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, Number 218 (Thursday, November 12, 2015)]
[Notices]
[Pages 70019-70021]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28694]


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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.

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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.
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    \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'').
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    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'').
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    \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'').
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    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the application. 
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