81 FR 24916 - ABS Long/Short Strategies Fund and ABS Investment Management LLC; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 81 (April 27, 2016)

Page Range		24916-24919
FR Document		2016-09715
Federal Register, Volume 81 Issue 81 (Wednesday, April 27, 2016)
[Federal Register Volume 81, Number 81 (Wednesday, April 27, 2016)]
[Notices]
[Pages 24916-24919]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-09715]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32090; File No. 812-14587]


ABS Long/Short Strategies Fund and ABS Investment Management LLC; 
Notice of Application

April 21, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from sections 18(c) 
and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for 
an exemption

[[Page 24917]]

from rule 23c-3 under the Act, and for an order pursuant to section 
17(d) of the Act and rule 17d-1 under the Act.

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Summary of Application:  Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of shares and to impose asset-based distribution fees and early 
withdrawal charges (``EWCs'').

Applicants:  ABS Long/Short Strategies Fund (the ``Fund'') and ABS 
Investment Management LLC (the ``Adviser'').

Filing Dates:  The application was filed on December 10, 2015 and 
amended April 1, 2016.

Hearing or Notification of Hearing:  An order granting the requested 
relief 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 May 17, 2016, 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: ABS Long/Short 
Strategies Fund and ABS Investment Management LLC, c/o Edward C. 
Lawrence, Esq., Bernstein Shur, 100 Middle Street NW., Portland, ME 
04104-5029.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at 
(202) 551-8811, 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 for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. The Fund is a Delaware statutory trust that is registered under 
the Act as a non-diversified, closed-end management investment company. 
The Fund's investment objective is to seek capital appreciation over a 
full market cycle while maintaining a lower level of volatility when 
compared to the global equity markets.
    2. The Adviser is a Delaware limited liability company and is 
registered as an investment adviser under the Investment Advisers Act 
of 1940. The Adviser serves as investment adviser to the Fund.
    3. The applicants seek an order to permit the Fund to issue 
multiple classes of shares, each having its own fee and expense 
structure, and to impose asset-based distribution fees and EWCs.
    4. Applicants request that the order also apply to any 
continuously-offered registered closed-end management investment 
company that may be organized in the future for which the Adviser or 
any entity controlling, controlled by, or under common control with the 
Adviser, or any successor in interest to any such entity,\1\ acts as 
investment adviser and which operates as an interval fund pursuant to 
rule 23c-3 under the Act or provides periodic liquidity with respect to 
its shares pursuant to rule 13e-4 under the Securities Exchange Act of 
1934 (``Exchange Act'') (each, a ``Future Fund'' and together with the 
Fund, the ``Funds'').\2\
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    \1\ A successor in interest is limited to an entity that results 
from a reorganization into another jurisdiction or a change in the 
type of business organization.
    \2\ Any Fund relying on this relief in the future will do so in 
a manner consistent with the terms and conditions of the 
application. Applicants represent that each entity presently 
intending to rely on the requested relief is listed as an applicant.
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    5. The Fund is currently making a continuous public offering of its 
common shares (``Founders' Shares''). Applicants state that additional 
offerings by any Fund relying on the order may be on a private 
placement or public offering basis. Shares of the Funds will not be 
listed on any securities exchange, nor quoted on any quotation medium. 
The Funds do not expect there to be a secondary trading market for 
their shares.
    6. If the requested relief is granted, the Fund intends to 
continuously offer at least one additional class of shares 
(``Institutional Shares'') and may also offer additional classes of 
shares in the future. Because of the different distribution fees, 
services and any other class expenses that may be attributable to a 
class of a Fund's shares, the net income attributable to, and the 
dividends payable on, each class of shares may differ from each other.
    7. Applicants state that, from time to time, the Fund may create 
additional classes of shares, the terms of which may differ from the 
Founders' Shares and Institutional Shares in the following respects: 
(i) The amount of fees permitted by different distribution plans or 
different service fee arrangements; (ii) voting rights with respect to 
a distribution plan of a class; (iii) different class designations; 
(iv) the impact of any class expenses directly attributable to a 
particular class of shares allocated on a class basis as described in 
the application; (v) any differences in dividends and net asset value 
resulting from differences in fees under a distribution plan or in 
class expenses; (vi) any EWC or other sales load structure; and (vii) 
exchange or conversion privileges of the classes as permitted under the 
Act.
    8. Applicants state that the Fund may provide periodic liquidity 
with respect to its shares pursuant to rule 13e-4 under the Exchange 
Act.\3\ A Future Fund may adopt a fundamental investment policy to 
repurchase a specified percentage of its shares in compliance with rule 
23c-3 and make quarterly repurchase offers to its shareholders or 
provide periodic liquidity with respect to its shares pursuant to rule 
13e-4 under the Exchange Act. Any repurchase offers made by the Funds 
will be made to all holders of shares of each such Fund.
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    \3\ Applicants submit that rule 23c-3 and Regulation M under the 
Exchange Act permit an interval fund to make repurchase offers to 
repurchase its shares while engaging in a continuous offering of its 
shares pursuant to Rule 415 under the Securities Act of 1933.
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    9. Applicants represent that any asset-based service and 
distribution fees for each class of shares will comply with the 
provisions of NASD Rule 2830(d) (``NASD Sales Charge Rule'').\4\ 
Applicants also represent that each Fund will disclose in its 
prospectus the fees, expenses and other characteristics of each class 
of shares offered for sale by the prospectus, as is required for open-
end multiple class funds under Form N-1A. As is required for open-end 
funds, each Fund will disclose its expenses in shareholder reports, and 
describe any arrangements that result in breakpoints in or elimination 
of sales loads in its prospectus.\5\ In addition,

