracts are individual variable annuity contracts. Each of
the prospectuses for the Contracts discloses that the issuing Company
reserves the right, subject to Commission approval and compliance with
applicable law, to substitute shares of another registered open-end
management investment company for shares of a registered open-end
management investment company held by a subaccount of an Account
whenever the Company, in its judgment, determines that the investment
in the registered open-end management investment company no longer
suits the purpose of the Contract.
4. Voya Variable Portfolios is an open-end management investment
company of the series type that is registered with the Commission under
the 1940 Act (File No. 811-05173).\2\ Shares of the series are
registered under the Securities Act of 1933 (File No. 333-05173).
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\2\ Effective May 1, 2014 Voya Variable Portfolios changed its
name from ING Variable Portfolios, Inc. The names of the Replacement
Funds were also changed as of this date to reflect the rebranding of
the investment company.
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5. Voya Investments LLC (``Voya Investments''), a registered
investment adviser, has overall responsibility for the management of
each Replacement Fund.\3\ Voya Investments delegates to a sub-adviser
the responsibility for day-to-day management of the investments of each
Replacement Fund, subject to Voya Investment's oversight.
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\3\ Effective May 1, 2014, Voya Investments changed its name
from ING Investments, LLC.
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6. Applicants propose, as set forth below, to substitute shares of
the Replacement Funds for shares of the Existing Funds
(``Substitutions''):

7. Applicants state that the investment objectives and investment
policies of each Replacement Fund are similar to the corresponding
Existing Fund, or each Replacement Fund's underlying portfolio
construction and investment results are similar to those of the
Existing Fund, and therefore the fundamental objectives, risk and
performance expectations of those Contract Owners with interests in
subaccounts of the Existing Funds will continue to be met after the
Substitutions.
8. The investment objectives of each Existing Fund and its
corresponding Replacement Fund are set out below. Additional
information for each Existing Fund and Replacement Fund, including
principal investment strategies, principal risks and comparative
performance history, can be found in the application.

[[Page 22247]]

------------------------------------------------------------------------
Existing fund Replacement fund
------------------------------------------------------------------------
ClearBridge Variable Large Cap Value Voya Russell Large Cap Value
Portfolio seeks long-term growth of Index Portfolio seeks
capital as its primary investment investment results (before
objective. Current income is a fees and expenses) that
secondary objective. correspond to the total return
(which includes capital
appreciation and income) of
the Russell Top 200 Value
Index.
Fidelity VIP Equity-Income Portfolio Voya Russell Large Cap Value
seeks reasonable income. The fund will Index Portfolio seeks
also consider the potential for investment results (before
capital appreciation. The fund's goal fees and expenses) that
is to achieve a yield which exceeds correspond to the total return
the composite yield on the securities (which includes capital
comprising the S&P 500 Index. appreciation and income) of
the Russell Top 200 Value
Index.
Invesco VI Core Equity Fund seeks long- Voya Russell Large Cap Index
term growth of capital. Portfolio seeks investment
results (before fees and
expenses) that correspond to
the total return (which
includes capital appreciation
and income) of the Russell Top
200 Index.
Invesco VI American Franchise Fund Voya Russell Large Cap Growth
seeks capital growth.. Index Portfolio seeks
investment results (before
fees and expenses) that
correspond to the total return
(which includes capital
appreciation and income) of
the Russell Top 200 Growth
Index.
Pioneer Equity Income VCT Portfolio Voya Russell Large Cap Value
seeks current income and long-term Index Portfolio seeks
growth of capital from a portfolio investment results (before
consisting primarily of income fees and expenses) that
producing equity securities of U.S. correspond to the total return
corporations. (which includes capital
appreciation and income) of
the Russell Top 200 Value
Index.
------------------------------------------------------------------------

