80 FR 70019 - Forum Funds and Exceed Advisory LLC; Notice of Application
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 218 (November 12, 2015)
Federal Register Volume 80, Issue 218 (November 12, 2015)
| Page Range | 70019-70021 | |
| FR Document | 2015-28694 |
[Federal Register Volume 80, Number 218 (Thursday, November 12, 2015)] [Notices] [Pages 70019-70021] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-28694] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 31893; 812-14531] Forum Funds and Exceed Advisory LLC; Notice of Application November 5, 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 in rule 20a-1 under the Act, Item 19(a)(3) of [[Page 70020]] Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, and Sections 6- 07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements''). The requested exemption would permit an investment adviser to hire and replace certain sub-advisers without shareholder approval and grant relief from the Disclosure Requirements as they relate to fees paid to the sub-advisers. ----------------------------------------------------------------------- Applicants: Forum Funds (the ``Trust''), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series, and Exceed Advisory LLC (the ``Adviser''), a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940 (together, the Trust and Adviser are ``Applicants''). Filing Dates: The application was filed on August 11, 2015, and amended on October 8, 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 November 30, 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: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: Zachary R. Tackett, Esq., Forum Funds, Three Canal Plaza, Suite 600, Portland, ME 04101, and Joseph Halpern, Exceed Advisory LLC, 28 West 44th Street, 16th Floor, New York, NY 10036. FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, at (202) 551-6812, or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090. Summary of the Application 1. The Adviser serves as the investment adviser to certain series of the Trust (the ``Series'') pursuant to an investment advisory agreement with the Trust (the ``Advisory Agreement'').\1\ The Adviser provides the Subadvised Series with continuous and comprehensive investment management services subject to the supervision of, and policies established by, each Subadvised Series' board of trustees (``Board''). The Advisory Agreement permits the Adviser, subject to the approval of the Board, to delegate to one or more Sub-Advisers the responsibility to provide the day-to-day portfolio investment management for all or a portion of the assets of each Subadvised Series, subject to the supervision and direction of the Adviser.\2\ The Adviser will continue to have overall responsibility for the management and investment of the assets of each Subadvised Series. The Adviser will hire, evaluate, allocate assets to and oversee the Sub-Advisers, including determining whether a Sub-Adviser should be terminated, at all times subject to the authority of the Board. --------------------------------------------------------------------------- \1\ Applicants request relief with respect to the named Applicants, any future Series of the Trust and any other registered open-end management company or series thereof that intends to rely on the requested order in the future and that: (a) Is advised by the Adviser or its successor or by any entity controlling, controlled by, or under common control with the Adviser or its successor (included in the term ``Adviser''); (b) uses the multi-manager structure described in the application; and (c) complies with the terms and conditions of the application (each, a ``Subadvised Series''). For purposes of the requested order, ``successor'' is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. \2\ A ``Sub-Adviser'' for a Series is (1) an indirect or direct ``wholly owned subsidiary'' (as such term is defined in section 2(a)(43) the Act) of the Adviser for that Series, or (2) a sister company of the Adviser for that Series that is an indirect or direct wholly owned subsidiary of the same company that, indirectly or directly, wholly owns the Adviser (each of (1) and (2) a ``Wholly- Owned Sub-Adviser'' and collectively, the ``Wholly-Owned Sub- Advisers''), or (3) an investment sub-adviser for that Series that is not an ``affiliated person'' (as such term is defined in section 2(a)(3) of the Act) of the Series or the Adviser, except to the extent that an affiliation arises solely because the sub-adviser serves as a sub-adviser to one or more Series (each a ``Non- Affiliated Sub-Adviser'' and collectively, the ``Non-Affiliated Sub- Advisers''). --------------------------------------------------------------------------- 2. Applicants request an exemption to permit the Adviser, subject to Board approval, to hire Sub-Advisers pursuant to investment sub- advisory agreements (``Sub-Advisory Agreements'') and materially amend existing Sub-Advisory Agreements without obtaining the shareholder approval required under section 15(a) of the Act and rule 18f-2 under the Act.\3\ Applicants also seek an exemption from the Disclosure Requirements to permit a Subadvised Series to disclose (as both a dollar amount and a percentage of the Subadvised Series' net assets): (a) The aggregate fees paid to the Adviser and any Wholly-Owned Sub- Advisers; (b) the aggregate fees paid to Non-Affiliated Sub-Advisers; and (c) the fee paid to each Affiliated Sub-Adviser (collectively, ``Aggregate Fee Disclosure''). --------------------------------------------------------------------------- \3\ The requested relief will not extend to any sub-adviser, other than a Wholly-Owned Sub-Adviser, who is an affiliated person, as defined in section 2(a)(3) of the Act, of the Subadvised Series or the Adviser, other than by reason of serving as a sub-adviser to one or more of the Subadvised Series (``Affiliated Sub-Adviser''). --------------------------------------------------------------------------- 3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the application. Such terms and conditions provide for, among other safeguards, appropriate disclosure to Subadvised Series' shareholders and notification about sub-advisory changes and enhanced Board oversight to protect the interests of the Subadvised Series' shareholders. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or any rule thereunder, if such relief is necessary or appropriate in the public interest and consistent with the protection of investors and purposes fairly intended by the policy and provisions of the Act. Applicants believe that the requested relief meets this standard because, as further explained in the application, the Advisory Agreements will remain subject to shareholder approval, while the role of the Sub-Advisers is substantially equivalent to that of individual portfolio managers, so that requiring shareholder approval of Sub- Advisory Agreements would impose unnecessary delays and expenses on the Subadvised Series. Applicants believe that the requested relief from the Disclosure Requirements meets this standard because it will improve the Adviser's ability to negotiate fees paid to the Sub-Advisers that are more advantageous for the Subadvised Series. [[Page 70021]] For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2015-28694 Filed 11-10-15; 8:45 am] BILLING CODE 8011-01-P
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from sections 18(c) and 18(i) to permit impose EWCs on shares of the Funds of its shares through asset-based
the Funds to issue multiple classes of submitted for repurchase that have been distribution fees.