[[Page 24918]]

applicants will comply with applicable enhanced fee disclosure 
requirements for fund of funds, including registered funds of hedge 
funds.\6\
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    \4\ Any reference to the NASD Sales Charge Rule includes any 
successor or replacement rule that may be adopted by the Financial 
Industry Regulatory Authority (``FINRA'').
    \5\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring 
open-end investment companies to disclose fund expenses in 
shareholder reports); and Disclosure of Breakpoint Discounts by 
Mutual Funds, Investment Company Act Release No. 26464 (June 7, 
2004) (adopting release) (requiring open-end investment companies to 
provide prospectus disclosure of certain sales load information).
    \6\ Fund of Funds Investments, Investment Company Act Rel. Nos. 
26198 (Oct. 1, 2003) (proposing release) and 27399 (Jun. 20, 2006) 
(adopting release). See also Rules 12d1-1, et seq. of the Act.
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    10. Each of the Funds will comply with any requirements that the 
Commission or FINRA may adopt regarding disclosure at the point of sale 
and in transaction confirmations about the costs and conflicts of 
interest arising out of the distribution of open-end investment company 
shares, and regarding prospectus disclosure of sales loads and revenue 
sharing arrangements, as if those requirements applied to the Fund. In 
addition, each Fund will contractually require that any distributor of 
the Fund's shares comply with such requirements in connection with the 
distribution of such Fund's shares.
    11. Each Fund will allocate all expenses incurred by it among the 
various classes of shares based on the net assets of the Fund 
attributable to each class, except that the net asset value and 
expenses of each class will reflect distribution fees, service fees, 
and any other incremental expenses of that class. Expenses of the Fund 
allocated to a particular class of shares will be borne on a pro rata 
basis by each outstanding share of that class. Applicants state that 
each Fund will comply with the provisions of rule 18f-3 under the Act 
as if it were an open-end investment company.
    12. Applicants state that each Fund may impose an EWC on shares 
submitted for repurchase that have been held less than a specified 
period and may waive the EWC for certain categories of shareholders or 
transactions to be established from time to time. Applicants state that 
each of the Funds will apply the EWC (and any waivers, scheduled 
variations, or eliminations of the EWC) uniformly to all shareholders 
in a given class and consistently with the requirements of rule 22d-1 
under the Act as if the Funds were open-end investment companies.
    13. Each Fund operating as an interval fund pursuant to rule 23c-3 
under the Act may offer its shareholders an exchange feature under 
which the shareholders of the Fund may, in connection with the Fund's 
periodic repurchase offers, exchange their shares of the Fund for 
shares of the same class of (i) registered open-end investment 
companies or (ii) other registered closed-end investment companies that 
comply with rule 23c-3 under the Act and continuously offer their 
shares at net asset value, that are in the Fund's group of investment 
companies (collectively, ``Other Funds''). Shares of a Fund operating 
pursuant to rule 23c-3 that are exchanged for shares of Other Funds 
will be included as part of the amount of the repurchase offer amount 
for such Fund as specified in rule 23c-3 under the Act. Any exchange 
option will comply with rule 11a-3 under the Act, as if the Fund were 
an open-end investment company subject to rule 11a-3. In complying with 
rule 11a-3, each Fund will treat an EWC as if it were a contingent 
deferred sales load (``CDSL'').

