81 FR 30585 - TCW Alternative Funds, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 95 (May 17, 2016)

Page Range		30585-30589
FR Document		2016-11534
Federal Register, Volume 81 Issue 95 (Tuesday, May 17, 2016)
[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30585-30589]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11534]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32113; File No. 812-14561]


TCW Alternative Funds, et al.; Notice of Application

May 11, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order pursuant to: (a) Section 
6(c) of the Investment Company Act of 1940 (``Act'') granting an 
exemption from sections 18(f) and 21(b) of the Act; (b) section 
12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of 
the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption 
from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) 
section 17(d) of the Act and rule 17d-1 under the Act to permit certain 
joint arrangements and transactions.

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    Summary of the Application: Applicants request an order that would 
permit certain registered open-end management investment companies to 
participate in a joint lending and borrowing facility.
    Applicants: TCW Alternative Funds and Metropolitan West Funds (each 
a ``Trust'' and collectively the ``Trusts''), TCW Funds, Inc. (the 
``Corporation''); TCW Investment Management Company (``TCWIMC'') and 
Metropolitan West Asset Management, LLC (``MWAM'') (each, an 
``Adviser,'' and such entities together, the ``Advisers'').
    Filing Dates: The application was filed on October 5, 2015, and 
amended on January 28, 2016 and May 10, 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 June 6, 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: 865 S. Figueroa 
Street, Suite 1800, Los Angeles, CA 90017.

FOR FURTHER INFORMATION CONTACT: Mark N. Zaruba, Senior Counsel, at 
(202) 551-6878 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.

Applicants' Representations

    1. Each Trust is organized as a Delaware statutory trust and is 
registered under the Act as an open-end management investment company. 
The Corporation is a Maryland corporation and is registered as an open-
end management investment company. Each Trust and the Corporation has 
issued one or more series, each of which has its own investment 
objective and its own investment policies.\1\ TCWIMC is a California 
corporation and MWAM is a California limited liability company, and 
each of TCWIMC and MWAM is registered as an investment adviser under 
the Investment Advisers Act of 1940 (``Advisers Act''). Both are 
wholly-owned subsidiaries (direct or indirect) of the TCW Group, Inc., 
which, in turn, is owned indirectly by two investment funds that are 
controlled by The Carlyle Group, L.P. In the future, the Advisers may 
advise Funds that are money market funds that comply with rule 2a-7 
under the Act (collectively, the ``Money Market Funds'').\2\
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    \1\ Applicants request that the order apply to any registered 
open-end management investment company or series thereof for which 
TCWIMC, MWAM or any successor thereto or an investment adviser 
controlling, controlled by, or under common control (within the 
meaning of section 2(a)(9) of the Act) with TCWIMC or MWAM or any 
successor thereto serves as investment adviser (each a ``Fund'' and 
collectively the ``Funds'' or each such investment adviser an 
``Adviser''). For purposes of the requested order, ``successor'' is 
limited to any entity that results from a reorganization into 
another jurisdiction or a change in the type of a business 
organization.
    \2\ All Funds that currently intend to rely on the requested 
order have been named as applicants. Any other Fund that relies on 
the requested order in the future will comply with the terms and 
conditions of the application.
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    2. The Funds may lend cash to banks or other entities by entering 
into repurchase agreements or purchasing short-term instruments. The 
Funds may also need to borrow money for temporary purposes. In order to 
meet an unexpected volume of redemptions or to cover unanticipated cash 
shortfalls, the Metropolitan West Funds have contracted for a revolving 
credit facility with the Bank of New York Mellon Corporation, and other 
lenders that may be added in the future to the lending syndicate 
(``Bank Borrowing''). The TCW Alternative Funds and TCW Funds, Inc. may 
in the future join this credit facility or enter into other 
arrangements with other bank lenders (each also a ``Bank Borrowing''). 
The amount of borrowing under each of these lines of credit is limited 
to the amount specified by fundamental investment restrictions, the 
terms specified in the agreements, and/or other policies of the 
applicable Fund and section 18 of the Act.
    3. If Funds that experience a cash shortfall were to draw down on 
their Bank Borrowing, they would pay interest at a rate that is likely 
to be higher than the rate that could be earned by non-borrowing Funds 
on investments in repurchase agreements and other short-term money 
market instruments of the same maturity as the Bank Borrowing (``Short-
Term Instruments''). Applicants assert the difference between the 
higher rate paid on Bank Borrowing and what the bank pays to borrow 
under repurchase agreements or other arrangements represents the bank's 
profit for serving as the middleperson between a borrower and lender 
and is not attributable to any material difference in the credit 
quality or risk of such transactions.
    4. The Funds seek to enter into master interfund lending agreements 
with each other (the ``InterFund Program'') that would permit each Fund 
whose policies permit it to do so to lend money directly to and borrow 
money directly from other Funds for temporary purposes through the 
InterFund Program (an ``Interfund Loan''). The Money Market Funds will 
not participate as borrowers. Applicants state that the requested will 
relief enable the Funds to access an available source of money and 
reduce costs incurred by the Funds that need to obtain loans for 
temporary purposes and permit those Funds that have cash

[[Page 30586]]