shares. held for less than a specified period. For the reasons stated above,
4. Applicants submit that the 5. Applicants state that the EWCs they applicants submit that the exemptions
proposed allocation of expenses relating intend to impose are functionally requested under section 6(c) are
to distribution and voting rights among similar to CDSLs imposed by open-end necessary and appropriate in the public
multiple classes is equitable and will investment companies under rule 6c–10 interest and are consistent with the
not discriminate against any group or under the Act. Rule 6c–10 permits open- protection of investors and the purposes
class of shareholders. Applicants submit end investment companies to impose fairly intended by the policy and
that the proposed arrangements would CDSLs, subject to certain conditions. provisions of the Act. Applicants further
permit a Fund to facilitate the Applicants note that rule 6c–10 is submit that the relief requested
distribution of its shares and provide grounded in policy considerations pursuant to section 23(c)(3) will be
investors with a broader choice of supporting the employment of CDSLs consistent with the protection of
shareholder services. Applicants assert where there are adequate safeguards for investors and will insure that applicants
that the proposed closed-end the investor and state that the same do not unfairly discriminate against any
investment company multiple class policy considerations support holders of the class of securities to be
structure does not raise the concerns imposition of EWCs in the interval fund purchased. Finally, applicants state that
underlying section 18 of the Act to any context. In addition, applicants state the Funds’ imposition of asset-based
greater degree than open-end that EWCs may be necessary for the distribution fees is consistent with the
investment companies’ multiple class distributor to recover distribution costs. provisions, policies and purposes of the
structures that are permitted by rule Applicants represent that any EWC Act and does not involve participation
18f–3 under the Act. Applicants state imposed by the Funds will comply with on a basis different from or less
that each Fund will comply with the rule 6c–10 under the Act as if the rule advantageous than that of other
provisions of rule 18f–3 as if it were an were applicable to closed-end participants.
open-end investment company. investment companies. The Funds will Applicants’ Condition
Early Withdrawal Charges disclose EWCs in accordance with the
requirements of Form N–1A concerning Applicants agree that any order
1. Section 23(c) of the Act provides, granting the requested relief will be
in relevant part, that no registered CDSLs.
subject to the following condition:
closed-end investment company shall Asset-Based Distribution Fees Each Fund relying on the order will
purchase securities of which it is the comply with the provisions of rules 6c–
issuer, except: (a) On a securities 1. Section 17(d) of the Act and rule
17d–1 under the Act prohibit an 10, 12b–1, 17d–3, 18f–3, 22d–1, and,
exchange or other open market; (b) where applicable, 11a–3 under the Act,
pursuant to tenders, after reasonable affiliated person of a registered
investment company, or an affiliated as amended from time to time, as if
opportunity to submit tenders given to those rules applied to closed-end
all holders of securities of the class to person of such person, acting as
principal, from participating in or management investment companies,
be purchased; or (c) under other and will comply with the NASD Sales
circumstances as the Commission may effecting any transaction in connection
with any joint enterprise or joint Charge Rule, as amended from time to
permit by rules and regulations or time, as if that rule applied to all closed-
orders for the protection of investors. arrangement in which the investment
company participates unless the end management investment
2. Rule 23c–3 under the Act permits
Commission issues an order permitting companies.