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the creation of 
multiple classes of shares of the Funds may be prohibited by section 
18(c), as a class may have priority over another class as to payment of 
dividends because shareholders of different classes would pay different 
fees and expenses.
    2. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that multiple classes of shares of the Funds 
may violate section 18(i) of the Act because each class would be 
entitled to exclusive voting rights with respect to matters solely 
related to that class.
    3. 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 provision of the Act, or from any 
rule or regulation under the Act, if and to the extent such 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 request an exemption under 
section 6(c) from sections 18(c) and 18(i) to permit the Funds to issue 
multiple classes of shares.
    4. Applicants submit that the proposed allocation of expenses 
relating to distribution and voting rights among multiple classes is 
equitable and will not discriminate against any group or class of 
shareholders. Applicants submit that the proposed arrangements would 
permit a Fund to facilitate the distribution of its shares and provide 
investors with a broader choice of shareholder services. Applicants 
assert that the proposed closed-end investment company multiple class 
structure does not raise the concerns underlying section 18 of the Act 
to any greater degree than open-end investment companies' multiple 
class structures that are permitted by rule 18f-3 under the Act. 
Applicants state that each Fund will comply with the provisions of rule 
18f-3 as if it were an open-end investment company.

Early Withdrawal Charges

    1. Section 23(c) of the Act provides, in relevant part, that no 
registered closed-end investment company shall purchase securities of 
which it is the issuer, except: (a) On a securities exchange or other 
open market; (b) pursuant to tenders, after reasonable opportunity to 
submit tenders given to all holders of securities of the class to be 
purchased; or (c) under other circumstances as the Commission may 
permit by rules and regulations or orders for the protection of 
investors.
    2. Rule 23c-3 under the Act permits a registered closed-end 
investment company (an ``interval fund'') to make repurchase offers of 
between five and twenty-five percent of its outstanding shares at net 
asset value at periodic intervals pursuant to a fundamental policy of 
the interval fund. Rule 23c-3(b)(1) under the Act permits an interval 
fund to deduct from repurchase proceeds only a repurchase fee, not to 
exceed two percent of the proceeds, that is paid to the interval fund 
and is reasonably intended to compensate the fund for expenses directly 
related to the repurchase.
    3. Section 23(c)(3) provides that the Commission may issue an order 
that would permit a closed-end investment company to repurchase its 
shares in circumstances in which the repurchase is made in a manner or 
on a basis that does not unfairly discriminate against any holders of 
the class or classes of securities to be purchased.
    4. Applicants request relief under section 6(c), discussed above, 
and section 23(c)(3) from rule 23c-3 to the extent necessary for the 
Funds to impose EWCs on shares of the Funds submitted for repurchase 
that have been held for less than a specified period.
    5. Applicants state that the EWCs they intend to impose are 
functionally similar to CDSLs imposed by open-end investment companies 
under rule 6c-10

[[Page 24919]]

under the Act. Rule 6c-10 permits open-end investment companies to 
impose CDSLs, subject to certain conditions. Applicants note that rule 
6c-10 is grounded in policy considerations supporting the employment of 
CDSLs where there are adequate safeguards for the investor and state 
that the same policy considerations support imposition of EWCs in the 
interval fund context. In addition, applicants state that EWCs may be 
necessary for the distributor to recover distribution costs. Applicants 
represent that any EWC imposed by the Funds will comply with rule 6c-10 
under the Act as if the rule were applicable to closed-end investment 
companies. The Funds will disclose EWCs in accordance with the 
requirements of Form N-1A concerning CDSLs.

Asset-Based Distribution Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company, or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to the extent necessary to permit the Funds to impose asset-
based distribution fees. Applicants have agreed to comply with rules 
12b-1 and 17d-3 as if those rules applied to closed-end investment 
companies, which they believe will resolve any concerns that might 
arise in connection with a Fund financing the distribution of its 
shares through asset-based distribution fees.
    3. For the reasons stated above, applicants submit that the 
exemptions requested under section 6(c) are necessary and appropriate 
in the public interest and are consistent with the protection of 
investors and the purposes fairly intended by the policy and provisions 
of the Act. Applicants further submit that the relief requested 
pursuant to section 23(c)(3) will be consistent with the protection of 
investors and will insure that applicants do not unfairly discriminate 
against any holders of the class of securities to be purchased. 
Finally, applicants state that the Funds' imposition of asset-based 
distribution fees is consistent with the provisions, policies and 
purposes of the Act and does not involve participation on a basis 
different from or less advantageous than that of other participants.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Each Fund relying on the order will comply with the provisions of 
rules 6c-10, 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3 
under the Act, as amended from time to time, as if those rules applied 
to closed-end management investment companies, and will comply with the 
NASD Sales Charge Rule, as amended from time to time, as if that rule 
applied to all closed-end management investment companies.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016-09715 Filed 4-26-16; 8:45 am]
BILLING CODE 8011-01-P
24916 Federal Register / Vol. 81, No. 81 / Wednesday, April 27, 2016 / Notices

