80_FR_28125 80 FR 28031 - The MainStay Funds, et al.; Notice of Application

80 FR 28031 - The MainStay Funds, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 94 (May 15, 2015)

Page Range28031-28035
FR Document2015-11730

Federal Register, Volume 80 Issue 94 (Friday, May 15, 2015) 
[Federal Register Volume 80, Number 94 (Friday, May 15, 2015)]
[Notices]
[Pages 28031-28035]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11730]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31597; File No. 812-14360]


The MainStay Funds, et al.; Notice of Application

May 11, 2015.

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

ACTION: 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, as well as from certain 
disclosure requirements.

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Summary of Application: Applicants request an order that would permit 
them to enter into and materially amend subadvisory agreements with 
Wholly-Owned Subadvisers (as defined below) and Non-Affiliated 
Subadvisers (as defined below) without shareholder approval and would 
grant relief from certain disclosure requirements. The requested order 
would supersede a prior order that granted relief solely with respect 
to Non-Affiliated Subadvisers.\1\
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    \1\ The MainStay Funds, et al., Investment Company Act Release 
Nos. 27595 (December 11, 2006) (notice) and 27656 (January 8, 2007) 
(order).

Applicants: The MainStay Funds, MainStay Funds Trust and MainStay VP 
Funds Trust (each, a ``Trust'') and New York Life Investment Management 
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LLC (the ``Adviser'' or ``New York Life Investments'').

Filing Dates: The application was filed on September 19, 2014, and 
amended on February 3, 2015, and April 3, 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 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 June 5, 2015, 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

[[Page 28032]]

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, c/o J. Kevin Gao, 
Esq., New York Life Investment Management LLC, 169 Lackawanna Avenue, 
Parsippany, New Jersey 07054.

FOR FURTHER INFORMATION CONTACT: Elizabeth G. Miller, Senior Counsel, 
at (202) 551-8707, or Holly Hunter-Ceci, Branch Chief, at (202) 551-
6825 (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.

Applicants' Representations

    1. Each Trust is registered with the Commission as an open-end 
management investment company under the Act. Each of MainStay Funds 
Trust and MainStay VP Funds Trust is organized as a Delaware statutory 
trust, and The MainStay Funds is organized as a Massachusetts business 
trust. Each Trust may offer one or more series of shares (each a 
``Fund,'' and collectively the ``Funds''), each with its own distinct 
investment objectives, policies and restrictions. Shares of MainStay VP 
Funds Trust will be offered and sold through insurance company 
accounts, which are used to fund variable annuity contracts. The 
Adviser is a Delaware limited liability company registered with the 
Commission as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act''), and serves as investment adviser to the 
Funds.
    2. Applicants request an order to permit the Adviser,\2\ subject to 
the approval of the board of trustees of the applicable Trust (each a 
``Board''),\3\ including a majority of the trustees who are not 
``interested persons'' of the Trusts or the Adviser, as defined in 
section 2(a)(19) of the Act (the ``Independent Trustees''), to, without 
obtaining shareholder \4\ approval: (i) Select certain wholly-owned and 
non-affiliated investment Subadvisers \5\ to manage all or a portion of 
the assets of one or more of the Funds pursuant to an investment 
subadvisory agreement with each Subadviser (each a ``Subadvisory 
Agreement'' and collectively, the ``Subadvisory Agreements''); and (ii) 
materially amend Subadvisory Agreements with the Subadvisers.\6\ 
Applicants request that the relief apply to the named applicants, as 
well as to any future Fund and any other existing or future registered 
open-end management investment company or series thereof that intends 
to rely on the requested order in the future and (i) is advised by the 
Adviser or its successors; (ii) uses the multi-manager structure 
described in the application; and (iii) complies with the terms and 
conditions set forth in the application (each, a ``Subadvised 
Fund'').\7\ The requested relief will not extend to any subadviser, 
other than a Wholly-Owned Subadviser, who is an affiliated person, as 
defined in section 2(a)(3) of the Act, of the Subadvised Funds or of 
the Adviser, other than by reason of serving as a subadviser to one or 
more of the Subadvised Funds (``Affiliated Subadviser'').
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    \2\ The term ``Adviser'' includes (1) New York Life Investments 
and (ii) any entity controlling, controlled by or under common 
control with, New York Life Investments or its successors. For the 
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.
    \3\ The term ``Board'' also includes the board of trustees or 
directors of a future Subadvised Fund (as defined below), if 
different from the board of trustees of a Trust.
    \4\ The term ``shareholder'' includes variable contract owners 
and insurance companies entitled to give voting instructions with 
respect to a Fund. Pursuant to current Commission requirements and 
Commission staff interpretations, insurance companies vote Fund 
shares held in registered separate accounts in accordance with 
voting instructions received from variable contract owners or 
payees. In addition, Fund shares held in registered separate 
accounts for which contract owners or payees are entitled to give 
voting instructions, but as to which no voting instructions are 
received, are voted in proportion to the shares for which voting 
instructions have been received by that company. The term ``payee'' 
shall include an individual entitled to the receipt of payment under 
a variable annuity contract.
    \5\ A ``Subadviser'' for a Fund is a Subadviser that is (i) an 
indirect or direct ``wholly-owned subsidiary'' (as such term is 
defined in the Act) of the Adviser, or (ii) a sister company of the 
Adviser that is an indirect or direct ``wholly-owned subsidiary'' 
(as such term is defined in the Act) of the same company that, 
indirectly or directly, wholly owns the Adviser (each of (i) and 
(ii) a ``Wholly-Owned Subadviser'' and collectively, the ``Wholly-
Owned Subadvisers''), or (iii) not an ``affiliated person'' (as such 
term is defined in section 2(a)(3) of the Act) of the Funds, the 
applicable Trust, or the Adviser, except to the extent that an 
affiliation arises solely because the Subadviser serves as a 
subadviser to one or more Funds (each a ``Non-Affiliated 
Subadviser'' and collectively, the ``Non-Affiliated Subadvisers'').
    \6\ Shareholder approval will continue to be required for any 
other subadviser changes and material amendments to an existing 
subadvisory agreement with any subadviser other than a Non-
Affiliated Subadviser or a Wholly-Owned Subadviser (all such changes 
referred to herein as ``Ineligible Subadviser Changes''), except as 
otherwise permitted by rule.
    \7\ All registered open-end investment companies that currently 
intend to rely on the requested order are named as applicants. Any 
entity that relies on the requested order will do so only in 
accordance with the terms and conditions contained in the 
application. If the name of any Subadvised Fund contains the name of 
a Subadviser, the name of the Adviser that serves as the primary 
adviser to the Subadvised Fund, or a trademark or trade name that is 
owned by or publicly used to identify that Adviser, will precede the 
name of the Subadviser.
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    3. New York Life Investments serves as the investment adviser to 
each Fund pursuant to an investment advisory agreement with the 
applicable Trust (each an ``Investment Advisory Agreement'' and 
together the ``Investment Advisory Agreements''). Any future Adviser 
also will be registered with the Commission as an investment adviser 
under the Advisers Act. Each Investment Advisory Agreement has been or 
will be approved by the applicable Board, including a majority of the 
Independent Trustees, and by the shareholders of the relevant Fund in 
the manner required by sections 15(a) and 15(c) of the Act and rule 
18f-2 thereunder. The terms of the Investment Advisory Agreements 
comply or will comply with section 15(a) of the Act.
    4. Pursuant to the terms of each Investment Advisory Agreement, the 
Adviser, subject to the oversight of the applicable Board, has agreed 
or will agree to provide a continuous investment program for each Fund 
and determine the securities and other investments to be purchased, 
retained, sold or loaned by each Fund and the portion of such assets to 
be invested or held uninvested as cash. The Adviser will periodically 
review each Fund's investment policies and strategies and, based on the 
need of a particular Fund, may recommend changes to the investment 
policies and strategies of the Fund for consideration by the Board. For 
its services to each Fund, the Adviser receives or will receive an 
investment advisory fee from that Fund as specified in the applicable 
Investment Advisory Agreement. Consistent with the terms of each 
Subadvised Fund's Investment Advisory Agreement, the Adviser may, 
subject to the approval of the Board, including a majority of the 
Independent Trustees, and the shareholders of the applicable Subadvised 
Fund (if required), delegate portfolio management responsibilities of 
all or a portion of the assets of a Subadvised Fund to a Subadviser. 
The Adviser continues to have overall responsibility for the management 
and