available: (i) To earn a return on the money that they might not 
otherwise be able to invest; or (ii) to earn a higher rate of interest 
on investment of their short-term balances. Although the proposed 
InterFund Program would reduce the Funds' need to borrow from banks or 
through custodian drafts, the Funds would be free to establish and/or 
continue committed lines of credit or other borrowing arrangements with 
banks.
    5. Applicants anticipate that the proposed InterFund Program would 
provide a borrowing Fund with significant savings at times when the 
cash position of the Fund is insufficient to meet temporary cash 
requirements. This situation could arise when shareholder redemptions 
exceed anticipated cash volumes and certain Funds have insufficient 
cash on hand to satisfy such redemptions. When the Funds liquidate 
portfolio securities to meet redemption requests, they often do not 
receive payment in settlement for up to three days (or longer for 
certain foreign transactions). However, redemption requests normally 
are effected on the day following the trade date. The proposed 
InterFund Program would provide a source of immediate, short-term 
liquidity pending settlement of the sale of portfolio securities.
    6. Applicants also anticipate that a Fund could use the InterFund 
Program when a sale of securities ``fails'' due to circumstances beyond 
the Fund's control, such as a delay in the delivery of cash to the 
Fund's custodian or improper delivery instructions by the broker 
effecting the transaction. ``Sales fails'' may present a cash shortfall 
if the Fund has undertaken to purchase a security using the proceeds 
from securities sold. Alternatively, the Fund could: (i) ``Fail'' on 
its intended purchase due to lack of funds from the previous sale, 
resulting in additional cost to the Fund; or (ii) sell a security on a 
same-day settlement basis, earning a lower return on the investment. 
Use of the InterFund Program under these circumstances would enable the 
Fund to have access to immediate short-term liquidity.
    7. While Bank Borrowing and/or custodian overdrafts generally could 
supply Funds with needed cash to cover unanticipated redemptions and 
sales fails, under the proposed InterFund Program, a borrowing Fund 
would pay lower interest rates than those that would be payable under 
short-term loans offered by banks or custodian overdrafts. In addition, 
Funds making short-term cash loans directly to other Funds would earn 
interest at a rate higher than they otherwise could obtain from 
investing their cash in Short-Term Instruments. Thus, applicants assert 
that the proposed InterFund Program would benefit both borrowing and 
lending Funds.
    8. The interest rate to be charged to the Funds on any Interfund 
Loan (the ``Interfund Loan Rate'') would be the average of the ``Repo 
Rate'' and the ``Bank Loan Rate,'' both as defined below. The Repo Rate 
would be the highest current overnight repurchase agreement rate 
available to a lending Fund. The Bank Loan Rate for any day would be 
calculated by the InterFund Program Team, as defined below, on each day 
an Interfund Loan is made according to a formula established by each 
Fund's board of trustees (the ``Board'') intended to approximate the 
lowest interest rate at which a bank short-term loan would be available 
to the Fund. The formula would be based upon a publicly available rate 
(e.g., Federal funds rate and/or LIBOR) plus an additional spread of 
basis points and would vary with this rate so as to reflect changing 
bank loan rates. The initial formula and any subsequent modifications 
to the formula would be subject to the approval of each Fund's Board. 
In addition, the Board of each Fund would periodically review the 
continuing appropriateness of reliance on the formula used to determine 
the Bank Loan Rate, as well as the relationship between the Bank Loan 
Rate and current bank loan rates that would be available to the Fund.
    9. Certain members of the Advisers' administration personnel (other 
than investment advisory personnel) (the ``InterFund Program Team'') 
would administer the InterFund Program. No portfolio manager of any 
Fund will serve as a member of the InterFund Program Team. Under the 
proposed InterFund Program, the portfolio managers for each 
participating Fund could provide standing instructions to participate 
daily as a borrower or lender. The InterFund Program Team on each 
business day would collect data on the uninvested cash and borrowing 
requirements of all participating Funds. Once the InterFund Program 
Team has determined the aggregate amount of cash available for loans 
and borrowing demand, the InterFund Program Team will allocate loans 
among borrowing Funds without any further communication from the 
portfolio managers of the Funds. Applicants anticipate that there 
typically will be far more available uninvested cash each day than 
borrowing demand. Therefore, after the InterFund Program Team has 
allocated cash for Interfund Loans, the InterFund Program Team will 
invest any remaining cash in accordance with the standing instructions 
of the relevant portfolio manager or such remaining amounts will be 
invested directly by the portfolio managers of the Funds.
    10. The InterFund Program Team would allocate borrowing demand and 
cash available for lending among the Funds on what the InterFund 
Program Team believes to be an equitable basis, subject to certain 
administrative procedures applicable to all Funds, such as the time of 
filing requests to participate, minimum loan lot sizes, and the need to 
minimize the number of transactions and associated administrative 
costs. To reduce transaction costs, each Interfund Loan normally would 
be allocated in a manner intended to minimize the number of 
participants necessary to complete the loan transaction. The method of 
allocation and related administrative procedures would be approved by 
the Board of each of the Funds, including a majority of the Board 
members who are not ``interested persons,'' as defined in section 
2(a)(19) of the Act (``Independent Board Members''), to ensure that 
both borrowing and lending Funds participate on an equitable basis.
    11. The InterFund Program Team, on behalf of the Advisers. would: 
(a) Monitor the Interfund Loan Rate and the other terms and conditions 
of the Interfund Loans; (b) limit the borrowings and loans entered into 
by each Fund to ensure that they comply with the Fund's investment 
policies and limitations; (c) implement and follow procedures designed 
to ensure equitable treatment of each Fund; and (d) make quarterly 
reports to the Board of each Fund concerning any transactions by the 
applicable Fund under the InterFund Program and the Interfund Loan 
Rate.
    12. The Advisers, through the InterFund Program Team, would 
administer the InterFund Program as disinterested fiduciaries as part 
of their duties under the investment management and administrative 
agreements with each Fund and would receive no additional fee as 
compensation for its services in connection with the administration of 
the InterFund Program.
    13. No Fund may participate in the InterFund Program unless: (a) 
The Fund has obtained shareholder approval for its participation, if 
such approval is required by law; (b) the Fund has fully disclosed all 
material information concerning the InterFund Program in its 
registration statement on Form N-1A; and (c) the Fund's participation 
in the InterFund Program is consistent with its

[[Page 30587]]

investment objectives, limitations and organizational documents.
    14. As part of the Board's review of the continuing appropriateness 
of a Fund's participation in the proposed credit facility as required 
by condition 14, the Board of the Fund, including a majority of the 
Independent Board Members, also will review the process in place to 
appropriately assess: (i) If the Fund participates as a lender, any 
effect its participation may have on the Fund's liquidity risk; and 
(ii) if the Fund participates as a borrower, whether the Fund's 
portfolio liquidity is sufficient to satisfy its obligations under the 
facility along with its other liquidity needs.
    15. In connection with the InterFund Program, applicants request an 
order under section 6(c) of the Act exempting them from the provisions 
of sections 18(f) and 21(b) of the Act; under section 12(d)(1)(J) of 
the Act exempting them from section 12(d)(1) of the Act; under sections 
6(c) and 17(b) of the Act exempting them from sections 17(a)(1), 
17(a)(2), and 17(a)(3) of the Act; and under section 17(d) of the Act 
and rule 17d-1 under the Act to permit certain joint arrangements and 
transactions.