waitlist.19 Specifically, the initial and Commission finds that the proposed having cabinets in non-contiguous
monthly charge for two bundles of 24 rule change, as modified by Amendment spaces by removing the cost that those
cross connects will be waived for a User No. 1, is consistent with Section 6(b)(4) Users would otherwise avoid if a cage
that is waitlisted for a cage for the of the Act,29 which requires that the were available.
duration of the waitlist period, provided rules of a national securities exchange The Commission also finds the
that the cross connects may only be provide for the equitable allocation of proposed amendments to the visitor
used to connect the User’s non- reasonable dues, fees and other charges security escort fee consistent with
contiguous cabinets.20 The charge will among its members and issuers and Sections 6(b)(4) and 6(b)(5) of the Act.
no longer be waived once a User is other persons using its facilities, and The Exchange represents that a security
removed from the waitlist.21 In addition, with Section 6(b)(5) of the Act,30 which escort is not needed when a User visits
a User that is removed from the waitlist requires, among other things, that the its own cage because that User would
but subsequently requests a cage will be rules of a national securities exchange have access only to its own cabinets
added back to the bottom of the waitlist, be designed to promote just and locked within its own cage,31 and will
provided that, if the User was removed equitable principles of trade, to remove not have access to the cabinets of other
from the waitlist because it turned down impediments to and perfect the Users or Exchange equipment, which
a cage that is the size that it requested, mechanism of a free and open market are locked as well.32 In addition, the
it will not receive a second waiver of the and a national market system and, in proposed rate of $75/visit for the visitor
charge.22 general, to protect investors and the security escort would be a fee reduction
public interest, and not be designed to for any visit that lasted more than an
Visitor Security Escorts permit unfair discrimination between hour, and so it would reduce the burden
The Exchange also proposes to amend customers, issuers, brokers, or dealers. placed on Users that remain subject to
its visitor security escort fee. Currently, The Commission believes that the the fee. Therefore, the Commission finds
a User visiting its cabinet(s) in the Data proposed procedures for the allocation the proposed amendments to the visitor
Center is required to pay a $75/hour fee of cages to its co-located Users and security escort fee to be reasonable,
for a security escort.23 The Exchange associated waiver of fees subject to equitable, and not unfairly
proposes to eliminate this fee for Users specified conditions are consistent with discriminatory.
visiting their own cage in the Data Sections 6(b)(4) and 6(b)(5) of the Act. For the foregoing reasons, the
Center,24 and change the fee for those In particular, the Commission believes Commission finds that the proposed
that the proposed cage allocation and rule change, as modified by Amendment
not visiting their own cage from $75/
waitlist procedures are reasonably No. 1, is consistent with the Act.
hour to $75/visit.25 The Exchange states
designed to assist the Exchange in
that a security escort is not needed VII. Conclusion
offering cages to current and future
when a User visits its own cage because It is therefore ordered, pursuant to
Users in the Data Center on terms that
that User would have access only to its Section 19(b)(2) of the Act,33 that the
are equitable and not unfairly
own cabinets locked within its own proposed rule change, as modified by
discriminatory in the event that
cage,26 and that User will not have Amendment No.1, (File No. SR–NYSE–
available open contiguous space in the
access to the cabinets of other Users or 2016–13) be, and hereby is, approved.
Data Center is not sufficient to house a
Exchange equipment, which are locked
newly requested cage or sufficiently For the Commission, by the Division of
as well.27
limited that the Exchange cannot both Trading and Markets, pursuant to delegated
III. Discussion and Commission provide new cages and satisfy all User authority.34
Findings demand for other co-location services. Brent J. Fields,
The Commission further believes that Secretary.
After careful review and the proposal to waive the initial and [FR Doc. 2016–09724 Filed 4–26–16; 8:45 am]
consideration of the Exchange’s monthly fee for two bundles of 24 cross
proposal, the Commission finds that the BILLING CODE 8011–01–P
connects between a User’s non-
proposed rule change, as modified by contiguous cabinets while a User is on
Amendment No. 1, is consistent with the waitlist is consistent with the Act. SECURITIES AND EXCHANGE
the requirements of the Act and the Users can qualify for the fee waiver by COMMISSION
rules and regulations thereunder requesting a cage and being placed on
applicable to a national securities the waitlist until a cage becomes
[Investment Company Act Release No.
exchange.28 In particular, the 32090; File No. 812–14587]
available to them. Once the Exchange
19 See id.
offers the requested size cage to a User ABS Long/Short Strategies Fund and
20 See id. through the allocation procedure or ABS Investment Management LLC;
21 As noted above, a User that turns down a cage when a User is removed from the Notice of Application
because it is not the correct size will remain on the waitlist, the fee would no longer be
waitlist. A User that requests to be removed or that waived. In addition, if a User was April 21, 2016.
turns down a cage that is the size that it requested
removed from the waitlist because it AGENCY: Securities and Exchange
will be removed from the waitlist. See supra note Commission (‘‘Commission’’).
17 and accompanying text. turned down a cage that was the size
22 See Notice, 81 FR at 13000. that it requested, it would not receive a ACTION: Notice of an application under
23 See id. second waiver of the charge. The section 6(c) of the Investment Company
asabaliauskas on DSK3SPTVN1PROD with NOTICES