9. Applicants state that at the time of the Substitutions the
overall fees and expenses of the Replacement Funds will be less than
those assessed by the Existing Funds and that for two years following
the effective date of the Substitutions (``Effective Date''), the net
annual expenses of each of the Replacement Funds will not exceed the
net annual expenses of each corresponding Existing Fund. The
application sets forth the fees and expenses of each Existing Fund and
its corresponding Replacement Fund in greater detail.
10. Applicants state that by substituting unaffiliated funds with
funds that are advised and subadvised by affiliates of the Companies,
the principal purposes of the Substitutions would, among other things:
(1) Help implement the Companies' overall business plan to make the
Contracts more competitive (and thus more attractive to customers) and
more efficient to administer and oversee; (2) provide the Companies
with more influence over the administrative and management aspects of
the funds offered through the Contracts, thereby reducing costs and
customer confusion; (3) allow each Company the ability to react more
quickly to the changes and problems it encounters in its oversight of
the funds which are available in its Contracts; (4) allow the Companies
to reduce costs by consolidating the administration of the Replacement
Funds with its other funds; and (5) allow the Companies to respond to
expense, performance and management matters that they have identified
in their due diligence review of the funds available through the
Contracts.
11. Applicants represent that as of the Effective Date shares of
the Existing Funds will be redeemed for cash. The Companies, on behalf
of each Existing Fund subaccount of each relevant Account, will
simultaneously place a redemption request with each Existing Fund and a
purchase order with the corresponding Replacement Fund so that the
purchase of Replacement Fund shares will be for the exact amount of the
redemption proceeds. Thus, Contract values will remain fully invested
at all times. The proceeds of such redemptions will then be used to
purchase the appropriate number of shares of the applicable Replacement
Fund.
12. The Substitutions will take place at relative net asset value
(in accordance with Rule 22c-1 under the 1940 Act) with no change in
the amount of any Affected Contract Owner's contract value, cash value,
accumulation value, account value or death benefit or in dollar value
of his or her investment in the applicable Accounts. No brokerage
commissions, fees or other remuneration will be paid by either the
Existing Funds or the Replacement Funds or by Affected Contract Owners
in connection with the Substitutions.
13. The Affected Contract Owners will not incur any fees or charges
as a result of the Substitutions nor will their rights or the
Companies' obligations under the Contracts be altered in any way. The
Companies or their affiliates will pay all expenses and transaction
costs of the Substitutions, including legal and accounting expenses,
any applicable brokerage expenses, and other fees and expenses. The
Substitutions will not cause the Contract fees and charges currently
being paid by Affected Contract Owners to be greater after the
Substitutions than before the Substitutions. Moreover, the
Substitutions will not impose any tax liability on Affected Contract
Owners.
14. As described in the application, after notification of the
Substitution and for 30 days after the Effective Date, Affected
Contract Owners may reallocate the subaccount value of an Existing Fund
to any other investment option available under their Contract without
incurring any administrative costs or transfer charges.
15. All Affected Contract Owners affected by the Substitutions were
notified of this application by means of supplements to the Contract
prospectuses shortly after the date the application was first filed
with the Commission. Among other information, the supplements informed
Affected Contract Owners that beginning on the date of the supplements,
the Companies will not exercise any rights reserved by them under the
Contracts to impose restrictions or fees on transfers from an Existing
Fund (other than restrictions related to frequent or disruptive
transfers) until at least 30 days after the Effective Date.
16. Following the date the order requested by this application is
issued, but at least 30 days before the Effective Date, Affected
Contract Owners will receive a ``Pre-Substitution Notice,'' consisting
of a second supplement to the Contract prospectuses setting forth the
intended Effective Date and advising Affected Contract Owners of their
right, if they so choose, at any time during the period beginning 30
days before the Effective Date through at least 30 days

[[Page 22248]]

following the Effective Date, to reallocate or withdraw accumulated
value in the Existing Fund subaccounts under their Contracts or
otherwise terminate their interest therein in accordance with the terms
and conditions of their Contracts. If Affected Contract Owners
reallocate account value during this 60 day period, there will be no
charge for the reallocation of accumulated value from the Existing Fund
subaccounts and the reallocation will not count as a transfer when
imposing any applicable restriction or limit under the Contract on
transfers. Additionally, all Affected Contract Owners will be sent
prospectuses of the applicable Replacement Funds at least 30 days
before the Effective Date.
17. Within five (5) business days after the Effective Date,
Affected Contract Owners will be sent a written confirmation, which
will include confirmation that the Substitutions were carried out as
previously notified, a restatement of the information set forth in the
Pre-Substitution Notice and information showing how the allocation of
the Affected Contract Owner's account value before and immediately
following the Substitution has changed as a result of the
Substitutions.

Legal Analysis

1. Applicants request that the Commission issue an order pursuant
to section 26(c) of the 1940 Act approving the Substitutions. Section
26(c) requires the depositor of a registered unit investment trust
holding the securities of a single issuer to obtain Commission approval
before substituting the securities held by the trust. Section 26(c)
requires the Commission to issue such an order if the evidence
establishes that the substitution is consistent with the protection of
investors and the purposes fairly intended by the policy and provisions
of the 1940 Act.
2. Applicants submit that the terms and conditions of the
Substitutions meet the standards set forth in section 26(c) and assert
that the replacement of an Existing Fund with the corresponding
Replacement Fund is consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the l940 Act.
As described in the application, as of the Effective Date of the
Substitution, the overall fees and expenses of each Replacement Fund
will be less than those of the corresponding Existing Fund and for two
years following the Effective Date, the net annual expenses of each
Replacement Fund will not exceed the net annual expenses of the
corresponding Existing Fund. Applicants further asset that each
Replacement Fund has similar investment objectives and investment
strategies as the corresponding Existing Fund, or each Replacement
Fund's underlying portfolio construction and investment results are
similar to those of the corresponding Existing Fund. Accordingly,
Applicants believe that the fundamental investment objectives, risk and
performance expectations of the Affected Contract Owners will continue
to be met after the Substitutions.
3. Applicants also maintain that Affected Contract Owners will be
better served by the Substitutions. Applicants anticipate that the
substitution of an Existing Fund with the corresponding Replacement
Fund will result in a Contract that is administered and managed more
efficiently, and one that is more competitive with other variable
products. The rights of Affected Contract Owners and the obligations of
the Companies under the Contracts will not be altered by the
Substitutions. Affected Contract Owners will not incur any additional
tax liability or any additional fees and expenses as a result of the
Substitutions.
4. Each of the prospectuses for the Contracts discloses that the
issuing Company reserves the right, subject to Commission approval and
compliance with applicable law, to substitute shares of another
registered open-end management investment company for shares of an
open-end management investment company held by a subaccount of an
Account.
5. Applicants also assert that the Substitutions do not entail any
of the abuses that section 26(c) was designed to prevent. Unlike a
traditional unit investment trust where a depositor could only
substitute an investment security in a manner which permanently
affected all the investors in the trust, the Contracts provide each
Contract Owner with the right to exercise his or her own judgment and
transfer account values into other subaccounts. Moreover, the Contracts
will offer Affected Contract Owners the opportunity to transfer amounts
out of the affected subaccounts into any of the remaining subaccounts
without cost or other disadvantage. The Substitution, therefore, will
not result in the type of costly forced redemptions that section 26(c)
was designed to prevent. Applicants also maintain that the
Substitutions are unlike the type of substitutions which section 26(c)
was designed to prevent in that by purchasing a Contract, Contract
Owners select much more than a particular registered management open-
end investment company in which to invest their account values. They
also select the specific type of death benefit and other optional
benefits as well as other rights and privileges set forth in the
Contracts that will not be changed as a result of the Substitutions.

