80 FR 73262 - ETF Series Solutions and U.S. Global Investors, Inc.; Notice of Application November 18, 2015
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 226 (November 24, 2015)
Federal Register Volume 80, Issue 226 (November 24, 2015)
| Page Range | 73262-73263 | |
| FR Document | 2015-29868 |
[Federal Register Volume 80, Number 226 (Tuesday, November 24, 2015)] [Notices] [Pages 73262-73263] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-29868] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 31905; 812-14451] ETF Series Solutions and U.S. Global Investors, Inc.; Notice of Application November 18, 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 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: ETF Series Solutions (the ``Trust''), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series, and U.S. Global Investors, Inc., a Texas corporation registered as an investment adviser under the Investment Advisers Act of 1940 (``the ``Adviser,'' and, collectively with the Trust, the ``Applicants''). [[Page 73263]] Filing Dates: The application was filed April 28, 2015, and amended on September 25, 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 December 14, 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: Susan B. McGee and James L. Love, U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, TX 78229; and Michael D. Barolsky, ETF Series Solutions, 615 E. Michigan Street, Milwaukee, WI 53202. FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at (202) 551-6868, or Daniele Marchesani, 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 will serve as the investment adviser to the Funds pursuant to an investment advisory agreement with the Trust (the ``Investment Management Agreement'').\1\ The Adviser will provide the Funds with continuous and comprehensive investment management services subject to the supervision of, and policies established by, each Fund's board of trustees (``Board'').\2\ The Investment Management Agreement permits the Adviser, subject to the approval of the Board, to delegate to one or more sub-advisers (each, a ``Sub-Adviser'' and collectively, the ``Sub-Advisers'') the responsibility to provide the day-to-day portfolio investment management of each Fund, subject to the supervision and direction of the Adviser. The primary responsibility for managing the Funds will remain vested in the Adviser. The Adviser will hire, evaluate, allocate assets to and oversee the 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 any existing and any future series of the Trust and any other registered open-end management company or series thereof that: (a) Is advised by the Adviser or its successor or by a person controlling, controlled by, or under common control with the Adviser or its successor (each, also an ``Adviser''); (b) uses the manager of managers structure described in the application; and (c) complies with the terms and conditions of the application (any such series, a ``Fund'' and collectively, the ``Funds''). For purposes of the requested order, ``successor'' is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. \2\ Certain Funds (each, a ``Feeder Fund'') may invest substantially all of their assets in a ``Master Fund'' pursuant to Section 12(d)(1)(E) of the Act. --------------------------------------------------------------------------- 2. Applicants request an exemption to permit the Adviser, subject to Board approval, to hire certain Sub-Advisers pursuant to 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 Fund to disclose (as both a dollar amount and a percentage of the Fund's net assets): (a) The aggregate fees paid to the Adviser and any Wholly-Owned Sub-Advisers; and (b) the aggregate fees paid to Sub- Advisers other than Affiliated Sub-Advisers and Wholly-Owned 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, that is an affiliated person, as defined in Section 2(a)(3) of the Act, of a Fund, a Feeder Fund or the Adviser, other than by reason of serving as a sub-adviser to one or more of the Funds (``Affiliated Sub-Adviser''). A ``Wholly- Owned Sub-Adviser'' is (1) an indirect or direct ``wholly owned subsidiary'' (as such term is defined in Section 2(a)(43) of the Act) of the Adviser for that Fund, or (2) a sister company of the Adviser for that Fund that is an indirect or direct wholly-owned subsidiary of the same company that, indirectly or directly, wholly owns the 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 Fund shareholders and notification about sub- advisory changes and enhanced Board oversight to protect the interests of the Funds' 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 similar to that of individual portfolio managers, so that requiring shareholder approval of Sub- Advisory Agreements would impose unnecessary delays and expenses on the Funds. 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 Funds. For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2015-29868 Filed 11-23-15; 8:45 am] BILLING CODE 8011-01-P
![73262 Federal Register / Vol. 80, No. 226 / Tuesday, November 24, 2015 / Notices
Share for the Trusts and their respective holding a short position in shares of the inspection and copying at the principal
NAVs, do commenters agree with the Trusts over some period of time? office of the Exchange. All comments
Exchange’s assertions? Have 12. The proposal would prohibit any received will be posted without change;
commenters observed any problems holder of the Shares from lending its the Commission does not edit personal
with respect to the trading or valuation shares or from entering into an identifying information from
of FXE or FXY? For example, do agreement to repurchase the shares submissions. You should submit only
commenters believe that the markets unless the holder (a) self-reports to an information that you wish to make
prices for these products closely track agent of the sponsor of the Trusts and available publicly. All submissions
the underlying values of their (b) remits a fee to that agent equal to the should refer to File Number SR–
portfolios? sponsor’s management fee. What are NYSEArca–2015–68 and should be
7. Have commenters observed the commenters’ views regarding the policy submitted on or before December 15,
Strategy being employed with respect to implications of permitting an issuer of 2015. Rebuttal comments should be
FXE or FXY, and if so, have commenters securities to place such restrictions on submitted by December 29, 2015.