Applicants' Legal Analysis

    1. Section 17(a)(3) of the Act generally prohibits any affiliated 
person of a registered investment company, or affiliated person of an 
affiliated person, from borrowing money or other property from the 
registered investment company. Section 21(b) of the Act generally 
prohibits any registered management company from lending money or other 
property to any person, directly or indirectly, if that person controls 
or is under common control with that company. Section 2(a)(3)(C) of the 
Act defines an ``affiliated person'' of another person, in part, to be 
any person directly or indirectly controlling, controlled by, or under 
common control with, such other person. Section 2(a)(9) of the Act 
defines ``control'' as the ``power to exercise a controlling influence 
over the management or policies of a company,'' but excludes 
circumstances in which ``such power is solely the result of an official 
position with such company.'' Applicants state that the Funds may be 
under common control by virtue of having common investment advisers 
and/or by having common trustees, directors, managers and/or officers.
    2. Section 6(c) of the Act provides that an exemptive order may be 
granted where an 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. 
Section 17(b) of the Act authorizes the Commission to exempt a proposed 
transaction from section 17(a) provided that the terms of the 
transaction, including the consideration to be paid or received, are 
fair and reasonable and do not involve overreaching on the part of any 
person concerned, and the transaction is consistent with the policy of 
the investment company as recited in its registration statement and 
with the general purposes of the Act. Applicants believe that the 
proposed arrangements satisfy these standards for the reasons discussed 
below.
    3. Applicants assert that sections 17(a)(3) and 21(b) of the Act 
were intended to prevent a party with strong potential adverse 
interests to, and some influence over the investment decisions of, a 
registered investment company from causing or inducing the investment 
company to engage in lending transactions that unfairly inure to the 
benefit of such party and that are detrimental to the best interests of 
the investment company and its shareholders. Applicants assert that the 
proposed transactions do not raise these concerns because: (a) The 
Advisers, through the InterFund Program Team members, would administer 
the InterFund Program as disinterested fiduciaries as part of their 
duties under the investment management and administrative agreements 
with each Fund; (b) all Interfund Loans would consist only of 
uninvested cash reserves that the Fund otherwise would invest in short-
term repurchase agreements or other short-term investments; (c) the 
Interfund Loans would not involve a greater risk than such other 
investments; (d) the lending Fund would receive interest at a rate 
higher than it could otherwise obtain through such other investments; 
and (e) the borrowing Fund would pay interest at a rate lower than 
otherwise available to it under its bank loan agreements or through 
custodian overdrafts and avoid the commitment fees associated with 
lines of credit. Moreover, applicants assert that the other terms and 
conditions that applicants propose also would effectively preclude the 
possibility of any Fund obtaining an undue advantage over any other 
Fund.
    4. Section 17(a)(1) of the Act generally prohibits an affiliated 
person of a registered investment company, or any affiliated person of 
such a person, from selling securities or other property to the 
investment company. Section 17(a)(2) of the Act generally prohibits an 
affiliated person of a registered investment company, or any affiliated 
person of such a person, from purchasing securities or other property 
from the investment company. Section 12(d)(1) of the Act generally 
prohibits a registered investment company from purchasing or otherwise 
acquiring any security issued by any other investment company except in 
accordance with the limitations set forth in that section.
    5. Applicants state that the obligation of a borrowing Fund to 
repay an Interfund Loan could be deemed to constitute a security for 
the purposes of sections 17(a)(1) and 12(d)(1). Applicants also state 
that any pledge of securities to secure an Interfund Loan by the 
borrowing Fund to the lending Fund could constitute a purchase of 
securities for purposes of section 17(a)(2) of the Act. Section 
12(d)(1)(J) of the Act provides that the Commission may exempt persons 
or transactions from any provision of section 12(d)(1) if and to the 
extent that such exemption is consistent with the public interest and 
the protection of investors. Applicants contend that the standards 
under sections 6(c), 17(b), and 12(d)(1)(J) are satisfied for all the 
reasons set forth above in support of their request for relief from 
sections 17(a)(3) and 21(b) and for the reasons discussed below. 
Applicants state that the requested relief from section 17(a)(2) of the 
Act meets the standards of section 6(c) and 17(b) because any 
collateral pledged to secure an Interfund Loan would be subject to the 
same conditions imposed by any other lender to a Fund that imposes 
conditions on the quality of or access to collateral for a borrowing 
(if the lender is another Fund) or the same or better conditions (in 
any other circumstance).
    6. Applicants state that section 12(d)(1) was intended to prevent 
the pyramiding of investment companies in order to avoid imposing on 
investors additional and duplicative costs and fees attendant upon 
multiple layers of investment companies. Applicants submit that the 
proposed InterFund Program does not involve these abuses. Applicants 
note that there will be no duplicative costs or fees to the Funds or 
their shareholders, and that each Adviser will receive no additional 
compensation for its services in administering the InterFund Program. 
Applicants also note that the purpose of the proposed InterFund Program 
is to provide economic benefits for all the participating Funds and 
their shareholders. Section 18(f)(1) of the Act prohibits open-end 
investment companies from issuing any senior security except that a 
company is permitted to borrow from any bank, provided, that 
immediately after the borrowing, there is asset coverage of at