Applicants' Conditions

Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:
1. The Substitutions will not be effected unless the Companies
determine that: (a) The Contracts allow the substitution of shares of
registered open-end investment companies in the manner contemplated by
the application; (b) the Substitutions can be consummated as described
in the application under applicable insurance laws; and (c) any
regulatory requirements in each jurisdiction where the Contracts are
qualified for sale have been complied with to the extent necessary to
complete the Substitutions.
2. The Companies or their affiliates will pay all expenses and
transaction costs of the Substitutions, including legal and accounting
expenses, any applicable brokerage expenses and other fees and
expenses. No fees or charges will be assessed to the Contract Owners to
effect the Substitutions.
3. The Substitutions will be effected at the relative net asset
values of the respective shares in conformity with section 22(c) of the
1940 Act and Rule 22c-1 thereunder without the imposition of any
transfer or similar charges by Applicants. The Substitutions will be
effected without change in the amount or value of any Contracts held by
Affected Contract Owners.
4. The Substitutions will in no way alter the tax treatment of
Affected Contract Owners in connection with their Contracts, and no tax
liability will arise for Affected Contract Owners as a result of the
Substitutions.
5. The rights or obligations of the Companies under the Contracts
of Affected Contract Owners will not be altered in any way. The
Substitutions will not adversely affect any riders under the Contracts.
6. Affected Contract Owners will be permitted to make at least one
transfer of Contract value from the subaccount investing in the
Existing Fund (before the Effective Date) or the Replacement Fund
(after the Effective Date) to any other available investment option
under the Contract without charge for a period beginning at least 30
days before the Effective Date through at least 30 days following the
Effective Date. Except as described in any market timing/short-term
trading provisions of the relevant

[[Page 22249]]

prospectus, the Company will not exercise any right it may have under
the Contract to impose restrictions on transfers between the
subaccounts under the Contracts, including limitations on the future
number of transfers, for a period beginning at least 30 days before the
Effective Date through at least 30 days following the Effective Date.
7. All Affected Contract Owners will be notified, at least 30 days
before the Effective Date about: (a) The intended substitution of
Existing Funds with the Replacement Funds; (b) the intended Effective
Date; and (c) information with respect to transfers as set forth in
Condition 6 above. In addition, the Companies will also deliver, at
least 30 days before the Effective Date a prospectus for each
applicable Replacement Fund.
8. Companies will deliver to each Affected Contract Owner within
five (5) business days of the Effective Date a written confirmation
which will include: (a) A confirmation that the Substitutions were
carried out as previously notified; (b) a restatement of the
information set forth in the Pre-Substitution Notice; and (c) before
and after account values.
9. After the Effective Date Applicants agree not to change a
Replacement Fund's sub-adviser without first (a) obtaining shareholder
approval of the sub-adviser change or (b) Voya Variable Portfolios Inc.
determining that it can continue to rely on its manager-of-managers
exemptive order.
10. For two years following the Effective Date the net annual
expenses of each Replacement Fund will not exceed the net annual
expenses of the corresponding Existing Fund as of the Fund's most
recent fiscal year. To achieve this limitation, the Replacement Fund's
investment adviser will waive fees or reimburse the Replacement Fund in
certain amounts to maintain expenses at or below the limit. Any
adjustments will be made at least on a quarterly basis. In addition,
the Companies will not increase the Contract fees and charges including
asset based charges such as mortality expense risk charges deducted
from the subaccounts that would otherwise be assessed under the terms
of the Contracts for a period of at least two years following the
Effective Date.