observed any deleterious effects of the the transfer of shares that it has issued
For the Commission, by the Division of
Strategy? in a public offering and that are listed
Trading and Markets, pursuant to delegated
8. The Exchange asserts that the and traded on a national securities authority.28
Strategy is not available with asset exchange? In particular, are such
Robert W. Errett,
classes other than exchange-traded restrictions consistent with Sections
6(b)(5) and 6(b)(8) of the Act? What are Deputy Secretary.
products.25 Do commenters agree with [FR Doc. 2015–29845 Filed 11–23–15; 8:45 am]
this assertion? If commenters believe commenters’ views on whether a fee
that the Strategy is available for based on self-reporting of lending or BILLING CODE 8011–01–P
exchange-traded products, do repurchase activity can be administered
commenters believe that certain in a manner consistent with Section
6(b)(5) of the Act? SECURITIES AND EXCHANGE
exchange-traded products or types of COMMISSION
Comments may be submitted by any
exchange-traded products are more
of the following methods:
susceptible to the Strategy than others?
[Investment Company Act Release No.
For example, would an exchange-traded Electronic Comments
31905; 812–14451]
product be susceptible to Management • Use the Commission’s Internet
Fee Decay if the returns on its portfolio comment form (http://www.sec.gov/ ETF Series Solutions and U.S. Global
exceeded its management fee? Does the rules/sro.shtml); or Investors, Inc.; Notice of Application
nature of the assets held by an • Send an email to rule- November 18, 2015
exchange-traded product affect its comments@sec.gov. Please include File
vulnerability to the alleged Strategy? Number SR–NYSEArca–2015–68 on the AGENCY:Securities and Exchange
9. The Exchange states that the subject line. Commission (‘‘Commission’’).
sponsor represents that, ‘‘because of
large outstanding short positions in the Paper Comments ACTION: Notice of an application under
shares . . . it is difficult to borrow • Send paper comments in triplicate Section 6(c) of the Investment Company
shares, particularly for market to Secretary, Securities and Exchange Act of 1940 (‘‘Act’’) for an exemption
participants that are not Authorized Commission, 100 F Street NE., from Section 15(a) of the Act and Rule
Participants that are seeking to engage Washington, DC 20549–1090. 18f–2 under the Act, as well as from
in short selling for trading strategies All submissions should refer to File certain disclosure requirements in Rule
other than the Strategy.’’ 26 What are Numbers SR–NYSEArca–2015–68. This 20a–1 under the Act, Item 19(a)(3) of
commenters’ views of these assertions? file number should be included on the Form N–1A, Items 22(c)(1)(ii),
10. What are the prevailing securities subject line if email is used. To help the 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
lending rates that commenters have Commission process and review your Schedule 14A under the Securities
observed for shares of FXE and FXY? Do comments more efficiently, please use Exchange Act of 1934, and Sections 6–
commenters have a view regarding only one method. The Commission will 07(2)(a), (b), and (c) of Regulation S–X
whether the Strategy is viable under post all comments on the Commission’s (‘‘Disclosure Requirements’’). The
these observed securities lending rates? Internet Web site (http://www.sec.gov/ requested exemption would permit an
rules/sro.shtml). Copies of the investment adviser to hire and replace
11. The Exchange states that,
submission, all subsequent certain sub-advisers without
according to the sponsor, ‘‘the ETF Loan
amendments, all written statements shareholder approval and grant relief
Fee is not expected to negatively affect
with respect to the proposed rule from the Disclosure Requirements as
short selling generally, but rather only
change that are filed with the they relate to fees paid to the sub-
affect certain types of short selling
Commission, and all written advisers.