[[Page 30588]]

least 300 per centum for all borrowings of the company. Under section 
18(g) of the Act, the term ``senior security'' generally includes any 
bond, debenture, note or similar obligation or instrument constituting 
a security and evidencing indebtedness. Applicants request exemptive 
relief under section 6(c) from section 18(f)(1) to the limited extent 
necessary to implement the InterFund Program (because the lending Funds 
are not banks).
    7. Applicants believe that granting relief under section 6(c) is 
appropriate because the Funds would remain subject to the requirement 
of section 18(f)(1) that all borrowings of a Fund, including combined 
Interfund Loans and bank borrowings, have at least 300% asset coverage. 
Based on the conditions and safeguards described in the application, 
applicants also submit that to allow the Funds to borrow from other 
Funds pursuant to the proposed InterFund Program is consistent with the 
purposes and policies of section 18(f)(1).
    8. Section 17(d) of the Act and rule 17d-1 under the Act generally 
prohibit an affiliated person of a registered investment company, or 
any affiliated person of such a person, when acting as principal, from 
effecting any joint transaction in which the investment company 
participates, unless, upon application, the transaction has been 
approved by the Commission. Rule 17d-1(b) under the Act provides that 
in passing upon an application filed under the rule, the Commission 
will consider whether the participation of the registered investment 
company in a joint enterprise, joint arrangement or profit sharing plan 
on the basis proposed is consistent with the provisions, policies and 
purposes of the Act and the extent to which such participation is on a 
basis different from or less advantageous than that of the other 
participants.
    9. Applicants assert that the purpose of section 17(d) is to avoid 
overreaching by and an unfair advantage to insiders. Applicants assert 
that the InterFund Program is consistent with the provisions, policies 
and purposes of the Act in that it offers both reduced borrowing costs 
and enhanced returns on loaned funds to all participating Funds and 
their shareholders. Applicants note that each Fund would have an equal 
opportunity to borrow and lend on equal terms consistent with its 
investment policies and fundamental investment limitations. Applicants 
assert that each Fund's participation in the proposed InterFund Program 
would be on terms that are no different from or less advantageous than 
that of other participating Funds.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. The Interfund Loan Rate will be the average of the Repo Rate and 
the Bank Loan Rate.
    2. On each business day, when an interfund loan is to be made, the 
InterFund Program Team will compare the Bank Loan Rate with the Repo 
Rate and will make cash available for Interfund Loans only if the 
Interfund Loan Rate is: (a) More favorable to the lending Fund than the 
Repo Rate; and (b) more favorable to the borrowing Fund than the Bank 
Loan Rate.
    3. If a Fund has outstanding Bank Borrowings, any Interfund Loan to 
the Fund will: (a) Be at an interest rate equal to or lower than the 
interest rate of any outstanding bank loan; (b) be secured at least on 
an equal priority basis with at least an equivalent percentage of 
collateral to loan value as any outstanding bank loan that requires 
collateral; (c) have a maturity no longer than any outstanding bank 
loan (and in any event not over seven days); and (d) provide that, if 
an event of default occurs under any agreement evidencing an 
outstanding bank loan to the Fund, that event of default by the Fund, 
will automatically (without need for action or notice by the lending 
Fund) constitute an immediate event of default under the interfund 
lending agreement which both (i) entitles the lending Fund to call the 
Interfund Loan immediately and exercise all rights with respect to any 
collateral and (ii) causes the call to be made if the lending bank 
exercises its right to call its loan under its agreement with the 
borrowing Fund.
    4. A Fund may borrow on an unsecured basis through the InterFund 
Program only if the relevant borrowing Fund's outstanding borrowings 
from all sources immediately after the interfund borrowing total 10% or 
less of its total assets, provided that if the borrowing Fund has a 
secured loan outstanding from any other lender, including but not 
limited to another Fund, the lending Fund's Interfund Loan will be 
secured on at least an equal priority basis with at least an equivalent 
percentage of collateral to loan value as any outstanding loan that 
requires collateral. If a borrowing Fund's total outstanding borrowings 
immediately after an Interfund Loan would be greater than 10% of its 
total assets, the Fund may borrow through the InterFund Program only on 
a secured basis. A Fund may not borrow through the InterFund Program or 
from any other source if its total outstanding borrowings immediately 
after the borrowing would be more than 33\1/3\% of its total assets or 
any lower threshold provided for by a Fund's fundamental restriction or 
non-fundamental policy.
    5. Before any Fund that has outstanding interfund borrowings may, 
through additional borrowings, cause its outstanding borrowings from 
all sources to exceed 10% of its total assets, it must first secure 
each outstanding Interfund Loan to a Fund by the pledge of segregated 
collateral with a market value at least equal to 102% of the 
outstanding principal value of the loan. If the total outstanding 
borrowings of a Fund with outstanding Interfund Loans exceed 10% of its 
total assets for any other reason (such as a decline in net asset value 
or because of shareholder redemptions), the Fund will within one 
business day thereafter either: (a) Repay all its outstanding Interfund 
Loans to other Funds; (b) reduce its outstanding indebtedness to other 
Funds to 10% or less of its total assets; or (c) secure each 
outstanding Interfund Loan to other Funds by the pledge of segregated 
collateral with a market value at least equal to 102% of the 
outstanding principal value of the loan until the Fund's total 
outstanding borrowings cease to exceed 10% of its total assets, at 
which time the collateral called for by this condition 5 shall no 
longer be required. Until each Interfund Loan that is outstanding at 
any time that a Fund's total outstanding borrowings exceed 10% of its 
total assets is repaid or the Fund's total outstanding borrowings cease 
to exceed 10% of its total assets, the Fund will mark the value of the 
collateral to market each day and will pledge such additional 
collateral as is necessary to maintain the market value of the 
collateral that secures each outstanding Interfund Loan to Funds at 
least equal to 102% of the outstanding principal value of the Interfund 
Loans.
    6. No Fund may lend to another Fund through the InterFund Program 
if the loan would cause the lending Fund's aggregate outstanding loans 
through the InterFund Program to exceed 15% of its current net assets 
at the time of the loan.
    7. A Fund's Interfund Loans to any one Fund shall not exceed 5% of 
the lending Fund's net assets.
    8. The duration of Interfund Loans will be limited to the time 
required to receive payment for securities sold, but in no event more 
than seven days. Loans effected within seven days of each other will be 
treated as separate loan transactions for purposes of this condition.