24 See id. The Exchange is also making a technical
Commission believes that the proposed Act of 1940 (the ‘‘Act’’) for an
change to the Price List visitor fee to add clarity. fee waiver and associated conditions are exemption from sections 18(c) and 18(i)
See id.
25 See id. The Exchange stated that many of the
reasonably designed to alleviate the of the Act, under sections 6(c) and
escorted visits lasted an hour or less. See id. inconvenience for waitlisted Users of 23(c)(3) of the Act for an exemption
26 See id.
31 See supra notes 26–27 and accompanying text.
27 See id. efficiency, competition, and capital formation. See
28 In approving this proposed rule change, as 15 U.S.C. 78c(f). 32 See id.
29 15 U.S.C. 78f(b)(4). 33 15 U.S.C. 78s(b)(2).
modified by Amendment No. 1, the Commission
has considered the proposed rule’s impact on 30 15 U.S.C. 78f(b)(5). 34 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 17:29 Apr 26, 2016 Jkt 238001 PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 E:\FR\FM\27APN1.SGM 27APN1
Federal Register / Vol. 81, No. 81 / Wednesday, April 27, 2016 / Notices 24919

under the Act. Rule 6c–10 permits open- fairly intended by the policy and change as described in Items I, II, and
end investment companies to impose provisions of the Act. Applicants further III below, which Items have been
CDSLs, subject to certain conditions. submit that the relief requested prepared by the self-regulatory
Applicants note that rule 6c–10 is pursuant to section 23(c)(3) will be organization. The Commission is
grounded in policy considerations consistent with the protection of publishing this notice to solicit
supporting the employment of CDSLs investors and will insure that applicants comments on the proposed rule change
where there are adequate safeguards for do not unfairly discriminate against any from interested persons.
the investor and state that the same holders of the class of securities to be
policy considerations support purchased. Finally, applicants state that I. Self-Regulatory Organization’s
imposition of EWCs in the interval fund the Funds’ imposition of asset-based Statement of the Terms of Substance of
context. In addition, applicants state distribution fees is consistent with the the Proposed Rule Change
that EWCs may be necessary for the provisions, policies and purposes of the The Exchange proposes to adopt
distributor to recover distribution costs. Act and does not involve participation initial and continued listing standards
Applicants represent that any EWC on a basis different from or less for the listing of Equity Investment
imposed by the Funds will comply with advantageous than that of other Tracking Stocks. The Exchange also
rule 6c–10 under the Act as if the rule participants. proposes to adopt listing fees specific to
were applicable to closed-end Equity Investment Tracking Stocks. The
Applicants’ Condition
investment companies. The Funds will proposed rule change is available on the
disclose EWCs in accordance with the Applicants agree that any order Exchange’s Web site at www.nyse.com,
requirements of Form N–1A concerning granting the requested relief will be at the principal office of the Exchange,
CDSLs. subject to the following condition: and at the Commission’s Public
Each Fund relying on the order will Reference Room.
Asset-Based Distribution Fees comply with the provisions of rules 6c–
1. Section 17(d) of the Act and rule 10, 12b–1, 17d–3, 18f–3, 22d–1, and, II. Self-Regulatory Organization’s
17d–1 under the Act prohibit an where applicable, 11a–3 under the Act, Statement of the Purpose of, and
affiliated person of a registered as amended from time to time, as if Statutory Basis for, the Proposed Rule
investment company, or an affiliated those rules applied to closed-end Change
person of such person, acting as management investment companies, In its filing with the Commission, the
principal, from participating in or and will comply with the NASD Sales self-regulatory organization included
effecting any transaction in connection Charge Rule, as amended from time to statements concerning the purpose of,
with any joint enterprise or joint time, as if that rule applied to all closed- and basis for, the proposed rule change