activities conducted by certain market
participants (namely the Strategy) at the communications relating to the
expense of long investors.’’ 27 What are proposed rule change between the APPLICANTS: ETF Series Solutions (the
commenters’ views concerning this Commission and any person, other than ‘‘Trust’’), a Delaware statutory trust
assertion? For example, what are those that may be withheld from the registered under the Act as an open-end
commenters’ views about the effect of public in accordance with the management investment company with
multiple series, and U.S. Global
mstockstill on DSK4VPTVN1PROD with NOTICES
the proposed rule change on investors provisions of 5 U.S.C. 552, will be
who wish to express a bearish view on available for Web site viewing and Investors, Inc., a Texas corporation
either the euro or the yen, or to hedge printing in the Commission’s Public registered as an investment adviser
a long position in euros or yen, by Reference Room, 100 F Street NE., under the Investment Advisers Act of
Washington, DC 20549, on official 1940 (‘‘the ‘‘Adviser,’’ and, collectively
25 See id. at 7, 80 FR at 50703. business days between the hours of with the Trust, the ‘‘Applicants’’).
26 See id. at 8, 80 FR at 50703. 10:00 a.m. and 3:00 p.m. Copies of these
27 See id. at 16, 80 FR at 50705. filings also will be available for 28 17 CFR 200.30–3(a)(57).
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![Federal Register / Vol. 80, No. 226 / Tuesday, November 24, 2015 / Notices 73263
FILING DATES: The application was filed the Funds with continuous and enhanced Board oversight to protect the
April 28, 2015, and amended on comprehensive investment management interests of the Funds’ shareholders.
September 25, 2015. services subject to the supervision of, 4. Section 6(c) of the Act provides that
HEARING OR NOTIFICATION OF HEARING: and policies established by, each Fund’s the Commission may exempt any
An order granting the application will board of trustees (‘‘Board’’).2 The person, security, or transaction or any
be issued unless the Commission orders Investment Management Agreement class or classes of persons, securities, or
a hearing. Interested persons may permits the Adviser, subject to the transactions from any provisions of the
request a hearing by writing to the approval of the Board, to delegate to one Act, or any rule thereunder, if such
Commission’s Secretary and serving or more sub-advisers (each, a ‘‘Sub- relief is necessary or appropriate in the
applicants with a copy of the request, Adviser’’ and collectively, the ‘‘Sub- public interest and consistent with the
personally or by mail. Hearing requests Advisers’’) the responsibility to provide protection of investors and purposes
should be received by the Commission the day-to-day portfolio investment fairly intended by the policy and
by 5:30 p.m. on December 14, 2015, and management of each Fund, subject to provisions of the Act. Applicants
should be accompanied by proof of the supervision and direction of the believe that the requested relief meets
service on the applicants, in the form of Adviser. The primary responsibility for this standard because, as further
an affidavit or, for lawyers, a certificate managing the Funds will remain vested explained in the Application, the
of service. Pursuant to Rule 0–5 under in the Adviser. The Adviser will hire, Advisory Agreements will remain
the Act, hearing requests should state evaluate, allocate assets to and oversee subject to shareholder approval, while
the nature of the writer’s interest, any the Sub-Advisers, including the role of the Sub-Advisers is
facts bearing upon the desirability of a determining whether a Sub-Adviser substantially similar to that of
hearing on the matter, the reason for the should be terminated, at all times individual portfolio managers, so that
request, and the issues contested. subject to the authority of the Board. requiring shareholder approval of Sub-
Persons who wish to be notified of a 2. Applicants request an exemption to Advisory Agreements would impose
hearing may request notification by permit the Adviser, subject to Board unnecessary delays and expenses on the
writing to the Commission’s Secretary. approval, to hire certain Sub-Advisers Funds. Applicants believe that the
ADDRESSES: Secretary, U.S. Securities
pursuant to Sub-Advisory Agreements requested relief from the Disclosure
and Exchange Commission, 100 F Street and materially amend existing Sub- Requirements meets this standard
NE., Washington, DC 20549–1090. Advisory Agreements without obtaining because it will improve the Adviser’s
Applicants: Susan B. McGee and James the shareholder approval required under ability to negotiate fees paid to the Sub-
L. Love, U.S. Global Investors, Inc., 7900 Section 15(a) of the Act and Rule 18f– Advisers that are more advantageous for
Callaghan Road, San Antonio, TX 2 under the Act.3 Applicants also seek the Funds.
78229; and Michael D. Barolsky, ETF an exemption from the Disclosure For the Commission, by the Division of
Series Solutions, 615 E. Michigan Street, Requirements to permit a Fund to Investment Management, under delegated
Milwaukee, WI 53202. disclose (as both a dollar amount and a authority.
percentage of the Fund’s net assets): (a) Robert W. Errett,
FOR FURTHER INFORMATION CONTACT:
The aggregate fees paid to the Adviser Deputy Secretary.