[[Page 30589]]

    9. A Fund's borrowings through the InterFund Program, as measured 
on the day when the most recent loan was made, will not exceed the 
greater of 125% of the Fund's total net cash redemptions for the 
preceding seven calendar days or 102% of a Fund's sales fails for the 
preceding seven calendar days.
    10. Each Interfund Loan may be called on one business day's notice 
by a lending Fund and may be repaid on any day by a borrowing Fund.
    11. A Fund's participation in the InterFund Program must be 
consistent with its investment restrictions, policies, limitations and 
organizational documents.
    12. The InterFund Program Team will calculate total Fund borrowing 
and lending demand through the InterFund Program, and allocate 
Interfund Loans on an equitable basis among the Funds, without the 
intervention of any portfolio manager. The InterFund Program Team will 
not solicit cash for the InterFund Program from any Fund or 
prospectively publish or disseminate loan demand data to portfolio 
managers. The InterFund Program Team will invest all amounts remaining 
after satisfaction of borrowing demand in accordance with the standing 
instructions of the relevant portfolio manager or such remaining 
amounts will be invested directly by the portfolio managers of the 
Funds.
    13. The InterFund Program Team will monitor the Interfund Loan Rate 
charged and the other terms and conditions of the Interfund Loans and 
will make a quarterly report to the Boards concerning the participation 
of the Funds in the InterFund Program and the terms and other 
conditions of any extensions of credit under the InterFund Program.
    14. Each Board, including a majority of its Independent Board 
Members, will:
    (a) Review, no less frequently than quarterly, the participation of 
each Fund it oversees in the InterFund Program during the preceding 
quarter for compliance with the conditions of any order permitting such 
participation;
    (b) establish the Bank Loan Rate formula used to determine the 
interest rate on Interfund Loans;
    (c) review, no less frequently than annually, the continuing 
appropriateness of the Bank Loan Rate formula; and
    (d) review, no less frequently than annually, the continuing 
appropriateness of the participation in the InterFund Program by each 
Fund it oversees.
    15. Each Fund will maintain and preserve for a period of not less 
than six years from the end of the fiscal year in which any transaction 
by it under the InterFund Program occurred, the first two years in an 
easily accessible place, written records of all such transactions 
setting forth a description of the terms of the transaction, including 
the amount, the maturity and the Interfund Loan Rate, the rate of 
interest available at the time each Interfund Loan is made on overnight 
repurchase agreements and Bank Borrowings, and such other information 
presented to the Boards of the Funds in connection with the review 
required by conditions 13 and 14.
    16. In the event an Interfund Loan is not paid according to its 
terms and the default is not cured within two business days from its 
maturity or from the time the lending Fund makes a demand for payment 
under the provisions of the interfund lending agreement, the Adviser to 
the lending Fund promptly will refer the loan for arbitration to an 
independent arbitrator selected by the Board of any Fund involved in 
the loan who will serve as arbitrator of disputes concerning Interfund 
Loans.\3\ The arbitrator will resolve any problem promptly, and the 
arbitrator's decision will be binding on both Funds. The arbitrator 
will submit, at least annually, a written report to the Board of each 
Fund setting forth a description of the nature of any dispute and the 
actions taken by the Funds to resolve the dispute.
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    \3\ If the dispute involves Funds that do not have a common 
Board, the Board of each affected Fund will select an independent 
arbitrator that is satisfactory to each Fund.
---------------------------------------------------------------------------

    17. The Advisers will prepare and submit to the Board for review an 
initial report describing the operations of the InterFund Program and 
the procedures to be implemented to ensure that all Funds are treated 
fairly. After the commencement of the InterFund Program, the Advisers 
will report on the operations of the InterFund Program at each Board's 
quarterly meetings. Each Fund's chief compliance officer, as defined in 
rule 38a-1(a)(4) under the Act, shall prepare an annual report for its 
Board each year that the Fund participates in the InterFund Program, 
that evaluates the Fund's compliance with the terms and conditions of 
the application and the procedures established to achieve such 
compliance. Each Fund's chief compliance officer will also annually 
file a certification pursuant to Item 77Q3 of Form N-SAR as such form 
may be revised, amended or superseded from time to time, for each year 
that the Fund participates in the InterFund Program, that certifies 
that the Fund and its Adviser have implemented procedures reasonably 
designed to achieve compliance with the terms and conditions of the 
order. In particular, such certification will address procedures 
designed to achieve the following objectives:
    (a) That the Interfund Loan Rate will be higher than the Repo Rate 
but lower than the Bank Loan Rate;
    (b) compliance with the collateral requirements as set forth in the 
application;
    (c) compliance with the percentage limitations on interfund 
borrowing and lending;
    (d) allocation of interfund borrowing and lending demand in an 
equitable manner and in accordance with procedures established by the 
Board; and
    (e) that the Interfund Loan Rate does not exceed the interest rate 
on any third party borrowings of a borrowing Fund at the time of the 
Interfund Loan.
    Additionally, each Fund's independent registered public 
accountants, in connection with their audit examination of the Fund, 
will review the operation of the InterFund Program for compliance with 
the conditions of the application and their review will form the basis, 
in part, of the auditor's report on internal accounting controls in 
Form N-SAR.
    18. No Fund will participate in the InterFund Program, upon receipt 
of requisite regulatory approval, unless it has fully disclosed in its 
registration statement on Form N-1A (or any successor form adopted by 
the Commission) all material facts about its intended participation.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11534 Filed 5-16-16; 8:45 am]
BILLING CODE 8011-01-P
30586 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Notices