a registered closed-end investment
company (an ‘‘interval fund’’) to make the transaction. In reviewing For the Commission, by the Division of
repurchase offers of between five and applications submitted under section Investment Management, under delegated
17(d) and rule 17d–1, the Commission authority.
twenty-five percent of its outstanding
shares at net asset value at periodic considers whether the participation of Robert W. Errett,
intervals pursuant to a fundamental the investment company in a joint Deputy Secretary.
policy of the interval fund. Rule 23c– enterprise or joint arrangement is [FR Doc. 2015–28696 Filed 11–10–15; 8:45 am]
3(b)(1) under the Act permits an interval consistent with the provisions, policies BILLING CODE 8011–01–P
fund to deduct from repurchase and purposes of the Act, and the extent
proceeds only a repurchase fee, not to to which the participation is on a basis
exceed two percent of the proceeds, that different from or less advantageous than SECURITIES AND EXCHANGE
is paid to the interval fund and is that of other participants. COMMISSION
reasonably intended to compensate the 2. Rule 17d–3 under the Act provides [Investment Company Act Release No.
fund for expenses directly related to the an exemption from section 17(d) and 31893; 812–14531]
repurchase. rule 17d–1 to permit open-end
3. Section 23(c)(3) provides that the investment companies to enter into Forum Funds and Exceed Advisory
Commission may issue an order that distribution arrangements pursuant to LLC; Notice of Application
would permit a closed-end investment rule 12b–1 under the Act. Applicants
company to repurchase its shares in request an order under section 17(d) and November 5, 2015.
circumstances in which the repurchase rule 17d–1 under the Act to the extent AGENCY: Securities and Exchange
Commission (‘‘Commission’’).
mstockstill on DSK4VPTVN1PROD with NOTICES
is made in a manner or on a basis that necessary to permit the Fund to impose
does not unfairly discriminate against asset-based distribution fees. Applicants ACTION: Notice of an application under
any holders of the class or classes of have agreed to comply with rules 12b– section 6(c) of the Investment Company
securities to be purchased. 1 and 17d–3 as if those rules applied to Act of 1940 (‘‘Act’’) for an exemption
4. Applicants request relief under closed-end investment companies, from section 15(a) of the Act and rule
section 6(c), discussed above, and which they believe will resolve any 18f–2 under the Act, as well as from
section 23(c)(3) from rule 23c–3 to the concerns that might arise in connection certain disclosure requirements in rule
extent necessary for the Funds to with a Fund financing the distribution 20a-1 under the Act, Item 19(a)(3) of
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![Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices 70021
For the Commission, by the Division of these services. The text of the proposed vendor to provide a wireless connection
Investment Management, under delegated rule change is available on the to the Third Party Data through wireless
authority. Exchange’s Web site at www.nyse.com, connections from the Exchange access
Robert W. Errett, at the principal office of the Exchange, centers in Secaucus and Carteret, New
Deputy Secretary. and at the Commission’s Public Jersey, to its data center in Mahwah,
[FR Doc. 2015–28694 Filed 11–10–15; 8:45 am] Reference Room. New Jersey, through a series of towers
BILLING CODE 8011–01–P
II. Self-Regulatory Organization’s equipped with wireless equipment.6
Statement of the Purpose of, and The wireless connectivity would be an
Statutory Basis for, the Proposed Rule optional offering, offering an alternative
SECURITIES AND EXCHANGE method for connectivity to the Third
Change
COMMISSION Party Data.
In its filing with the Commission, the
[Release No. 34–76374; File No. SR–NYSE– self-regulatory organization included A User that chooses this optional
2015–52] service would be able to receive data
statements concerning the purpose of,
and basis for, the proposed rule change feeds from NASDAQ and BATS
Self-Regulatory Organizations; New Exchange, Inc. over a wireless
York Stock Exchange LLC; Notice of and discussed any comments it received
on the proposed rule change. The text connection. To receive Third Party Data,
Filing of Proposed Rule Change to the the User would enter into a contract
Co-Location Services Offered by the of those statements may be examined at
the places specified in Item IV below. with the relevant third party market,
Exchange (the Offering of a Wireless which would charge the User the
Connection To Allow Users To Receive The Exchange has prepared summaries,
set forth in sections A, B, and C below, applicable market data fees for the Third
Market Data Feeds From Third Party Party Data. The Exchange would charge
of the most significant parts of such
Markets) and To Reflect Changes to the User fees for the wireless connection
statements.