For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-09067 Filed 4-20-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices 22245

FINRA rules provide for the equitable III. Date of Effectiveness of the Washington, DC 20549 on official
allocation of reasonable dues, fees and Proposed Rule Change and Timing for business days between the hours of
other charges among members and Commission Action 10:00 a.m. and 3:00 p.m. Copies of such
issuers and other persons using any The foregoing rule change has become filing also will be available for
facility or system that FINRA operates effective pursuant to Section 19(b)(3)(A) inspection and copying at the principal
or controls. FINRA believes that the of the Act 8 and paragraph (f)(2) of Rule offices of the Exchange. All comments
proposed rule change to waive trade 19b–4 thereunder.9 At any time within received will be posted without change;
reporting fees under Rule 7710, as 60 days of the filing of the proposed rule the Commission does not edit personal
described herein, is appropriate in light change, the Commission summarily may identifying information from
of the ORF systems issue on March 24, temporarily suspend such rule change if submissions. You should submit only
2015. FINRA does not believe that it appears to the Commission that such information that you wish to make
members should incur fees for the action is necessary or appropriate in the available publicly. All submissions
corrective action they were required to public interest, for the protection of should refer to File Number SR–FINRA–
take following the ORF systems issue. investors, or otherwise in furtherance of 2015–007, and should be submitted on
FINRA believes that this limited waiver the purposes of the Act. If the or before May 12, 2015.
results in reasonable fees and financial Commission takes such action, the For the Commission, by the Division of
benefits that are equitably allocated. The Commission shall institute proceedings Trading and Markets, pursuant to delegated
financial benefit of the trade reporting to determine whether the proposed rule authority.10
fee waiver is available to all firms that should be approved or disapproved. Brent J. Fields,
reported to the ORF on March 24, 2015 IV. Solicitation of Comments Secretary.
and to all firms that reported trades with [FR Doc. 2015–09070 Filed 4–20–15; 8:45 am]
Interested persons are invited to
an execution date or original report date submit written data, views, and BILLING CODE 8011–01–P
of March 24, 2015, provided that such arguments concerning the foregoing,
reports were received by March 31, including whether the proposed rule
2015. The proposed rule change is SECURITIES AND EXCHANGE
change is consistent with the Act. COMMISSION
reasonable because the waiver of ORF Comments may be submitted by any of
trade reporting fees—and the financial the following methods: [Investment Company Act Release No.
benefit from such waiver—is of limited 31552; File No. 812–14302]
Electronic Comments
amount, duration and application, as
noted above. Finally, the proposed trade • Use the Commission’s Internet Voya Retirement Insurance and
reporting fee waiver does not unfairly comment form (http://www.sec.gov/ Annuity Company et al.; Notice of
discriminate between or among rules/sro.shtml); or Application
members in that the waiver is available • Send an email to rule-comments@
April 15, 2015.
to any such member that reported sec.gov. Please include File Number SR–
FINRA–2015–007 on the subject line. AGENCY: Securities and Exchange
transactions to the ORF on the relevant Commission (‘‘SEC’’ or ‘‘Commission’’).
dates. Paper Comments
ACTION: Notice of application for an
B. Self-Regulatory Organization’s • Send paper comments in triplicate order approving the substitution of
Statement on Burden on Competition to Brent J. Fields, Secretary, Securities certain securities pursuant to section
and Exchange Commission, 100 F Street 26(c) of the Investment Company Act of
FINRA does not believe that the NE., Washington, DC 20549–1090. 1940, as amended (the ‘‘1940 Act’’ or
proposed rule change will result in any All submissions should refer to File ‘‘Act’’).
burden on competition that is not Number SR–FINRA–2015–007. This file
necessary or appropriate in furtherance number should be included on the Applicants: Voya Retirement
of the purposes of the Act. FINRA subject line if email is used. To help the Insurance and Annuity Company
believes that the proposed rule change Commission process and review your (‘‘Voya Retirement’’), Voya Insurance
to waive the trade reporting fees is comments more efficiently, please use and Annuity Company (‘‘Voya
appropriate in light of the ORF systems only one method. The Commission will Insurance’’), ReliaStar Life Insurance
issue, which required members to take post all comments on the Commission’s Company of New York (‘‘ReliaStar
corrective action and make additional Internet Web site (http://www.sec.gov/ NY’’), and Security Life of Denver
submissions to the ORF. FINRA believes rules/sro.shtml). Copies of the Insurance Company (‘‘Security Life’’)
that the limited trade reporting fee submission, all subsequent (each a ‘‘Company’’ and together, the
waiver would not place an unreasonable amendments, all written statements ‘‘Companies’’), Variable Annuity
fee burden on members, nor confer an with respect to the proposed rule Account B of Voya Retirement (‘‘Voya
change that are filed with the Retirement B’’), Variable Annuity
uncompetitive benefit to members that
Commission, and all written Account I of Voya Retirement (‘‘Voya
have their trade reporting fees waived,
communications relating to the Retirement I’’), Separate Account B of
in that such waiver would be available
proposed rule change between the Voya Insurance (‘‘Voya Insurance B’’),
for a very limited period and the
Commission and any person, other than Separate Account EQ of Voya Insurance
financial impact of such a waiver would
those that may be withheld from the (‘‘Voya Insurance EQ’’), ReliaStar Life
be de minimis. Insurance Company of New York
public in accordance with the
tkelley on DSK3SPTVN1PROD with NOTICES

C. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be Separate Account NY–B (‘‘ReliaStar
Statement on Comments on the available for Web site viewing and NY–B’’), Security Life Separate Account
Proposed Rule Change Received From printing in the Commission’s Public A1 (‘‘Security Life A1’’), Security Life
Members, Participants, or Others Reference Room, 100 F Street NE., Separate Accounts S–A1 (‘‘Security Life
S–A1’’) (each, an ‘‘Account’’ and
Written comments were neither 8 15 U.S.C. 78s(b)(3)(A).
solicited nor received. 9 17 CFR 240.19b–4(f)(2). 10 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 19:31 Apr 20, 2015 Jkt 235001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 E:\FR\FM\21APN1.SGM 21APN1

Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices 22247

Existing fund Replacement fund

ClearBridge Variable Large Cap Value Portfolio seeks long-term growth Voya Russell Large Cap Value Index Portfolio seeks investment results
of capital as its primary investment objective. Current income is a (before fees and expenses) that correspond to the total return (which
secondary objective. includes capital appreciation and income) of the Russell Top 200
Value Index.
Fidelity VIP Equity-Income Portfolio seeks reasonable income. The Voya Russell Large Cap Value Index Portfolio seeks investment results
fund will also consider the potential for capital appreciation. The (before fees and expenses) that correspond to the total return (which
fund’s goal is to achieve a yield which exceeds the composite yield includes capital appreciation and income) of the Russell Top 200
on the securities comprising the S&P 500 Index. Value Index.
Invesco VI Core Equity Fund seeks long-term growth of capital ............ Voya Russell Large Cap Index Portfolio seeks investment results (be-
fore fees and expenses) that correspond to the total return (which in-
cludes capital appreciation and income) of the Russell Top 200
Index.
Invesco VI American Franchise Fund seeks capital growth. ................... Voya Russell Large Cap Growth Index Portfolio seeks investment re-
sults (before fees and expenses) that correspond to the total return
(which includes capital appreciation and income) of the Russell Top
200 Growth Index.
Pioneer Equity Income VCT Portfolio seeks current income and long- Voya Russell Large Cap Value Index Portfolio seeks investment results
term growth of capital from a portfolio consisting primarily of income (before fees and expenses) that correspond to the total return (which
producing equity securities of U.S. corporations. includes capital appreciation and income) of the Russell Top 200
Value Index.

9. Applicants state that at the time of 11. Applicants represent that as of the Contract fees and charges currently
the Substitutions the overall fees and Effective Date shares of the Existing being paid by Affected Contract Owners
expenses of the Replacement Funds will Funds will be redeemed for cash. The to be greater after the Substitutions than
be less than those assessed by the Companies, on behalf of each Existing before the Substitutions. Moreover, the
Existing Funds and that for two years Fund subaccount of each relevant Substitutions will not impose any tax
following the effective date of the Account, will simultaneously place a liability on Affected Contract Owners.
Substitutions (‘‘Effective Date’’), the net redemption request with each Existing 14. As described in the application,
annual expenses of each of the Fund and a purchase order with the after notification of the Substitution and
Replacement Funds will not exceed the corresponding Replacement Fund so for 30 days after the Effective Date,
net annual expenses of each that the purchase of Replacement Fund Affected Contract Owners may
corresponding Existing Fund. The shares will be for the exact amount of reallocate the subaccount value of an
application sets forth the fees and the redemption proceeds. Thus, Existing Fund to any other investment
expenses of each Existing Fund and its Contract values will remain fully option available under their Contract
corresponding Replacement Fund in invested at all times. The proceeds of without incurring any administrative
greater detail. such redemptions will then be used to costs or transfer charges.
10. Applicants state that by purchase the appropriate number of 15. All Affected Contract Owners
substituting unaffiliated funds with shares of the applicable Replacement affected by the Substitutions were
funds that are advised and subadvised Fund. notified of this application by means of
by affiliates of the Companies, the 12. The Substitutions will take place supplements to the Contract
principal purposes of the Substitutions at relative net asset value (in accordance prospectuses shortly after the date the
would, among other things: (1) Help with Rule 22c-1 under the 1940 Act) application was first filed with the
implement the Companies’ overall with no change in the amount of any Commission. Among other information,
business plan to make the Contracts Affected Contract Owner’s contract the supplements informed Affected
more competitive (and thus more value, cash value, accumulation value, Contract Owners that beginning on the
attractive to customers) and more account value or death benefit or in date of the supplements, the Companies
efficient to administer and oversee; (2) dollar value of his or her investment in will not exercise any rights reserved by
provide the Companies with more the applicable Accounts. No brokerage them under the Contracts to impose
influence over the administrative and commissions, fees or other restrictions or fees on transfers from an
management aspects of the funds remuneration will be paid by either the Existing Fund (other than restrictions
offered through the Contracts, thereby Existing Funds or the Replacement related to frequent or disruptive
reducing costs and customer confusion; Funds or by Affected Contract Owners transfers) until at least 30 days after the
(3) allow each Company the ability to in connection with the Substitutions. Effective Date.
react more quickly to the changes and 13. The Affected Contract Owners 16. Following the date the order
problems it encounters in its oversight will not incur any fees or charges as a requested by this application is issued,
of the funds which are available in its result of the Substitutions nor will their but at least 30 days before the Effective
Contracts; (4) allow the Companies to rights or the Companies’ obligations Date, Affected Contract Owners will
reduce costs by consolidating the under the Contracts be altered in any receive a ‘‘Pre-Substitution Notice,’’
tkelley on DSK3SPTVN1PROD with NOTICES