[[Page 28033]]

investment of the assets of each Subadvised Fund. These 
responsibilities include recommending the removal or replacement of 
Subadvisers, and determining the portion of that Subadvised Fund's 
assets to be managed by any given Subadviser and reallocating those 
assets as necessary from time to time.
    5. Pursuant to the authority under the Investment Advisory 
Agreements, the Adviser may enter into Subadvisory Agreements with 
various Subadvisers on behalf of the Funds. The Adviser has entered 
into a Subadvisory Agreement with the following Subadvisers: Candriam 
Belgium S.A., Cornerstone Capital Management Holdings LLC; 
Cushing[supreg] Asset Management, LP; Eagle Asset Management, Inc.; 
Epoch Investments Partners, Inc.; Institutional Capital LLC; Janus 
Capital Management LLC; MacKay Shields LLC; Marketfield Asset 
Management LLC; Markston International LLC; Massachusetts Financial 
Services Company; NYL Investors LLC; Pacific Investment Management 
Company LLC; T. Rowe Price Associates, Inc.; Van Eck Associates 
Corporation; and Winslow Capital Management LLC. The Adviser also may, 
in the future, enter into Subadvisory Agreements with other Subadvisers 
on behalf of the Funds. The Subadvisory Agreements were or will be 
approved by the applicable Board, including a majority of the 
Independent Trustees, and the shareholders of the Subadvised Fund in 
accordance with sections 15(a) and 15(c) of the Act and rule 18f-2 
thereunder. In addition, the terms of the Subadvisory Agreements comply 
or will comply fully with the requirements of section 15(a) of the Act. 
The Subadvisers, subject to the oversight of the Adviser and the 
applicable Board, determine or will determine the securities and other 
instruments to be purchased, sold or entered into by a Subadvised 
Fund's portfolio or a portion thereof, and place orders with brokers or 
dealers that they select. The Adviser will compensate the Subadvisers 
out of the fee received by the Adviser from the applicable Subadvised 
Fund under the applicable Investment Advisory Agreement.
    6. Subadvised Funds will inform shareholders of the hiring of a new 
Subadviser pursuant to the following procedures (``Modified Notice and 
Access Procedures''): (a) Within 90 days after a new Subadviser is 
hired for any Subadvised Fund, that Subadvised Fund will send its 
shareholders either a Multi-manager Notice or a Multi-manager Notice 
and Multi-manager Information Statement; \8\ and (b) a Subadvised Fund 
will make the Multi-manager Information Statement available on the Web 
site identified in the Multi-manager Notice no later than when the 
Multi-manager Notice (or Multi-manager Notice and Multi-manager 
Information Statement) is first sent to shareholders, and will maintain 
it on that Web site for at least 90 days. Applicants state that, in the 
circumstances described in the application, a proxy solicitation to 
approve the appointment of new Subadvisers provides no more meaningful 
information to shareholders than the proposed Multi-manager Information 
Statement. Applicants also state that the applicable Board would comply 
with the requirements of sections 15(a) and 15(c) of the Act before 
entering into or amending Subadvisory Agreements.
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    \8\ A ``Multi-manager Notice'' will be modeled on a Notice of 
Internet Availability as defined in rule 14a-16 under the Securities 
Exchange Act of 1934 (``Exchange Act''), and specifically will, 
among other things: (a) Summarize the relevant information regarding 
the new Subadviser (except as modified to permit Aggregate Fee 
Disclosure, as defined below); (b) inform shareholders that the 
Multi-manager Information Statement is available on a Web site; (c) 
provide the Web site address; (d) state the time period during which 
the Multi-manager Information Statement will remain available on 
that Web site; (e) provide instructions for accessing and printing 
the Multi-manager Information Statement; and (f) instruct the 
shareholder that a paper or email copy of the Multi-manager 
Information Statement may be obtained, without charge, by contacting 
the Subadvised Fund.
    A ``Multi-manager Information Statement'' will meet the 
requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 
14A under the Exchange Act for an information statement, except as 
modified by the order to permit Aggregate Fee Disclosure. Multi-
manager Information Statements will be filed with the Commission via 
the EDGAR system.
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    7. Applicants also request an order under section 6(c) of the Act 
exempting the Subadvised Funds from certain disclosure obligations that 
may require each Subadvised Fund to disclose fees paid by the Adviser 
to each Subadviser. Applicants seek relief to permit each Subadvised 
Fund to disclose (as a dollar amount and a percentage of a Subadvised 
Fund's net assets) (a) the aggregate fees paid to the Adviser and any 
Wholly-Owned Subadvisers; (b) the aggregate fees paid to Non-Affiliated 
Subadvisers; and (c) the fee paid to each Affiliated Subadviser 
(collectively, the ``Aggregate Fee Disclosure''). An exemption is 
requested to permit a Subadvised Fund to include only the Aggregate Fee 
Disclosure. All other items required by Sections 6-07(2)(a), (b) and 
(c) of Regulation S-X will be disclosed.