available: (i) To earn a return on the from investing their cash in Short-Term remaining cash in accordance with the
money that they might not otherwise be Instruments. Thus, applicants assert that standing instructions of the relevant
able to invest; or (ii) to earn a higher rate the proposed InterFund Program would portfolio manager or such remaining
of interest on investment of their short- benefit both borrowing and lending amounts will be invested directly by the
term balances. Although the proposed Funds. portfolio managers of the Funds.
InterFund Program would reduce the 8. The interest rate to be charged to 10. The InterFund Program Team
Funds’ need to borrow from banks or the Funds on any Interfund Loan (the would allocate borrowing demand and
through custodian drafts, the Funds ‘‘Interfund Loan Rate’’) would be the cash available for lending among the
would be free to establish and/or average of the ‘‘Repo Rate’’ and the Funds on what the InterFund Program
continue committed lines of credit or ‘‘Bank Loan Rate,’’ both as defined Team believes to be an equitable basis,
other borrowing arrangements with below. The Repo Rate would be the subject to certain administrative
banks. highest current overnight repurchase procedures applicable to all Funds, such
5. Applicants anticipate that the agreement rate available to a lending as the time of filing requests to
proposed InterFund Program would Fund. The Bank Loan Rate for any day participate, minimum loan lot sizes, and
provide a borrowing Fund with would be calculated by the InterFund the need to minimize the number of
significant savings at times when the Program Team, as defined below, on transactions and associated
cash position of the Fund is insufficient each day an Interfund Loan is made administrative costs. To reduce
to meet temporary cash requirements. according to a formula established by transaction costs, each Interfund Loan
This situation could arise when each Fund’s board of trustees (the normally would be allocated in a
shareholder redemptions exceed ‘‘Board’’) intended to approximate the manner intended to minimize the
anticipated cash volumes and certain lowest interest rate at which a bank number of participants necessary to
Funds have insufficient cash on hand to short-term loan would be available to complete the loan transaction. The
satisfy such redemptions. When the the Fund. The formula would be based method of allocation and related
Funds liquidate portfolio securities to upon a publicly available rate (e.g., administrative procedures would be
meet redemption requests, they often do Federal funds rate and/or LIBOR) plus approved by the Board of each of the
not receive payment in settlement for up an additional spread of basis points and Funds, including a majority of the Board
to three days (or longer for certain would vary with this rate so as to reflect members who are not ‘‘interested
foreign transactions). However, changing bank loan rates. The initial persons,’’ as defined in section 2(a)(19)
redemption requests normally are formula and any subsequent of the Act (‘‘Independent Board
effected on the day following the trade modifications to the formula would be Members’’), to ensure that both
date. The proposed InterFund Program subject to the approval of each Fund’s borrowing and lending Funds
would provide a source of immediate, Board. In addition, the Board of each participate on an equitable basis.
short-term liquidity pending settlement Fund would periodically review the 11. The InterFund Program Team, on
of the sale of portfolio securities. continuing appropriateness of reliance behalf of the Advisers. would: (a)
6. Applicants also anticipate that a on the formula used to determine the Monitor the Interfund Loan Rate and the
Fund could use the InterFund Program Bank Loan Rate, as well as the other terms and conditions of the
when a sale of securities ‘‘fails’’ due to relationship between the Bank Loan Interfund Loans; (b) limit the
circumstances beyond the Fund’s Rate and current bank loan rates that borrowings and loans entered into by
control, such as a delay in the delivery would be available to the Fund. each Fund to ensure that they comply
of cash to the Fund’s custodian or 9. Certain members of the Advisers’ with the Fund’s investment policies and
improper delivery instructions by the administration personnel (other than limitations; (c) implement and follow
broker effecting the transaction. ‘‘Sales investment advisory personnel) (the procedures designed to ensure equitable
fails’’ may present a cash shortfall if the ‘‘InterFund Program Team’’) would treatment of each Fund; and (d) make
Fund has undertaken to purchase a administer the InterFund Program. No quarterly reports to the Board of each
security using the proceeds from portfolio manager of any Fund will Fund concerning any transactions by
securities sold. Alternatively, the Fund serve as a member of the InterFund the applicable Fund under the
could: (i) ‘‘Fail’’ on its intended Program Team. Under the proposed InterFund Program and the Interfund
purchase due to lack of funds from the InterFund Program, the portfolio Loan Rate.
previous sale, resulting in additional managers for each participating Fund 12. The Advisers, through the
cost to the Fund; or (ii) sell a security could provide standing instructions to InterFund Program Team, would
on a same-day settlement basis, earning participate daily as a borrower or administer the InterFund Program as
a lower return on the investment. Use of lender. The InterFund Program Team on disinterested fiduciaries as part of their
the InterFund Program under these each business day would collect data on duties under the investment
circumstances would enable the Fund to the uninvested cash and borrowing management and administrative
have access to immediate short-term requirements of all participating Funds. agreements with each Fund and would
liquidity. Once the InterFund Program Team has receive no additional fee as
7. While Bank Borrowing and/or determined the aggregate amount of compensation for its services in
custodian overdrafts generally could cash available for loans and borrowing connection with the administration of
supply Funds with needed cash to cover demand, the InterFund Program Team the InterFund Program.
unanticipated redemptions and sales will allocate loans among borrowing 13. No Fund may participate in the
fails, under the proposed InterFund Funds without any further InterFund Program unless: (a) The Fund
Program, a borrowing Fund would pay communication from the portfolio has obtained shareholder approval for
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lower interest rates than those that managers of the Funds. Applicants its participation, if such approval is
would be payable under short-term anticipate that there typically will be far required by law; (b) the Fund has fully
loans offered by banks or custodian more available uninvested cash each disclosed all material information
overdrafts. In addition, Funds making day than borrowing demand. Therefore, concerning the InterFund Program in its
short-term cash loans directly to other after the InterFund Program Team has registration statement on Form N–1A;
Funds would earn interest at a rate allocated cash for Interfund Loans, the and (c) the Fund’s participation in the
higher than they otherwise could obtain InterFund Program Team will invest any InterFund Program is consistent with its