administration of the Replacement way. The Companies or their affiliates consisting of a second supplement to
Funds with its other funds; and (5) will pay all expenses and transaction the Contract prospectuses setting forth
allow the Companies to respond to costs of the Substitutions, including the intended Effective Date and advising
expense, performance and management legal and accounting expenses, any Affected Contract Owners of their right,
matters that they have identified in their applicable brokerage expenses, and if they so choose, at any time during the
due diligence review of the funds other fees and expenses. The period beginning 30 days before the
available through the Contracts. Substitutions will not cause the Effective Date through at least 30 days

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22248 Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices

following the Effective Date, to Replacement Fund has similar the specific type of death benefit and
reallocate or withdraw accumulated investment objectives and investment other optional benefits as well as other
value in the Existing Fund subaccounts strategies as the corresponding Existing rights and privileges set forth in the
under their Contracts or otherwise Fund, or each Replacement Fund’s Contracts that will not be changed as a
terminate their interest therein in underlying portfolio construction and result of the Substitutions.
accordance with the terms and investment results are similar to those of
Applicants’ Conditions
conditions of their Contracts. If Affected the corresponding Existing Fund.
Contract Owners reallocate account Accordingly, Applicants believe that the Applicants agree that any order of the
value during this 60 day period, there fundamental investment objectives, risk Commission granting the requested
will be no charge for the reallocation of and performance expectations of the relief will be subject to the following
accumulated value from the Existing Affected Contract Owners will continue conditions:
Fund subaccounts and the reallocation to be met after the Substitutions. 1. The Substitutions will not be
will not count as a transfer when 3. Applicants also maintain that effected unless the Companies
imposing any applicable restriction or Affected Contract Owners will be better determine that: (a) The Contracts allow
limit under the Contract on transfers. served by the Substitutions. Applicants the substitution of shares of registered
Additionally, all Affected Contract anticipate that the substitution of an open-end investment companies in the
Owners will be sent prospectuses of the Existing Fund with the corresponding manner contemplated by the
applicable Replacement Funds at least Replacement Fund will result in a application; (b) the Substitutions can be
30 days before the Effective Date. Contract that is administered and consummated as described in the
17. Within five (5) business days after managed more efficiently, and one that application under applicable insurance
the Effective Date, Affected Contract is more competitive with other variable laws; and (c) any regulatory
Owners will be sent a written products. The rights of Affected requirements in each jurisdiction where
confirmation, which will include Contract Owners and the obligations of the Contracts are qualified for sale have
confirmation that the Substitutions were the Companies under the Contracts will been complied with to the extent
carried out as previously notified, a not be altered by the Substitutions. necessary to complete the Substitutions.
restatement of the information set forth Affected Contract Owners will not incur 2. The Companies or their affiliates
in the Pre-Substitution Notice and any additional tax liability or any will pay all expenses and transaction
information showing how the allocation additional fees and expenses as a result costs of the Substitutions, including
of the Affected Contract Owner’s of the Substitutions. legal and accounting expenses, any
account value before and immediately 4. Each of the prospectuses for the applicable brokerage expenses and other
following the Substitution has changed Contracts discloses that the issuing fees and expenses. No fees or charges
as a result of the Substitutions. Company reserves the right, subject to will be assessed to the Contract Owners
Commission approval and compliance to effect the Substitutions.
Legal Analysis with applicable law, to substitute shares 3. The Substitutions will be effected
1. Applicants request that the of another registered open-end at the relative net asset values of the
Commission issue an order pursuant to management investment company for respective shares in conformity with
section 26(c) of the 1940 Act approving shares of an open-end management section 22(c) of the 1940 Act and Rule
the Substitutions. Section 26(c) requires investment company held by a 22c-1 thereunder without the
the depositor of a registered unit subaccount of an Account. imposition of any transfer or similar
investment trust holding the securities 5. Applicants also assert that the charges by Applicants. The
of a single issuer to obtain Commission Substitutions do not entail any of the Substitutions will be effected without
approval before substituting the abuses that section 26(c) was designed change in the amount or value of any
securities held by the trust. Section to prevent. Unlike a traditional unit Contracts held by Affected Contract
26(c) requires the Commission to issue investment trust where a depositor Owners.
such an order if the evidence establishes could only substitute an investment 4. The Substitutions will in no way
that the substitution is consistent with security in a manner which alter the tax treatment of Affected
the protection of investors and the permanently affected all the investors in Contract Owners in connection with
purposes fairly intended by the policy the trust, the Contracts provide each their Contracts, and no tax liability will
and provisions of the 1940 Act. Contract Owner with the right to arise for Affected Contract Owners as a
2. Applicants submit that the terms exercise his or her own judgment and result of the Substitutions.
and conditions of the Substitutions meet transfer account values into other 5. The rights or obligations of the
the standards set forth in section 26(c) subaccounts. Moreover, the Contracts Companies under the Contracts of
and assert that the replacement of an will offer Affected Contract Owners the Affected Contract Owners will not be
Existing Fund with the corresponding opportunity to transfer amounts out of altered in any way. The Substitutions
Replacement Fund is consistent with the affected subaccounts into any of the will not adversely affect any riders
the protection of investors and the remaining subaccounts without cost or under the Contracts.
purposes fairly intended by the policy other disadvantage. The Substitution, 6. Affected Contract Owners will be
and provisions of the l940 Act. As therefore, will not result in the type of permitted to make at least one transfer
described in the application, as of the costly forced redemptions that section of Contract value from the subaccount
Effective Date of the Substitution, the 26(c) was designed to prevent. investing in the Existing Fund (before
overall fees and expenses of each Applicants also maintain that the the Effective Date) or the Replacement
Replacement Fund will be less than Substitutions are unlike the type of Fund (after the Effective Date) to any
tkelley on DSK3SPTVN1PROD with NOTICES