Applicants' Legal Analysis

    1. Section 15(a) of the Act states, in part, that it is unlawful 
for any person to act as an investment adviser to a registered 
investment company ``except pursuant to a written contract, which 
contract, whether with such registered company or with an investment 
adviser of such registered company, has been approved by the vote of a 
majority of the outstanding voting securities of such registered 
company.'' Rule 18f-2 under the Act provides that each series or class 
of stock in a series investment company affected by a matter must 
approve that matter if the Act requires shareholder approval.
    2. Form N-1A is the registration statement used by open-end 
investment companies. Item 19(a)(3) of Form N-1A requires a registered 
investment company to disclose in its statement of additional 
information the method of computing the ``advisory fee payable'' by the 
investment company, including the total dollar amounts that the 
investment company ``paid to the adviser (aggregated with amounts paid 
to affiliated advisers, if any), and any advisers who are not 
affiliated persons of the adviser, under the investment advisory 
contract for the last three fiscal years.''
    3. Rule 20a-1 under the Act requires proxies solicited with respect 
to a registered investment company to comply with Schedule 14A under 
the Exchange Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 
22(c)(9) of Schedule 14A, taken together, require a proxy statement for 
a shareholder meeting at which the advisory contract will be voted upon 
to include the ``rate of compensation of the investment adviser,'' the 
``aggregate amount of the investment adviser's fee,'' a description of 
the ``terms of the contract to be acted upon,'' and, if a change in the 
advisory fee is proposed, the existing and proposed fees and the 
difference between the two fees.
    4. Regulation S-X sets forth the requirements for financial 
statements required to be included as part of a registered investment 
company's registration statement and shareholder reports filed with the 
Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require 
a registered investment company to include in its financial statement 
information about the investment advisory fees.
    5. 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 
from any rule thereunder, if such

[[Page 28034]]

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. Applicants state that 
their requested relief meets this standard for the reasons discussed 
below.
    6. Applicants assert that the shareholders expect the Adviser, 
subject to the review and approval of the applicable Board, to select a 
Subadviser who is in the best position to achieve the Subadvised Fund's 
investment objective. Applicants assert that, from the perspective of 
the shareholder, the role of the Subadvisers is substantially 
equivalent to the role of the individual portfolio managers employed by 
an investment adviser to a traditional investment company. Applicants 
believe that permitting the Adviser to perform the duties for which the 
shareholders of a Subadvised Fund are paying the Adviser--the 
selection, supervision and evaluation of the Subadviser--without 
incurring unnecessary delays or expenses is appropriate and in the 
interest of a Subadvised Fund's shareholders and will allow such 
Subadvised Fund to operate more efficiently. Applicants state that each 
Investment Advisory Agreement will continue to be fully subject to 
section 15(a) of the Act and rule 18f-2 under the Act and approved by 
the relevant Board, including a majority of the Independent Trustees, 
in the manner required by sections 15(a) and 15(c) of the Act. 
Applicants are not seeking an exemption with respect to the Investment 
Advisory Agreements.
    7. Applicants assert that disclosure of the individual fees that 
the Adviser would pay to the Subadvisers does not serve any meaningful 
purpose. Applicants contend that the primary reasons for requiring 
disclosure of individual fees paid to Subadvisers are to inform 
shareholders of expenses to be charged by a particular Subadvised Fund 
and to enable shareholders to compare the fees to those of other 
comparable investment companies. Applicants believe that the requested 
relief satisfies these objectives because the advisory fee paid to the 
Adviser will be fully disclosed and, therefore, shareholders will know 
what a Subadvised Fund's fees and expenses are and will be able to 
compare the advisory fees a Subadvised Fund is charged to those of 
other investment companies. Applicants assert that the requested 
disclosure relief would benefit shareholders of the Subadvised Funds 
because it would improve the Adviser's ability to negotiate the fees 
paid to Subadvisers. Applicants state that the Adviser may be able to 
negotiate rates that are below a Subadviser's ``posted'' amounts if the 
Adviser is not required to disclose the Subadvisers' fees to the 
public. Applicants assert that the relief will also encourage 
Subadvisers to negotiate lower subadvisory fees with the Adviser if the 
lower fees are not required to be made public.
    8. Applicants submit that the requested relief meets the standards 
for relief under section 6(c) of the Act. Applicants state that the 
operation of a Subadvised Fund in the manner described in the 
application must be approved by shareholders of the Subadvised Fund 
before that Subadvised Fund may rely on the requested order. In 
addition, applicants state that any conflict of interest or economic 
incentive that may exist in connection with the Adviser selecting a 
Wholly-Owned Subadviser to manage all or a portion of the assets of a 
Subadvised Fund are addressed under the terms and conditions of the 
application and will be disclosed to shareholders and considered by the 
applicable Board when it reviews the selection or termination of 
Subadvisers. Applicants also assert that conditions 6, 7, 10 and 11 are 
designed to provide the Board with sufficient independence and the 
resources and information it needs to monitor and address any conflicts 
of interest. Applicants state that, accordingly, they believe the 
requested relief 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.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Before a Subadvised Fund may rely on the order requested in the 
application, the operation of the Subadvised Fund in the manner 
described in the application, including the hiring of Wholly-Owned 
Subadvisers, will be, or has been, approved by a majority of the 
Subadvised Fund's outstanding voting securities (or if the Subadvised 
Fund serves as a funding medium for any sub-account of a registered 
separate account, pursuant to voting instructions provided by variable 
contract owners with to whom units of the sub-account are credited), as 
defined in the Act, or, in the case of a Subadvised Fund whose public 
shareholders (or variable contract owners through a registered separate 
account) purchase shares on the basis of a prospectus containing the 
disclosure contemplated by condition 2 below, by the initial 
shareholder before such Subadvised Fund's shares are offered to the 
public (or the variable contract owners through a separate account).
    2. The prospectus for each Subadvised Fund will disclose the 
existence, substance, and effect of any order granted pursuant to the 
application. In addition, each Subadvised Fund will hold itself out to 
the public as employing the multi-manager structure described in the 
application. The prospectus will prominently disclose that the Adviser 
has the ultimate responsibility, subject to oversight by the applicable 
Board, to oversee the Subadvisers and recommend their hiring, 
termination and replacement.
    3. The Adviser will provide general management services to each 
Subadvised Fund, including overall supervisory responsibility for the 
general management and investment of the Subadvised Fund's assets, and 
subject to review and approval of the applicable Board, will (i) set 
the Subadvised Fund's overall investment strategies; (ii) evaluate, 
select, and recommend Subadvisers to manage all or a portion of the 
Subadvised Fund's assets; (iii) allocate and, when appropriate, 
reallocate the Subadvised Fund's assets among Subadvisers; (iv) monitor 
and evaluate the Subadvisers' performance; and (v) implement procedures 
reasonably designed to ensure that Subadvisers comply with the 
Subadvised Fund's investment objective, policies and restrictions.
    4. A Subadvised Fund will not make any Ineligible Subadviser 
Changes without the approval of the shareholders (or, if the Subadvised 
Fund serves as a funding medium for any sub-account of a registered 
separate account, the Adviser will inform the unitholders of the sub-
account) of the applicable Subadvised Fund.
    5. Subadvised Funds will inform shareholders (or, if the Subadvised 
Fund serves as a funding medium for any sub-account of a registered 
separate account, the Adviser will inform the unitholders of the sub-
account) of the hiring of a new Subadviser within 90 days after the 
hiring of the new Subadviser pursuant to the Modified Notice and Access 
Procedures.
    6. At all times, at least a majority of the applicable Board will 
be Independent Trustees, and the selection and nomination of new or 
additional Independent Trustees will be placed within the discretion of 
the then-existing Independent Trustees.
    7. Independent Legal Counsel, as defined in rule 0-1(a)(6) under 
the Act,