Emerson S. Davis, Senior Counsel, at and any Wholly-Owned Sub-Advisers;
(202) 551–6868, or Daniele Marchesani, and (b) the aggregate fees paid to Sub-
[FR Doc. 2015–29868 Filed 11–23–15; 8:45 am]
Branch Chief, at (202) 551–6821 Advisers other than Affiliated Sub-
BILLING CODE 8011–01–P
(Division of Investment Management, Advisers and Wholly-Owned Sub-
Chief Counsel’s Office). Advisers; and (c) the fee paid to each
SUPPLEMENTARY INFORMATION: The Affiliated Sub-Adviser (collectively, SMALL BUSINESS ADMINISTRATION
following is a summary of the ‘‘Aggregate Fee Disclosure’’). [Disaster Declaration #14541 and #14542]
application. The complete application 3. Applicants agree that any order
may be obtained via the Commission’s granting the requested relief will be California Disaster #CA–00241
Web site by searching for the file subject to the terms and conditions
number, or an applicant using the AGENCY: U.S. Small Business
stated in the Application. Such terms
Company name box, at http:// Administration.
and conditions provide for, among other
www.sec.gov/search/search.htm or by ACTION: Notice.
safeguards, appropriate disclosure to
calling (202) 551–8090. Fund shareholders and notification SUMMARY: This is a notice of an
Summary of the Application about sub-advisory changes and Administrative declaration of a disaster
1. The Adviser will serve as the for the State of California dated 11/17/
limited to an entity that results from a
investment adviser to the Funds reorganization into another jurisdiction or a change
2015.
pursuant to an investment advisory in the type of business organization. Incident: Severe Rain, Flooding and
agreement with the Trust (the 2 Certain Funds (each, a ‘‘Feeder Fund’’) may Debris Flows.
‘‘Investment Management invest substantially all of their assets in a ‘‘Master Incident Period: 10/15/2015.
Fund’’ pursuant to Section 12(d)(1)(E) of the Act. Effective Date: 11/17/2015.
Agreement’’).1 The Adviser will provide 3 The requested relief will not extend to any Sub-
Physical Loan Application Deadline
Adviser, other than a Wholly-Owned Sub-Adviser,
1 Applicants request relief with respect to any that is an affiliated person, as defined in Section
Date: 01/19/2016.
existing and any future series of the Trust and any 2(a)(3) of the Act, of a Fund, a Feeder Fund or the Economic Injury (EIDL) Loan
other registered open-end management company or Adviser, other than by reason of serving as a sub- Application Deadline Date: 08/17/2016.
mstockstill on DSK4VPTVN1PROD with NOTICES
series thereof that: (a) Is advised by the Adviser or adviser to one or more of the Funds (‘‘Affiliated ADDRESSES: Submit completed loan
its successor or by a person controlling, controlled Sub-Adviser’’). A ‘‘Wholly-Owned Sub-Adviser’’ is
by, or under common control with the Adviser or (1) an indirect or direct ‘‘wholly owned subsidiary’’ applications to: U.S. Small Business
its successor (each, also an ‘‘Adviser’’); (b) uses the (as such term is defined in Section 2(a)(43) of the Administration, Processing and
manager of managers structure described in the Act) of the Adviser for that Fund, or (2) a sister Disbursement Center, 14925 Kingsport
application; and (c) complies with the terms and company of the Adviser for that Fund that is an Road, Fort Worth TX 76155.
conditions of the application (any such series, a indirect or direct wholly-owned subsidiary of the
‘‘Fund’’ and collectively, the ‘‘Funds’’). For same company that, indirectly or directly, wholly FOR FURTHER INFORMATION CONTACT: A.
purposes of the requested order, ‘‘successor’’ is owns the Adviser. Escobar, Office of Disaster Assistance,
VerDate Sep<11>2014 17:20 Nov 23, 2015 Jkt 238001 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 E:\FR\FM\24NON1.SGM 24NON1](https://thefederalregister.org/doc/80_FR_73488/page/2.svg)
Document Created: 2015-12-14 14:09:09
Document Modified: 2015-12-14 14:09:09
| 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 April 28, 2015, and amended on September 25, 2015. | |
| Contact | Emerson S. Davis, Senior Counsel, at (202) 551-6868, or Daniele Marchesani, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). | |
| FR Citation | 80 FR 73262 |
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