arrangement in which the investment end management investment and discussed any comments it received
company participates unless the companies. on the proposed rule change. The text
Commission issues an order permitting For the Commission, by the Division of of those statements may be examined at
the transaction. In reviewing Investment Management, under delegated the places specified in Item IV below.
applications submitted under section authority. The Exchange has prepared summaries,
17(d) and rule 17d–1, the Commission Brent J. Fields, set forth in sections A, B, and C below,
considers whether the participation of Secretary. of the most significant parts of such
the investment company in a joint [FR Doc. 2016–09715 Filed 4–26–16; 8:45 am] statements.
enterprise or joint arrangement is
BILLING CODE 8011–01–P
consistent with the provisions, policies A. Self-Regulatory Organization’s
and purposes of the Act, and the extent Statement of the Purpose of, and the
to which the participation is on a basis Statutory Basis for, the Proposed Rule
SECURITIES AND EXCHANGE
different from or less advantageous than Change
COMMISSION
that of other participants. 1. Purpose
2. Rule 17d–3 under the Act provides [Release No. 34–77674; File No. SR–NYSE–
an exemption from section 17(d) and 2016–22) The Exchange proposes to adopt
rule 17d–1 to permit open-end initial and continued listing standards
investment companies to enter into Self-Regulatory Organizations; New for the listing of Equity Investment
distribution arrangements pursuant to York Stock Exchange LLC; Notice of Tracking Stocks. The Exchange also
rule 12b–1 under the Act. Applicants Filing of Proposed Rule Change proposes to adopt listing fees specific to
request an order under section 17(d) and Adopting Initial and Continued Listing Equity Investment Tracking Stocks.
rule 17d–1 under the Act to the extent Standards for the Listing of Equity For purposes of proposed new Section
necessary to permit the Funds to impose Investment Tracking Stocks and 102.07 of the Manual, an Equity
asset-based distribution fees. Applicants Adopting Listing Fees Specific to Investment Tracking Stock refers to a
have agreed to comply with rules 12b– Equity Investment Tracking Stocks class of common stock that is the listed
1 and 17d–3 as if those rules applied to April 21, 2016. company’s sole class of common equity
closed-end investment companies, Pursuant to Section 19(b)(1) 1 of the securities listed on the Exchange and
which they believe will resolve any Securities Exchange Act of 1934 that is designed solely to track the
concerns that might arise in connection (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 performance of an investment by the
with a Fund financing the distribution issuer in the common stock of another
asabaliauskas on DSK3SPTVN1PROD with NOTICES

notice is hereby given that, on April 7,
of its shares through asset-based 2016, New York Stock Exchange LLC company listed on the Exchange.
distribution fees. (‘‘NYSE’’ or ‘‘Exchange’’) filed with the In order to qualify for initial listing
3. For the reasons stated above, Securities and Exchange Commission under proposed Section 102.07, an
applicants submit that the exemptions (‘‘Commission’’) the proposed rule Equity Investment Tracking Stock will
requested under section 6(c) are be required to meet the distribution and
necessary and appropriate in the public 1 15 U.S.C.78s(b)(1). public float requirements currently
interest and are consistent with the 2 15 U.S.C. 78a. applicable for initial public offerings set
protection of investors and the purposes 3 17 CFR 240.19b–4. forth in Sections 102.01A and 102.01B

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Document Created: 2018-02-07 13:55:51
Document Modified: 2018-02-07 13:55:51
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 (the ``Act'') for an exemption from sections 18(c) and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for an exemption from rule 23c-3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d-1 under the Act.
Dates		The application was filed on December 10, 2015 and amended April 1, 2016.
Contact		Jean E. Minarick, Senior Counsel, at (202) 551-8811, or Daniele Marchesani, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		81 FR 24916