[[Page 28035]]

will be engaged to represent the Independent Trustees. The selection of 
such counsel will be within the discretion of the then-existing 
Independent Trustees.
    8. The Adviser will provide the applicable Board, no less 
frequently than quarterly, with information about the profitability of 
the Adviser on a per Subadvised Fund basis. The information will 
reflect the impact on profitability of the hiring or termination of any 
Subadviser during the applicable quarter.
    9. Whenever a Subadviser is hired or terminated, the Adviser will 
provide the applicable Board with information showing the expected 
impact on the profitability of the Adviser.
    10. Whenever a Subadviser change is proposed for a Subadvised Fund 
with an Affiliated Subadviser or a Wholly-Owned Subadviser, the 
applicable Board, including a majority of the Independent Trustees, 
will make a separate finding, reflected in the applicable Board 
minutes, that the change is in the best interests of the Subadvised 
Fund and its shareholders and does not involve a conflict of interest 
from which the Adviser or the Affiliated Subadviser or Wholly-Owned 
Subadviser derives an inappropriate advantage.
    11. No Trustee or officer of a Subadvised Fund, or director, 
manager or officer of the Adviser, will own directly or indirectly 
(other than through a pooled investment vehicle that is not controlled 
by such person), any interest in a Subadviser except for (a) ownership 
of interests in the Adviser or any entity, other than a Wholly-Owned 
Subadviser, that controls, is controlled by or is under common control 
with the Adviser, or (b) ownership of less than 1% of the outstanding 
securities of any class of equity or debt of a publicly-traded company 
that is either a Subadviser or an entity that controls, is controlled 
by, or is under common control with a Subadviser.
    12. Each Subadvised Fund will disclose in its registration 
statement the Aggregate Fee Disclosure.
    13. In the event that the Commission adopts a rule under the Act 
providing substantially similar relief to that requested in the 
application, the requested order will expire on the effective date of 
that rule.
    14. Any new Subadvisory Agreement or any amendment to a Subadvised 
Fund's existing investment advisory agreement or Subadvisory Agreement 
that directly or indirectly results in an increase in the aggregate 
advisory fee rate payable by the Subadvised Fund will be submitted to 
the Subadvised Fund's shareholders (or, if the Subadvised Fund serves 
as a funding medium for any sub-account of a registered separate 
account, the Adviser will inform the unitholders of the sub-account) 
for approval.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-11730 Filed 5-14-15; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices 28031 Required Majority determines that it is without limitation, the expenses of the voting securities, as defined in Section in the Regulated Fund’s best interests. distribution of any such securities 2(a)(42) of the Act. (c) If, with respect to any Follow-On registered for sale under the Securities For the Commission, by the Division of Investment: Act) will, to the extent not payable by Investment Management, under delegated (i) The amount of the opportunity is the Advisers under their respective authority. not based on the Regulated Funds’ and investment advisory agreements with Robert W. Errett, the Future Affiliated Funds’ outstanding Future Affiliated Funds and the Deputy Secretary. investments immediately preceding the Regulated Funds, be shared by the [FR Doc. 2015–11731 Filed 5–14–15; 8:45 am] Follow-On Investment; and Regulated Funds and the Future (ii) the aggregate amount Affiliated Funds in proportion to the BILLING CODE 8011–01–P recommended by the Adviser to be relative amounts of the securities held invested by each Regulated Fund in the or to be acquired or disposed of, as the Follow-On Investment, together with SECURITIES AND EXCHANGE case may be. COMMISSION the amount proposed to be invested by 13. Any transaction fee 12 (including the participating Future Affiliated break-up or commitment fees but [Investment Company Act Release No. Funds in the same transaction, exceeds excluding broker’s fees contemplated by 31597; File No. 812–14360] the amount of the opportunity; then the section 17(e) or 57(k) of the Act, as amount invested by each such party will applicable) received in connection with The MainStay Funds, et al.; Notice of be allocated among them pro rata based a Co-Investment Transaction will be Application on each participating party’s capital distributed to the participating May 11, 2015. available for investment in the asset Regulated Funds and Future Affiliated class being allocated, up to the amount AGENCY: Securities and Exchange Funds on a pro rata basis based on the Commission (‘‘Commission’’). proposed to be invested by each. amounts they invested or committed, as (d) The acquisition of Follow-On ACTION: Notice of an application under the case may be, in such Co-Investment Investments as permitted by this section 6(c) of the Investment Company Transaction. If any transaction fee is to condition will be considered a Co- Act of 1940 (‘‘Act’’) for an exemption be held by an Adviser pending Investment Transaction for all purposes from section 15(a) of the Act and rule consummation of the transaction, the and subject to the other conditions set 18f–2 under the Act, as well as from fee will be deposited into an account forth in the application. certain disclosure requirements. maintained by such Adviser at a bank or 9. The Non-Interested Directors of banks having the qualifications SUMMARY OF APPLICATION: Applicants each Regulated Fund will be provided prescribed in section 26(a)(1) of the Act, request an order that would permit them quarterly for review all information and the account will earn a competitive to enter into and materially amend concerning Potential Co-Investment rate of interest that will also be divided subadvisory agreements with Wholly- Transactions and Co-Investment pro rata among the participating Owned Subadvisers (as defined below) Transactions, including investments Regulated Funds and Future Affiliated and Non-Affiliated Subadvisers (as made by other Regulated Funds or Funds based on the amounts they invest defined below) without shareholder Future Affiliated Funds that the in such Co-Investment Transaction. approval and would grant relief from Regulated Fund considered but declined None of the Future Affiliated Funds, the certain disclosure requirements. The to participate in, so that the Non- Advisers, the other Regulated Funds or requested order would supersede a prior Interested Directors may determine any affiliated person of the Regulated order that granted relief solely with whether all investments made during Funds or Future Affiliated Funds will respect to Non-Affiliated Subadvisers.1 the preceding quarter, including those receive additional compensation or investments that the Regulated Fund APPLICANTS: The MainStay Funds, remuneration of any kind as a result of considered but declined to participate MainStay Funds Trust and MainStay VP or in connection with a Co-Investment in, comply with the conditions of the Funds Trust (each, a ‘‘Trust’’) and New Transaction (other than (a) in the case Order. In addition, the Non-Interested York Life Investment Management LLC of the Regulated Funds and the Future Directors will consider at least annually (the ‘‘Adviser’’ or ‘‘New York Life Affiliated Funds, the pro rata the continued appropriateness for the Investments’’). transaction fees described above and Regulated Fund of participating in new FILING DATES: The application was filed fees or other compensation described in and existing Co-Investment on September 19, 2014, and amended condition 2(c)(iii)(C); and (b) in the case Transactions. on February 3, 2015, and April 3, 2015. 10. Each Regulated Fund will of an Adviser, investment advisory fees paid in accordance with the agreement HEARING OR NOTIFICATION OF HEARING: An maintain the records required by section order granting the application will be 57(f)(3) of the Act as if each of the between the Adviser and the Regulated Fund or Future Affiliated Fund. issued unless the Commission orders a Regulated Funds were a BDC and each hearing. Interested persons may request 14. If the Holders own in the aggregate of the investments permitted under a hearing by writing to the more than 25% of the outstanding these conditions were approved by the Commission’s Secretary and serving Shares, then the Holders will vote such Required Majority under section 57(f) of applicants with a copy of the request, Shares as directed by an independent the Act. personally or by mail. Hearing requests 11. No Non-Interested Director of a third party (such as the trustee of a voting trust or a proxy adviser) when should be received by the Commission Regulated Fund will also be a director, by 5:30 p.m. on June 5, 2015, and voting on (1) the election of directors; mstockstill on DSK4VPTVN1PROD with NOTICES general partner, managing member or should be accompanied by proof of principal, or otherwise an ‘‘affiliated (2) the removal of one or more directors; or (3) any matters requiring approval by service on applicants, in the form of an person’’ (as defined in the Act), of a affidavit or, for lawyers, a certificate of Future Affiliated Fund. the vote of a majority of the outstanding service. Hearing requests should state 12. The expenses, if any, associated 12 Applicants are not requesting and the staff is with acquiring, holding or disposing of not providing any relief for transaction fees 1 The MainStay Funds, et al., Investment any securities acquired in a Co- received in connection with any Co-Investment Company Act Release Nos. 27595 (December 11, Investment Transaction (including, Transaction. 2006) (notice) and 27656 (January 8, 2007) (order). VerDate Sep<11>2014 18:20 May 14, 2015 Jkt 235001 PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1