those of the corresponding Existing substitutions which section 26(c) was other available investment option under
Fund and for two years following the designed to prevent in that by the Contract without charge for a period
Effective Date, the net annual expenses purchasing a Contract, Contract Owners beginning at least 30 days before the
of each Replacement Fund will not select much more than a particular Effective Date through at least 30 days
exceed the net annual expenses of the registered management open-end following the Effective Date. Except as
corresponding Existing Fund. investment company in which to invest described in any market timing/short-
Applicants further asset that each their account values. They also select term trading provisions of the relevant

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Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices 22249

prospectus, the Company will not SECURITIES AND EXCHANGE transfer agent to the Fund. U.S. Bank
exercise any right it may have under the COMMISSION National Association will act as the
Contract to impose restrictions on custodian to the Fund. The Exchange
[Release No. 34–74728; File No. SR–
transfers between the subaccounts states that the Adviser is not a broker-
NASDAQ–2015–013]
under the Contracts, including dealer, and is not affiliated with any
limitations on the future number of Self-Regulatory Organizations; The broker-dealer.7 The Exchange has made
transfers, for a period beginning at least NASDAQ Stock Market LLC; Order the following representations and
30 days before the Effective Date Approving a Proposed Rule Change To statements regarding the Fund.8
through at least 30 days following the List and Trade Shares of the Principal Investments
Effective Date. AlphaMark Actively Managed Small
7. All Affected Contract Owners will The Fund’s primary investment
Cap ETF of ETF Series Solutions
be notified, at least 30 days before the objective is to seek long-term growth of
Effective Date about: (a) The intended April 15, 2015. capital. The Fund will pursue its
substitution of Existing Funds with the objectives by investing primarily—i.e.,
I. Introduction at least 80% of its assets under normal
Replacement Funds; (b) the intended
Effective Date; and (c) information with On February 17, 2015, The NASDAQ market conditions 9—in a portfolio of
respect to transfers as set forth in Stock Market LLC (the ‘‘Exchange’’ or equity securities of small cap companies
Condition 6 above. In addition, the ‘‘Nasdaq’’) filed with the Securities and listed on a U.S. exchange.
Companies will also deliver, at least 30 Exchange Commission (‘‘Commission’’), The Fund defines ‘‘equity securities’’
days before the Effective Date a pursuant to section 19(b)(1) 1 of the to include common and preferred stock,
prospectus for each applicable Securities Exchange Act of 1934 (‘‘Act’’ American Depositary Receipts
Replacement Fund. or ‘‘Exchange Act’’) 2 and Rule 19b–4 (‘‘ADRs’’), real estate investment trusts,
8. Companies will deliver to each thereunder,3 a proposed rule change to and ETFs that under normal
Affected Contract Owner within five (5) list and trade the shares (‘‘Shares’’) of circumstances invest at least 80% of
business days of the Effective Date a the AlphaMark Actively Managed Small their net assets in equity securities of
written confirmation which will Cap ETF (the ‘‘Fund’’) of ETF Series small cap companies (‘‘Small Cap
include: (a) A confirmation that the Solutions (the ‘‘Trust’’) under Nasdaq ETFs’’). The Fund may invest up to 30%
Substitutions were carried out as Rule 5735. The proposed rule change of its net assets in foreign equity
previously notified; (b) a restatement of was published for comment in the securities of small cap companies traded
the information set forth in the Pre- Federal Register on March 3, 2015.4 The on a U.S. exchange as ADRs, which may
Substitution Notice; and (c) before and Commission received no comments on include companies in emerging markets.
after account values. the proposed rule change. This order The Adviser expects that there will
9. After the Effective Date Applicants approves the proposed rule change. generally be between 25 and 40 stocks
agree not to change a Replacement in the Fund’s portfolio.
II. Description of the Proposal The Fund is non-diversified, and
Fund’s sub-adviser without first (a)
obtaining shareholder approval of the The Exchange proposes to list and therefore may invest a larger percentage
sub-adviser change or (b) Voya Variable trade the Shares under Nasdaq Rule of its assets in the securities of a single
Portfolios Inc. determining that it can 5735, which governs the listing and
continue to rely on its manager-of- trading of Managed Fund Shares on the 7 See Notice, supra note 4, 80 FR at 11503. In