the Exchange’s Price List Related to
for the Third Party Data.7
These Services A. Self-Regulatory Organization's
Statement of the Purpose of, and A User would be charged a $5,000
November 5, 2015. Statutory Basis for, the Proposed Rule non-recurring initial charge for each
Pursuant to Section 19(b)(1) 1 of the Change wireless connection and a monthly
Securities Exchange Act of 1934 (the recurring charge (‘‘MRC’’) that would
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 1. Purpose vary depending upon the feed that the
notice is hereby given that, on October The Exchange proposes to change the User opts to receive. If a User purchased
23, 2015, New York Stock Exchange co-location 4 services offered by the two wireless connections, it would pay
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed Exchange to include a means for Users two non-recurring initial charges. The
with the Securities and Exchange to receive market data feeds from third Exchange proposes to waive the first
Commission (the ‘‘Commission’’) the party markets (the ‘‘Third Party Data’’) month’s MRC, to allow Users to test the
proposed rule change as described in through a wireless connection.5 In receipt of the feed(s) for a month before
Items I, II, and III below, which Items addition, this proposed rule change incurring any MRCs.
have been prepared by the self- reflects changes to the Exchange’s Price
The Exchange proposes that the
regulatory organization. The List related to these co-location services.
wireless connections would include the
Commission is publishing this notice to The Exchange proposes to offer the
wireless connection to provide Users use of one port for connectivity to the
solicit comments on the proposed rule
with an alternative means of Third Party Data. A User will only
change from interested persons.
connectivity for Third Party Data. require one port to connect to the Third
I. Self-Regulatory Organization’s Wireless connections involve beaming Party Data, irrespective of how many of
Statement of the Terms of Substance of signals through the air between the five wireless connections it orders.
the Proposed Rule Change antennas that are within sight of one If a User that has more than one wireless
The Exchange proposes to change the another. Because the signals travel a connection wishes to use more than one
co-location services offered by the straight, unimpeded line, and because port to connect to the Third Party Data,8
Exchange to include a means for co- light waves travel faster through air than the Exchange proposes to make such
located Users to receive market data through glass (fiber optics), wireless additional ports available for a monthly
feeds from third party markets through messages have lower latency than fee per port of $3,000.
a wireless connection. In addition, the messages travelling through fiber optics. The Exchange proposes to revise its
proposed rule change reflects changes to Under the proposed rule change, the Price List to reflect fees related to these
the Exchange’s Price List related to Exchange would utilize a network connections and ports, as follows:
1 15 U.S.C. 78s(b)(1). from the Exchange. See Securities Exchange Act 119) (approving a proposed rule change to establish
2 15 U.S.C. 78a. Release No. 76008 (September 29, 2015), 80 FR a new optional wireless connectivity for collocated
3 17 CFR 240.19b–4. 60190 (October 5, 2015) (SR–NYSE–2015–40). As clients).
4 The Exchange initially filed rule changes specified in the Price List, a User that incurs co- 7 A User would only receive the Third Party Data
relating to its co-location services with the location fees for a particular co-location service for which it had entered into a contract. For
Securities and Exchange Commission pursuant thereto would not be subject to co-location example, a User that contracted with NASDAQ for
mstockstill on DSK4VPTVN1PROD with NOTICES
(‘‘Commission’’) in 2010. See Securities Exchange fees for the same co-location service charged by the the NASDAQ Totalview-ITCH data feed but did not
Act Release No. 62960 (September 21, 2010), 75 FR Exchange’s affiliates NYSE MKT LLC and NYSE contract to receive any other Third Party Data
59310 (September 27, 2010) (SR–NYSE–2010–56). Arca, Inc. See Securities Exchange Act Release No. would receive only the NASDAQ Totalview-ITCH
The Exchange operates a data center in Mahwah, 70206 (August 15, 2013), 78 FR 51765 (August 21, data feed through its wireless connection.
New Jersey (the ‘‘data center’’) from which it 2013) (SR–NYSE–2013–59). 8 For example, a User with two wireless
provides co-location services to Users. 6 The NASDAQ Stock Market LLC (‘‘NASDAQ’’) connections for Third Party Data may opt to
5 For purposes of the Exchange’s co-location offers a similar wireless service. See Securities purchase an additional port in order to route the
services, a ‘‘User’’ means any market participant Exchange Act Release No. 68735 (January 25, 2013), options and equity data it receives to different
that requests to receive co-location services directly 78 FR 6842 (January 31, 2013) (SR–NASDAQ–2012– cabinets.
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Document Created: 2015-12-14 14:53:49
Document Modified: 2015-12-14 14:53:49
| 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 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 in rule 20a-1 under the Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, and Sections 6- 07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements''). The requested exemption would permit an investment adviser to hire and replace certain sub-advisers without shareholder approval and grant relief from the Disclosure Requirements as they relate to fees paid to the sub-advisers. | |
| Dates | The application was filed on August 11, 2015, and amended on October 8, 2015. | |
| Contact | Courtney S. Thornton, Senior Counsel, at (202) 551-6812, or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). | |
| FR Citation | 80 FR 70019 |
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