28032 Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices the nature of the writer’s interest, the including a majority of the trustees who relief will not extend to any subadviser, reason for the request, and the issues are not ‘‘interested persons’’ of the other than a Wholly-Owned Subadviser, contested. Persons who wish to be Trusts or the Adviser, as defined in who is an affiliated person, as defined notified of a hearing may request section 2(a)(19) of the Act (the in section 2(a)(3) of the Act, of the notification by writing to the ‘‘Independent Trustees’’), to, without Subadvised Funds or of the Adviser, Commission’s Secretary. obtaining shareholder 4 approval: (i) other than by reason of serving as a ADDRESSES: Secretary, U.S. Securities Select certain wholly-owned and non- subadviser to one or more of the and Exchange Commission, 100 F Street affiliated investment Subadvisers 5 to Subadvised Funds (‘‘Affiliated NE., Washington, DC 20549–1090. manage all or a portion of the assets of Subadviser’’). Applicants, c/o J. Kevin Gao, Esq., New one or more of the Funds pursuant to an 3. New York Life Investments serves York Life Investment Management LLC, investment subadvisory agreement with as the investment adviser to each Fund 169 Lackawanna Avenue, Parsippany, each Subadviser (each a ‘‘Subadvisory pursuant to an investment advisory New Jersey 07054. Agreement’’ and collectively, the agreement with the applicable Trust ‘‘Subadvisory Agreements’’); and (ii) (each an ‘‘Investment Advisory FOR FURTHER INFORMATION CONTACT: materially amend Subadvisory Agreement’’ and together the Elizabeth G. Miller, Senior Counsel, at ‘‘Investment Advisory Agreements’’). Agreements with the Subadvisers.6 (202) 551–8707, or Holly Hunter-Ceci, Any future Adviser also will be Applicants request that the relief apply Branch Chief, at (202) 551–6825 registered with the Commission as an to the named applicants, as well as to (Division of Investment Management, investment adviser under the Advisers any future Fund and any other existing Chief Counsel’s Office). Act. Each Investment Advisory or future registered open-end SUPPLEMENTARY INFORMATION: The management investment company or Agreement has been or will be approved following is a summary of the series thereof that intends to rely on the by the applicable Board, including a application. The complete application requested order in the future and (i) is majority of the Independent Trustees, may be obtained via the Commission’s advised by the Adviser or its successors; and by the shareholders of the relevant Web site by searching for the file (ii) uses the multi-manager structure Fund in the manner required by number or an applicant using the described in the application; and (iii) sections 15(a) and 15(c) of the Act and Company name box, at http:// complies with the terms and conditions rule 18f–2 thereunder. The terms of the www.sec.gov/search/search.htm or by set forth in the application (each, a Investment Advisory Agreements calling (202) 551–8090. ‘‘Subadvised Fund’’).7 The requested comply or will comply with section Applicants’ Representations 15(a) of the Act. 4 The term ‘‘shareholder’’ includes variable 4. Pursuant to the terms of each 1. Each Trust is registered with the contract owners and insurance companies entitled Investment Advisory Agreement, the Commission as an open-end to give voting instructions with respect to a Fund. Adviser, subject to the oversight of the management investment company Pursuant to current Commission requirements and Commission staff interpretations, insurance applicable Board, has agreed or will under the Act. Each of MainStay Funds companies vote Fund shares held in registered agree to provide a continuous Trust and MainStay VP Funds Trust is separate accounts in accordance with voting investment program for each Fund and organized as a Delaware statutory trust, instructions received from variable contract owners determine the securities and other or payees. In addition, Fund shares held in and The MainStay Funds is organized as registered separate accounts for which contract investments to be purchased, retained, a Massachusetts business trust. Each owners or payees are entitled to give voting sold or loaned by each Fund and the Trust may offer one or more series of instructions, but as to which no voting instructions portion of such assets to be invested or shares (each a ‘‘Fund,’’ and collectively are received, are voted in proportion to the shares held uninvested as cash. The Adviser for which voting instructions have been received by the ‘‘Funds’’), each with its own distinct that company. The term ‘‘payee’’ shall include an will periodically review each Fund’s investment objectives, policies and individual entitled to the receipt of payment under investment policies and strategies and, restrictions. Shares of MainStay VP a variable annuity contract. based on the need of a particular Fund, 5 A ‘‘Subadviser’’ for a Fund is a Subadviser that Funds Trust will be offered and sold may recommend changes to the is (i) an indirect or direct ‘‘wholly-owned through insurance company accounts, subsidiary’’ (as such term is defined in the Act) of investment policies and strategies of the which are used to fund variable annuity the Adviser, or (ii) a sister company of the Adviser Fund for consideration by the Board. contracts. The Adviser is a Delaware that is an indirect or direct ‘‘wholly-owned For its services to each Fund, the limited liability company registered subsidiary’’ (as such term is defined in the Act) of Adviser receives or will receive an the same company that, indirectly or directly, with the Commission as an investment wholly owns the Adviser (each of (i) and (ii) a investment advisory fee from that Fund adviser under the Investment Advisers ‘‘Wholly-Owned Subadviser’’ and collectively, the as specified in the applicable Act of 1940 (the ‘‘Advisers Act’’), and ‘‘Wholly-Owned Subadvisers’’), or (iii) not an Investment Advisory Agreement. serves as investment adviser to the ‘‘affiliated person’’ (as such term is defined in Consistent with the terms of each section 2(a)(3) of the Act) of the Funds, the Funds. applicable Trust, or the Adviser, except to the Subadvised Fund’s Investment Advisory 2. Applicants request an order to extent that an affiliation arises solely because the Agreement, the Adviser may, subject to permit the Adviser,2 subject to the Subadviser serves as a subadviser to one or more the approval of the Board, including a approval of the board of trustees of the Funds (each a ‘‘Non-Affiliated Subadviser’’ and majority of the Independent Trustees, collectively, the ‘‘Non-Affiliated Subadvisers’’). applicable Trust (each a ‘‘Board’’),3 6 Shareholder approval will continue to be and the shareholders of the applicable required for any other subadviser changes and Subadvised Fund (if required), delegate 2 The term ‘‘Adviser’’ includes (1) New York Life material amendments to an existing subadvisory portfolio management responsibilities of Investments and (ii) any entity controlling, agreement with any subadviser other than a Non- all or a portion of the assets of a controlled by or under common control with, New Affiliated Subadviser or a Wholly-Owned mstockstill on DSK4VPTVN1PROD with NOTICES York Life Investments or its successors. For the Subadviser (all such changes referred to herein as Subadvised Fund to a Subadviser. The purposes of the requested order, ‘‘successor’’ is ‘‘Ineligible Subadviser Changes’’), except as Adviser continues to have overall limited to an entity that results from a otherwise permitted by rule. responsibility for the management and reorganization into another jurisdiction or a change 7 All registered open-end investment companies in the type of business organization. that currently intend to rely on the requested order contains the name of a Subadviser, the name of the 3 The term ‘‘Board’’ also includes the board of are named as applicants. Any entity that relies on Adviser that serves as the primary adviser to the trustees or directors of a future Subadvised Fund (as the requested order will do so only in accordance Subadvised Fund, or a trademark or trade name that defined below), if different from the board of with the terms and conditions contained in the is owned by or publicly used to identify that trustees of a Trust. application. If the name of any Subadvised Fund Adviser, will precede the name of the Subadviser. VerDate Sep<11>2014 18:20 May 14, 2015 Jkt 235001 PO 00000 Frm 00148 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1

Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices 28033 investment of the assets of each Information Statement; 8 and (b) a Applicants’ Legal Analysis Subadvised Fund. These responsibilities Subadvised Fund will make the Multi- 1. Section 15(a) of the Act states, in include recommending the removal or manager Information Statement part, that it is unlawful for any person replacement of Subadvisers, and available on the Web site identified in to act as an investment adviser to a determining the portion of that the Multi-manager Notice no later than registered investment company ‘‘except Subadvised Fund’s assets to be managed when the Multi-manager Notice (or pursuant to a written contract, which by any given Subadviser and Multi-manager Notice and Multi- contract, whether with such registered reallocating those assets as necessary manager Information Statement) is first company or with an investment adviser from time to time. sent to shareholders, and will maintain of such registered company, has been 5. Pursuant to the authority under the it on that Web site for at least 90 days. approved by the vote of a majority of the Investment Advisory Agreements, the Applicants state that, in the outstanding voting securities of such Adviser may enter into Subadvisory circumstances described in the registered company.’’ Rule 18f–2 under Agreements with various Subadvisers application, a proxy solicitation to the Act provides that each series or class on behalf of the Funds. The Adviser has approve the appointment of new of stock in a series investment company entered into a Subadvisory Agreement Subadvisers provides no more affected by a matter must approve that with the following Subadvisers: meaningful information to shareholders matter if the Act requires shareholder Candriam Belgium S.A., Cornerstone than the proposed Multi-manager approval. Capital Management Holdings LLC; Information Statement. Applicants also 2. Form N–1A is the registration Cushing® Asset Management, LP; Eagle state that the applicable Board would statement used by open-end investment Asset Management, Inc.; Epoch comply with the requirements of companies. Item 19(a)(3) of Form N–1A Investments Partners, Inc.; Institutional sections 15(a) and 15(c) of the Act requires a registered investment Capital LLC; Janus Capital Management before entering into or amending company to disclose in its statement of LLC; MacKay Shields LLC; Marketfield Subadvisory Agreements. additional information the method of Asset Management LLC; Markston 7. Applicants also request an order computing the ‘‘advisory fee payable’’ International LLC; Massachusetts by the investment company, including under section 6(c) of the Act exempting Financial Services Company; NYL the total dollar amounts that the the Subadvised Funds from certain Investors LLC; Pacific Investment investment company ‘‘paid to the disclosure obligations that may require Management Company LLC; T. Rowe adviser (aggregated with amounts paid each Subadvised Fund to disclose fees Price Associates, Inc.; Van Eck to affiliated advisers, if any), and any paid by the Adviser to each Subadviser. Associates Corporation; and Winslow advisers who are not affiliated persons Applicants seek relief to permit each Capital Management LLC. The Adviser of the adviser, under the investment Subadvised Fund to disclose (as a dollar also may, in the future, enter into advisory contract for the last three fiscal amount and a percentage of a years.’’ Subadvisory Agreements with other Subadvised Fund’s net assets) (a) the Subadvisers on behalf of the Funds. The 3. Rule 20a–1 under the Act requires aggregate fees paid to the Adviser and proxies solicited with respect to a Subadvisory Agreements were or will be any Wholly-Owned Subadvisers; (b) the approved by the applicable Board, registered investment company to aggregate fees paid to Non-Affiliated comply with Schedule 14A under the including a majority of the Independent Subadvisers; and (c) the fee paid to each Trustees, and the shareholders of the Exchange Act. Items 22(c)(1)(ii), Affiliated Subadviser (collectively, the 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Subadvised Fund in accordance with ‘‘Aggregate Fee Disclosure’’). An sections 15(a) and 15(c) of the Act and Schedule 14A, taken together, require a exemption is requested to permit a proxy statement for a shareholder rule 18f–2 thereunder. In addition, the Subadvised Fund to include only the terms of the Subadvisory Agreements meeting at which the advisory contract Aggregate Fee Disclosure. All other will be voted upon to include the ‘‘rate comply or will comply fully with the items required by Sections 6–07(2)(a), requirements of section 15(a) of the Act. of compensation of the investment (b) and (c) of Regulation S–X will be adviser,’’ the ‘‘aggregate amount of the The Subadvisers, subject to the disclosed. oversight of the Adviser and the investment adviser’s fee,’’ a description applicable Board, determine or will of the ‘‘terms of the contract to be acted 8 A ‘‘Multi-manager Notice’’ will be modeled on determine the securities and other upon,’’ and, if a change in the advisory a Notice of Internet Availability as defined in rule instruments to be purchased, sold or 14a–16 under the Securities Exchange Act of 1934 fee is proposed, the existing and entered into by a Subadvised Fund’s (‘‘Exchange Act’’), and specifically will, among proposed fees and the difference portfolio or a portion thereof, and place other things: (a) Summarize the relevant between the two fees. orders with brokers or dealers that they information regarding the new Subadviser (except 4. Regulation S–X sets forth the as modified to permit Aggregate Fee Disclosure, as requirements for financial statements select. The Adviser will compensate the defined below); (b) inform shareholders that the Subadvisers out of the fee received by Multi-manager Information Statement is available required to be included as part of a the Adviser from the applicable on a Web site; (c) provide the Web site address; (d) registered investment company’s Subadvised Fund under the applicable state the time period during which the Multi- registration statement and shareholder manager Information Statement will remain reports filed with the Commission. Investment Advisory Agreement. available on that Web site; (e) provide instructions for accessing and printing the Multi-manager Sections 6–07(2)(a), (b) and (c) of 6. Subadvised Funds will inform Information Statement; and (f) instruct the Regulation S–X require a registered shareholders of the hiring of a new shareholder that a paper or email copy of the Multi- investment company to include in its Subadviser pursuant to the following manager Information Statement may be obtained, mstockstill on DSK4VPTVN1PROD with NOTICES financial statement information about procedures (‘‘Modified Notice and without charge, by contacting the Subadvised Fund. A ‘‘Multi-manager Information Statement’’ will the investment advisory fees. Access Procedures’’): (a) Within 90 days meet the requirements of Regulation 14C, Schedule 5. Section 6(c) of the Act provides that after a new Subadviser is hired for any 14C and Item 22 of Schedule 14A under the the Commission may exempt any Subadvised Fund, that Subadvised Exchange Act for an information statement, except person, security, or transaction or any Fund will send its shareholders either a as modified by the order to permit Aggregate Fee Disclosure. Multi-manager Information Statements class or classes of persons, securities, or Multi-manager Notice or a Multi- will be filed with the Commission via the EDGAR transactions from any provisions of the manager Notice and Multi-manager system. Act, or from any rule thereunder, if such VerDate Sep<11>2014 18:20 May 14, 2015 Jkt 235001 PO 00000 Frm 00149 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1