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Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Notices 30587

investment objectives, limitations and the Act. Section 17(b) of the Act purchasing securities or other property
organizational documents. authorizes the Commission to exempt a from the investment company. Section
14. As part of the Board’s review of proposed transaction from section 17(a) 12(d)(1) of the Act generally prohibits a
the continuing appropriateness of a provided that the terms of the registered investment company from
Fund’s participation in the proposed transaction, including the consideration purchasing or otherwise acquiring any
credit facility as required by condition to be paid or received, are fair and security issued by any other investment
14, the Board of the Fund, including a reasonable and do not involve company except in accordance with the
majority of the Independent Board overreaching on the part of any person limitations set forth in that section.
Members, also will review the process concerned, and the transaction is 5. Applicants state that the obligation
in place to appropriately assess: (i) If the consistent with the policy of the of a borrowing Fund to repay an
Fund participates as a lender, any effect investment company as recited in its Interfund Loan could be deemed to
its participation may have on the Fund’s registration statement and with the constitute a security for the purposes of
liquidity risk; and (ii) if the Fund general purposes of the Act. Applicants sections 17(a)(1) and 12(d)(1).
participates as a borrower, whether the believe that the proposed arrangements Applicants also state that any pledge of
Fund’s portfolio liquidity is sufficient to satisfy these standards for the reasons securities to secure an Interfund Loan
satisfy its obligations under the facility discussed below. by the borrowing Fund to the lending
along with its other liquidity needs. 3. Applicants assert that sections Fund could constitute a purchase of
15. In connection with the InterFund 17(a)(3) and 21(b) of the Act were securities for purposes of section
Program, applicants request an order intended to prevent a party with strong 17(a)(2) of the Act. Section 12(d)(1)(J) of
under section 6(c) of the Act exempting potential adverse interests to, and some the Act provides that the Commission
them from the provisions of sections influence over the investment decisions may exempt persons or transactions
18(f) and 21(b) of the Act; under section of, a registered investment company from any provision of section 12(d)(1) if
12(d)(1)(J) of the Act exempting them from causing or inducing the investment and to the extent that such exemption
from section 12(d)(1) of the Act; under company to engage in lending is consistent with the public interest
sections 6(c) and 17(b) of the Act transactions that unfairly inure to the and the protection of investors.
exempting them from sections 17(a)(1), benefit of such party and that are Applicants contend that the standards
17(a)(2), and 17(a)(3) of the Act; and detrimental to the best interests of the under sections 6(c), 17(b), and
under section 17(d) of the Act and rule investment company and its 12(d)(1)(J) are satisfied for all the
17d–1 under the Act to permit certain shareholders. Applicants assert that the reasons set forth above in support of
joint arrangements and transactions. proposed transactions do not raise these their request for relief from sections
Applicants’ Legal Analysis concerns because: (a) The Advisers, 17(a)(3) and 21(b) and for the reasons
through the InterFund Program Team discussed below. Applicants state that
1. Section 17(a)(3) of the Act generally members, would administer the the requested relief from section 17(a)(2)
prohibits any affiliated person of a InterFund Program as disinterested of the Act meets the standards of section
registered investment company, or fiduciaries as part of their duties under 6(c) and 17(b) because any collateral
affiliated person of an affiliated person, the investment management and pledged to secure an Interfund Loan
from borrowing money or other property administrative agreements with each would be subject to the same conditions
from the registered investment Fund; (b) all Interfund Loans would imposed by any other lender to a Fund
company. Section 21(b) of the Act consist only of uninvested cash reserves that imposes conditions on the quality
generally prohibits any registered that the Fund otherwise would invest in of or access to collateral for a borrowing
management company from lending short-term repurchase agreements or (if the lender is another Fund) or the
money or other property to any person, other short-term investments; (c) the same or better conditions (in any other
directly or indirectly, if that person Interfund Loans would not involve a circumstance).
controls or is under common control greater risk than such other investments; 6. Applicants state that section
with that company. Section 2(a)(3)(C) of (d) the lending Fund would receive 12(d)(1) was intended to prevent the
the Act defines an ‘‘affiliated person’’ of interest at a rate higher than it could pyramiding of investment companies in
another person, in part, to be any person otherwise obtain through such other order to avoid imposing on investors
directly or indirectly controlling, investments; and (e) the borrowing additional and duplicative costs and
controlled by, or under common control Fund would pay interest at a rate lower fees attendant upon multiple layers of
with, such other person. Section 2(a)(9) than otherwise available to it under its investment companies. Applicants
of the Act defines ‘‘control’’ as the bank loan agreements or through submit that the proposed InterFund
‘‘power to exercise a controlling custodian overdrafts and avoid the Program does not involve these abuses.
influence over the management or commitment fees associated with lines Applicants note that there will be no
policies of a company,’’ but excludes of credit. Moreover, applicants assert duplicative costs or fees to the Funds or
circumstances in which ‘‘such power is that the other terms and conditions that their shareholders, and that each
solely the result of an official position applicants propose also would Adviser will receive no additional
with such company.’’ Applicants state effectively preclude the possibility of compensation for its services in
that the Funds may be under common any Fund obtaining an undue advantage administering the InterFund Program.
control by virtue of having common over any other Fund. Applicants also note that the purpose of
investment advisers and/or by having 4. Section 17(a)(1) of the Act generally the proposed InterFund Program is to
common trustees, directors, managers prohibits an affiliated person of a provide economic benefits for all the
registered investment company, or any participating Funds and their
jstallworth on DSK7TPTVN1PROD with NOTICES

and/or officers.
2. Section 6(c) of the Act provides that affiliated person of such a person, from shareholders. Section 18(f)(1) of the Act
an exemptive order may be granted selling securities or other property to prohibits open-end investment
where an exemption is necessary or the investment company. Section companies from issuing any senior
appropriate in the public interest and 17(a)(2) of the Act generally prohibits an security except that a company is
consistent with the protection of affiliated person of a registered permitted to borrow from any bank,
investors and the purposes fairly investment company, or any affiliated provided, that immediately after the
intended by the policy and provisions of person of such a person, from borrowing, there is asset coverage of at