Exchange. The Fund will be an actively- addition, the Exchange states that, in the event (a)
managers exemptive order. the Adviser becomes affiliated with a broker-dealer
10. For two years following the managed exchange-traded fund (‘‘ETF’’). or registers as a broker-dealer, or (b) any new
Effective Date the net annual expenses The Shares will be offered by the Trust.5 adviser or sub-adviser is a registered broker-dealer
of each Replacement Fund will not The Trust is registered with the or becomes affiliated with a broker-dealer, it will
Commission as an investment company implement a fire wall with respect to its relevant
exceed the net annual expenses of the personnel and/or such broker-dealer affiliate, as
corresponding Existing Fund as of the and has filed a registration statement on applicable, regarding access to information
Fund’s most recent fiscal year. To Form N–1A (‘‘Registration Statement’’) concerning the composition and/or changes to the
achieve this limitation, the Replacement with the Commission.6 The Fund is a portfolio and will be subject to procedures designed
series of the Trust. to prevent the use and dissemination of material
Fund’s investment adviser will waive nonpublic information regarding such portfolio.
fees or reimburse the Replacement Fund AlphaMark Advisors, LLC will be the According to the Exchange, the Adviser has no
in certain amounts to maintain expenses investment adviser (‘‘Adviser’’) to the present intent or arrangement to become affiliated
at or below the limit. Any adjustments Fund. Quasar Distributors, LLC (the with any broker-dealer, and the Fund does not
‘‘Distributor’’) will be the principal currently intend to use a sub-adviser. Id.
will be made at least on a quarterly 8 Additional information regarding, among other
basis. In addition, the Companies will underwriter and distributor of the
things, the Fund, the Shares, the Fund’s investment
not increase the Contract fees and Fund’s Shares. U.S. Bancorp Fund objectives, the Fund’s strategies, the Fund’s
charges including asset based charges Services, LLC will act as the holdings, risks, fees and expenses associated with
such as mortality expense risk charges administrator, accounting agent, and the Shares, creations and redemptions of Shares,
availability of information, trading rules and halts,
deducted from the subaccounts that 1 15 and surveillance procedures can be found in the
U.S.C. 78s(b)(1).
would otherwise be assessed under the 2 15
Notice and the Registration Statement. See Notice,
U.S.C. 78a. supra note 4, and Registration Statement, supra
terms of the Contracts for a period of at 3 17 CFR 240.19b–4.
note 6, respectively.
least two years following the Effective 4 See Securities Exchange Act Release No. 74377 9 The term ‘‘under normal market conditions’’ as
Date. (February 25, 2015), 80 FR 11502 (‘‘Notice’’). used herein includes, but is not limited to, the
5 The Trust has obtained an order from the
absence of adverse market, economic, political or
tkelley on DSK3SPTVN1PROD with NOTICES

For the Commission, by the Division of
Commission granting certain exemptive relief to the other conditions, including extreme volatility or
Investment Management, under delegated Trust under the 1940 Act. See Investment Company trading halts in the securities markets or the
authority. Act Release No. 31469 (February 24, 2015) (File No. financial markets generally; operational issues
Brent J. Fields, 812–14402). causing dissemination of inaccurate market
6 See Post- Effective Amendment No. 43 to the information; or force majeure type events such as
Secretary.
Registration Statement on Form N–1A for the Trust, systems failure, natural or man-made disaster, act
[FR Doc. 2015–09067 Filed 4–20–15; 8:45 am] dated February 4, 2015 (File Nos. 333–179562 and of God, armed conflict, act of terrorism, riot or labor
BILLING CODE 8011–01–P 811–22668). disruption or any similar intervening circumstance.

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Document Created: 2015-12-16 08:33:59
Document Modified: 2015-12-16 08:33:59

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of application for an order approving the substitution of certain securities pursuant to section 26(c) of the Investment Company Act of 1940, as amended (the ``1940 Act'' or ``Act'').
Contact		Rochelle Kauffman Plesset, Senior Counsel, at (202) 551-6840, or Nadya Roytblat, Assistant Chief Counsel at (202) 551-0825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		80 FR 22245