28034 Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices exemption is necessary or appropriate that the Adviser may be able to contemplated by condition 2 below, by in the public interest and consistent negotiate rates that are below a the initial shareholder before such with the protection of investors and the Subadviser’s ‘‘posted’’ amounts if the Subadvised Fund’s shares are offered to purposes fairly intended by the policy Adviser is not required to disclose the the public (or the variable contract and provisions of the Act. Applicants Subadvisers’ fees to the public. owners through a separate account). state that their requested relief meets Applicants assert that the relief will also 2. The prospectus for each this standard for the reasons discussed encourage Subadvisers to negotiate Subadvised Fund will disclose the below. lower subadvisory fees with the Adviser existence, substance, and effect of any 6. Applicants assert that the if the lower fees are not required to be order granted pursuant to the shareholders expect the Adviser, subject made public. application. In addition, each to the review and approval of the 8. Applicants submit that the Subadvised Fund will hold itself out to applicable Board, to select a Subadviser requested relief meets the standards for the public as employing the multi- who is in the best position to achieve relief under section 6(c) of the Act. manager structure described in the the Subadvised Fund’s investment Applicants state that the operation of a application. The prospectus will objective. Applicants assert that, from Subadvised Fund in the manner prominently disclose that the Adviser the perspective of the shareholder, the described in the application must be has the ultimate responsibility, subject role of the Subadvisers is substantially approved by shareholders of the to oversight by the applicable Board, to equivalent to the role of the individual Subadvised Fund before that oversee the Subadvisers and portfolio managers employed by an Subadvised Fund may rely on the recommend their hiring, termination investment adviser to a traditional requested order. In addition, applicants and replacement. investment company. Applicants state that any conflict of interest or 3. The Adviser will provide general believe that permitting the Adviser to economic incentive that may exist in management services to each perform the duties for which the connection with the Adviser selecting a Subadvised Fund, including overall shareholders of a Subadvised Fund are Wholly-Owned Subadviser to manage supervisory responsibility for the paying the Adviser—the selection, all or a portion of the assets of a general management and investment of supervision and evaluation of the Subadvised Fund are addressed under the Subadvised Fund’s assets, and Subadviser—without incurring the terms and conditions of the subject to review and approval of the unnecessary delays or expenses is application and will be disclosed to applicable Board, will (i) set the appropriate and in the interest of a shareholders and considered by the Subadvised Fund’s overall investment Subadvised Fund’s shareholders and applicable Board when it reviews the strategies; (ii) evaluate, select, and will allow such Subadvised Fund to selection or termination of Subadvisers. recommend Subadvisers to manage all operate more efficiently. Applicants Applicants also assert that conditions 6, or a portion of the Subadvised Fund’s state that each Investment Advisory 7, 10 and 11 are designed to provide the assets; (iii) allocate and, when Agreement will continue to be fully Board with sufficient independence and appropriate, reallocate the Subadvised subject to section 15(a) of the Act and the resources and information it needs Fund’s assets among Subadvisers; (iv) rule 18f–2 under the Act and approved to monitor and address any conflicts of monitor and evaluate the Subadvisers’ by the relevant Board, including a interest. Applicants state that, performance; and (v) implement majority of the Independent Trustees, in accordingly, they believe the requested procedures reasonably designed to the manner required by sections 15(a) relief is necessary or appropriate in the ensure that Subadvisers comply with and 15(c) of the Act. Applicants are not public interest and consistent with the the Subadvised Fund’s investment seeking an exemption with respect to protection of investors and the purposes objective, policies and restrictions. the Investment Advisory Agreements. fairly intended by the policy and 4. A Subadvised Fund will not make 7. Applicants assert that disclosure of provisions of the Act. any Ineligible Subadviser Changes the individual fees that the Adviser without the approval of the would pay to the Subadvisers does not Applicants’ Conditions shareholders (or, if the Subadvised serve any meaningful purpose. Applicants agree that any order Fund serves as a funding medium for Applicants contend that the primary granting the requested relief will be any sub-account of a registered separate reasons for requiring disclosure of subject to the following conditions: account, the Adviser will inform the individual fees paid to Subadvisers are 1. Before a Subadvised Fund may rely unitholders of the sub-account) of the to inform shareholders of expenses to be on the order requested in the applicable Subadvised Fund. charged by a particular Subadvised application, the operation of the 5. Subadvised Funds will inform Fund and to enable shareholders to Subadvised Fund in the manner shareholders (or, if the Subadvised compare the fees to those of other described in the application, including Fund serves as a funding medium for comparable investment companies. the hiring of Wholly-Owned any sub-account of a registered separate Applicants believe that the requested Subadvisers, will be, or has been, account, the Adviser will inform the relief satisfies these objectives because approved by a majority of the unitholders of the sub-account) of the the advisory fee paid to the Adviser will Subadvised Fund’s outstanding voting hiring of a new Subadviser within 90 be fully disclosed and, therefore, securities (or if the Subadvised Fund days after the hiring of the new shareholders will know what a serves as a funding medium for any sub- Subadviser pursuant to the Modified Subadvised Fund’s fees and expenses account of a registered separate account, Notice and Access Procedures. are and will be able to compare the pursuant to voting instructions provided 6. At all times, at least a majority of mstockstill on DSK4VPTVN1PROD with NOTICES advisory fees a Subadvised Fund is by variable contract owners with to the applicable Board will be charged to those of other investment whom units of the sub-account are Independent Trustees, and the selection companies. Applicants assert that the credited), as defined in the Act, or, in and nomination of new or additional requested disclosure relief would the case of a Subadvised Fund whose Independent Trustees will be placed benefit shareholders of the Subadvised public shareholders (or variable contract within the discretion of the then- Funds because it would improve the owners through a registered separate existing Independent Trustees. Adviser’s ability to negotiate the fees account) purchase shares on the basis of 7. Independent Legal Counsel, as paid to Subadvisers. Applicants state a prospectus containing the disclosure defined in rule 0–1(a)(6) under the Act, VerDate Sep<11>2014 18:20 May 14, 2015 Jkt 235001 PO 00000 Frm 00150 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1

Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices 28035 will be engaged to represent the will be submitted to the Subadvised summaries, set forth in sections A, B Independent Trustees. The selection of Fund’s shareholders (or, if the and C below, of the most significant such counsel will be within the Subadvised Fund serves as a funding aspects of such statements. discretion of the then-existing medium for any sub-account of a A. Self-Regulatory Organization’s Independent Trustees. registered separate account, the Adviser 8. The Adviser will provide the Statement of the Purpose of, and will inform the unitholders of the sub- applicable Board, no less frequently Statutory Basis for, the Proposed Rule account) for approval. than quarterly, with information about Change For the Commission, by the Division of the profitability of the Adviser on a per Investment Management, under delegated The purpose of the proposed rule Subadvised Fund basis. The information authority. change is to modify the Finance will reflect the impact on profitability of Robert W. Errett, Procedures to allow Clearstream the hiring or termination of any Deputy Secretary. Banking to serve as a triparty collateral Subadviser during the applicable service provider for initial or original [FR Doc. 2015–11730 Filed 5–14–15; 8:45 am] quarter. margin provided in respect of all BILLING CODE 8011–01–P 9. Whenever a Subadviser is hired or product categories, including CDS terminated, the Adviser will provide the Contracts. (Clearstream Banking applicable Board with information currently serves as a triparty collateral SECURITIES AND EXCHANGE showing the expected impact on the service provider solely for original COMMISSION profitability of the Adviser. margin provided in respect of F&O 10. Whenever a Subadviser change is [Release No. 34–74922; File No. SR–ICEEU– Contracts). proposed for a Subadvised Fund with 2015–009] Specifically, paragraph 3.1 of the an Affiliated Subadviser or a Wholly- Finance Procedures is revised to remove Owned Subadviser, the applicable Self-Regulatory Organizations; ICE the existing restriction that Clearstream Board, including a majority of the Clear Europe Limited; Notice of Filing Banking may only act as a triparty Independent Trustees, will make a of Proposed Rule Change Relating to collateral service provider with respect separate finding, reflected in the Finance Procedures To Add to Original Margin in respect of F&O applicable Board minutes, that the Clearstream Banking as a Triparty Contracts. As a result of such change, change is in the best interests of the Collateral Service Provider Clearstream Banking would be Subadvised Fund and its shareholders May 11, 2015. permitted to act as a triparty collateral and does not involve a conflict of Pursuant to Section 19(b)(1) of the service provider for initial or original interest from which the Adviser or the Securities Exchange Act of 1934 margin in respect of any product Affiliated Subadviser or Wholly-Owned (‘‘Act’’) 1 and Rule 19b–4 thereunder 2 category, including the CDS product Subadviser derives an inappropriate notice is hereby given that on May 5, category. (The other currently advantage. 2015, ICE Clear Europe Limited (‘‘ICE authorized triparty collateral service 11. No Trustee or officer of a Clear Europe’’) filed with the Securities provider, Euroclear Bank, is similarly Subadvised Fund, or director, manager and Exchange Commission eligible to act as such for any product or officer of the Adviser, will own (‘‘Commission’’) the proposed rule category.) A correction is also made in directly or indirectly (other than change as described in Items I, II, and paragraph 3.20 to provide that the through a pooled investment vehicle III below, which Items have been specified instruction deadlines apply to that is not controlled by such person), primarily prepared by ICE Clear Europe. triparty collateral arrangements with any interest in a Subadviser except for The Commission is publishing this both Euroclear Bank and Clearstream (a) ownership of interests in the Adviser notice to solicit comments on the Banking. or any entity, other than a Wholly- proposed rule change from interested ICE Clear Europe believes that the Owned Subadviser, that controls, is persons. proposed rule change is consistent with controlled by or is under common the requirements of Section 17A of the control with the Adviser, or (b) I. Self-Regulatory Organization’s Act 3 and the regulations thereunder ownership of less than 1% of the Statement of the Terms of Substance of applicable to it. Section 17A(b)(3)(F) of outstanding securities of any class of the Proposed Rule Change the Act 4 requires, among other things, equity or debt of a publicly-traded ICE Clear Europe proposes that the rules of a clearing agency be company that is either a Subadviser or amendments to its Finance Procedures designed to promote the prompt and an entity that controls, is controlled by, in order to facilitate the use by CDS accurate clearance and settlement of or is under common control with a Clearing Members of Clearstream securities transactions and, to the extent Subadviser. Banking as a triparty collateral service applicable, derivative agreements, 12. Each Subadvised Fund will provider. contracts, and transactions and to assure disclose in its registration statement the the safeguarding of securities and funds Aggregate Fee Disclosure. II. Self-Regulatory Organization’s which are in the custody or control of 13. In the event that the Commission Statement of the Purpose of, and the clearing agency or for which it is adopts a rule under the Act providing Statutory Basis for, the Proposed Rule responsible. substantially similar relief to that Change The proposed amendments are requested in the application, the In its filing with the Commission, ICE intended to extend the Clearing House’s requested order will expire on the Clear Europe included statements existing triparty collateral service to mstockstill on DSK4VPTVN1PROD with NOTICES effective date of that rule. concerning the purpose of and basis for allow optional use by Clearing Members 14. Any new Subadvisory Agreement the proposed rule change. The text of of Clearstream Banking as a triparty or any amendment to a Subadvised these statements may be examined at collateral service provider with respect Fund’s existing investment advisory the places specified in Item IV below. to initial and original margin for the agreement or Subadvisory Agreement ICE Clear Europe has prepared CDS (and FX) product categories, in that directly or indirectly results in an increase in the aggregate advisory fee 1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78q–1. rate payable by the Subadvised Fund 2 17 CFR 240.19b–4. 4 15 U.S.C. 78q–1(b)(3)(F). VerDate Sep<11>2014 18:20 May 14, 2015 Jkt 235001 PO 00000 Frm 00151 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1


Document Created: 2018-02-21 10:27:42
Document Modified: 2018-02-21 10:27:42
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice 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, as well as from certain disclosure requirements.
DatesThe application was filed on September 19, 2014, and amended on February 3, 2015, and April 3, 2015.
ContactElizabeth G. Miller, Senior Counsel, at (202) 551-8707, or Holly Hunter-Ceci, Branch Chief, at (202) 551- 6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation80 FR 28031 
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