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30588 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Notices

least 300 per centum for all borrowings or less advantageous than that of other Program or from any other source if its
of the company. Under section 18(g) of participating Funds. total outstanding borrowings
the Act, the term ‘‘senior security’’ immediately after the borrowing would
Applicants’ Conditions
generally includes any bond, debenture, be more than 331⁄3% of its total assets
note or similar obligation or instrument Applicants agree that any order or any lower threshold provided for by
constituting a security and evidencing granting the requested relief will be a Fund’s fundamental restriction or non-
indebtedness. Applicants request subject to the following conditions: fundamental policy.
exemptive relief under section 6(c) from 1. The Interfund Loan Rate will be the 5. Before any Fund that has
section 18(f)(1) to the limited extent average of the Repo Rate and the Bank outstanding interfund borrowings may,
necessary to implement the InterFund Loan Rate. through additional borrowings, cause its
Program (because the lending Funds are 2. On each business day, when an
outstanding borrowings from all sources
not banks). interfund loan is to be made, the
to exceed 10% of its total assets, it must
InterFund Program Team will compare
7. Applicants believe that granting first secure each outstanding Interfund
the Bank Loan Rate with the Repo Rate
relief under section 6(c) is appropriate Loan to a Fund by the pledge of
and will make cash available for
because the Funds would remain segregated collateral with a market
Interfund Loans only if the Interfund
subject to the requirement of section value at least equal to 102% of the
Loan Rate is: (a) More favorable to the
18(f)(1) that all borrowings of a Fund, outstanding principal value of the loan.
lending Fund than the Repo Rate; and
including combined Interfund Loans If the total outstanding borrowings of a
(b) more favorable to the borrowing
and bank borrowings, have at least Fund than the Bank Loan Rate. Fund with outstanding Interfund Loans
300% asset coverage. Based on the 3. If a Fund has outstanding Bank exceed 10% of its total assets for any
conditions and safeguards described in Borrowings, any Interfund Loan to the other reason (such as a decline in net
the application, applicants also submit Fund will: (a) Be at an interest rate asset value or because of shareholder
that to allow the Funds to borrow from equal to or lower than the interest rate redemptions), the Fund will within one
other Funds pursuant to the proposed of any outstanding bank loan; (b) be business day thereafter either: (a) Repay
InterFund Program is consistent with secured at least on an equal priority all its outstanding Interfund Loans to
the purposes and policies of section basis with at least an equivalent other Funds; (b) reduce its outstanding
18(f)(1). percentage of collateral to loan value as indebtedness to other Funds to 10% or
8. Section 17(d) of the Act and rule any outstanding bank loan that requires less of its total assets; or (c) secure each
17d–1 under the Act generally prohibit collateral; (c) have a maturity no longer outstanding Interfund Loan to other
an affiliated person of a registered than any outstanding bank loan (and in Funds by the pledge of segregated
investment company, or any affiliated any event not over seven days); and (d) collateral with a market value at least
person of such a person, when acting as provide that, if an event of default equal to 102% of the outstanding
principal, from effecting any joint occurs under any agreement evidencing principal value of the loan until the
transaction in which the investment an outstanding bank loan to the Fund, Fund’s total outstanding borrowings
company participates, unless, upon that event of default by the Fund, will cease to exceed 10% of its total assets,
application, the transaction has been automatically (without need for action at which time the collateral called for by
approved by the Commission. Rule 17d– or notice by the lending Fund) this condition 5 shall no longer be
1(b) under the Act provides that in constitute an immediate event of default required. Until each Interfund Loan that
passing upon an application filed under under the interfund lending agreement is outstanding at any time that a Fund’s
the rule, the Commission will consider which both (i) entitles the lending Fund total outstanding borrowings exceed
whether the participation of the to call the Interfund Loan immediately 10% of its total assets is repaid or the
registered investment company in a and exercise all rights with respect to Fund’s total outstanding borrowings
joint enterprise, joint arrangement or any collateral and (ii) causes the call to cease to exceed 10% of its total assets,
profit sharing plan on the basis be made if the lending bank exercises its the Fund will mark the value of the
proposed is consistent with the right to call its loan under its agreement collateral to market each day and will
provisions, policies and purposes of the with the borrowing Fund. pledge such additional collateral as is
Act and the extent to which such 4. A Fund may borrow on an necessary to maintain the market value
participation is on a basis different from unsecured basis through the InterFund of the collateral that secures each
or less advantageous than that of the Program only if the relevant borrowing outstanding Interfund Loan to Funds at
other participants. Fund’s outstanding borrowings from all least equal to 102% of the outstanding
9. Applicants assert that the purpose sources immediately after the interfund principal value of the Interfund Loans.
of section 17(d) is to avoid overreaching borrowing total 10% or less of its total 6. No Fund may lend to another Fund
by and an unfair advantage to insiders. assets, provided that if the borrowing through the InterFund Program if the
Applicants assert that the InterFund Fund has a secured loan outstanding loan would cause the lending Fund’s
Program is consistent with the from any other lender, including but not aggregate outstanding loans through the
provisions, policies and purposes of the limited to another Fund, the lending InterFund Program to exceed 15% of its
Act in that it offers both reduced Fund’s Interfund Loan will be secured current net assets at the time of the loan.
borrowing costs and enhanced returns on at least an equal priority basis with 7. A Fund’s Interfund Loans to any
on loaned funds to all participating at least an equivalent percentage of one Fund shall not exceed 5% of the
Funds and their shareholders. collateral to loan value as any lending Fund’s net assets.
Applicants note that each Fund would outstanding loan that requires collateral. 8. The duration of Interfund Loans
jstallworth on DSK7TPTVN1PROD with NOTICES

have an equal opportunity to borrow If a borrowing Fund’s total outstanding will be limited to the time required to
and lend on equal terms consistent with borrowings immediately after an receive payment for securities sold, but
its investment policies and fundamental Interfund Loan would be greater than in no event more than seven days. Loans
investment limitations. Applicants 10% of its total assets, the Fund may effected within seven days of each other
assert that each Fund’s participation in borrow through the InterFund Program will be treated as separate loan
the proposed InterFund Program would only on a secured basis. A Fund may transactions for purposes of this
be on terms that are no different from not borrow through the InterFund condition.

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Document Created: 2018-02-07 15:06:03
Document Modified: 2018-02-07 15:06:03
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 for an order pursuant to: (a) Section 6(c) of the Investment Company Act of 1940 (``Act'') granting an exemption from sections 18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) section 17(d) of the Act and rule 17d-1 under the Act to permit certain joint arrangements and transactions.
Dates		The application was filed on October 5, 2015, and amended on January 28, 2016 and May 10, 2016.
Contact		Mark N. Zaruba, Senior Counsel, at (202) 551-6878 or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		81 FR 30585