81 FR 79548 - The Boston Trust & Walden Funds, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 219 (November 14, 2016)

Page Range		79548-79549
FR Document		2016-27249

Federal Register, Volume 81 Issue 219 (Monday, November 14, 2016)

[Federal Register Volume 81, Number 219 (Monday, November 14, 2016)]
[Notices]
[Pages 79548-79549]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-27249]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32353; File No. 812-14654]


The Boston Trust & Walden Funds, et al.; Notice of Application

November 7, 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. Applicants request an order that 
would permit certain registered open-end management investment 
companies to participate in a joint lending and borrowing facility.

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Applicants: The Boston Trust & Walden Funds, registered under the Act 
as an open-end management investment company with one or more series, 
and Boston Trust Investment Management, Inc. (the ``Adviser''), 
registered as an investment adviser under the Investment Advisers Act 
of 1940.

Filing Dates: The application was filed on June 3, 2016, and amended on 
August 18, 2016 and October 18, 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 December 1, 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, c/o Michael V. 
Wible, Esq., Thompson Hine LLP, 41 South High Street, Suite 1700, 
Columbus, OH 43215.

FOR FURTHER INFORMATION CONTACT: Jennifer Palmer, Senior Counsel, at 
(202) 551-5786 or Nadya Roytblat, Assistant Chief Counsel, at (202) 
551-6823 (Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Summary of the Application

    1. Applicants request an order that would permit the applicants to 
participate in an interfund lending facility where each Fund could lend 
money directly to and borrow money directly from other Funds to cover 
unanticipated cash shortfalls, such as unanticipated redemptions or 
trade fails.\1\ The Funds will borrow under the facility only to 
satisfy their short-term cash needs, and the loans' duration will be no 
more than 7 days.\2\
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    \1\ Applicants request that the order apply to the applicants 
and to any existing or future registered open-end management 
investment company or series thereof for which the Adviser or any 
successor thereto or an investment adviser controlling, controlled 
by, or under common control with the Adviser or any successor 
thereto serves as investment adviser (each a ``Fund'' and 
collectively the ``Funds'' and 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\ Any Fund, however, will be able to call a loan on one 
business day's notice.
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    2. Applicants anticipate that the proposed facility would provide a 
borrowing Fund with a source of liquidity at a rate lower than the bank 
borrowing rate at times when the cash position of the Fund is 
insufficient to meet temporary cash requirements. 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 repurchase agreements or certain other short-
term money market instruments. Thus, applicants assert that the 
facility would benefit both borrowing and lending Funds.
    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the application. 
Among others, the Adviser, through a designated committee, would 
administer the facility as a disinterested fiduciary as part of its 
duties under the investment management agreements with the Funds and 
would receive no additional fee as compensation for its services in 
connection with the administration of the facility, except that the 
Adviser could collect standard fees for transaction-related services. 
The facility would be subject to oversight and certain approvals by the 
Funds' Board, including, among others, approval of the interest rate 
formula and of the method for allocating loans across Funds, as well as 
review of the process in place to evaluate the liquidity implications 
for the Funds. A Fund's aggregate outstanding interfund loans will not 
exceed 15% of its net assets, and the Fund's loans to any one Fund will 
not exceed 5% of the lending Fund's net assets.\3\
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    \3\ Under certain circumstances, a borrowing Fund will be 
required to pledge collateral to secure the loan.
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    4. Applicants assert that the facility does not raise the concerns 
underlying section 12(d)(1) of the Act given that the Funds are part of 
the same group of investment companies and there will be no duplicative 
costs or fees to the Funds.\4\ Applicants also assert that the proposed 
transactions do not raise the concerns underlying sections 17(a)(1), 
17(a)(3), 17(d) and 21(b) of the Act as the Funds would not engage in 
lending transactions that unfairly benefit insiders or are detrimental 
to the Funds. Applicants state that the facility will offer both 
reduced borrowing costs and enhanced returns on loaned funds to all 
participating Funds and each Fund would have an equal opportunity to 
borrow and lend on equal terms based on an interest rate formula that 
is objective and verifiable. With respect to the relief from section 
17(a)(2) of the Act, applicants note that 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

[[Page 79549]]

same or better conditions (in any other circumstance).\5\
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    \4\ Applicants state that the obligation to repay an interfund 
loan could be deemed to constitute a security for the purposes of 
sections 17(a)(1) and 12(d)(1) of the Act.
    \5\ Applicants state that any pledge of securities to secure an 
interfund loan could constitute a purchase of securities for 
purposes of section 17(a)(2) of the Act.
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    5. Applicants also believe that the limited relief from section 
18(f)(1) of the Act that is necessary to implement the facility 
(because the lending Funds are not banks) is appropriate in light of 
the conditions and safeguards described in the application and 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.
    6. Section 6(c) of the Act permits the Commission to exempt any 
persons or transactions from any provision of the Act if 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. Section 12(d)(1)(J) 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 section 12(d)(1) if the exemption 
is consistent with the public interest and the protection of investors. 
Section 17(b) of the Act authorizes the Commission to grant an order 
permitting a transaction otherwise prohibited by section 17(a) if it 
finds that (a) the terms of the proposed transaction are fair and 
reasonable and do not involve overreaching on the part of any person 
concerned; (b) the proposed transaction is consistent with the policies 
of each registered investment company involved; and (c) the proposed 
transaction is consistent with the general purposes of the Act. 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.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016-27249 Filed 11-10-16; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 219 / Monday, November 14, 2016 / Notices 79549

same or better conditions (in any other SECURITIES AND EXCHANGE an indication to a trading center of
circumstance).5 COMMISSION when it must execute or display a short
5. Applicants also believe that the sale order without regard to whether the
limited relief from section 18(f)(1) of the Proposed Collection; Comment short sale order is at a price that is less
Act that is necessary to implement the Request than or equal to the current national
facility (because the lending Funds are best bid.
Upon Written Request, Copies Available
not banks) is appropriate in light of the
From: Securities and Exchange It is estimated that SRO and non-SRO
conditions and safeguards described in
Commission, Office of FOIA Services, respondents registered with the
the application and because the Funds
100 F Street NE., Washington, DC Commission and subject to the
would remain subject to the
20549–2736. collection of information requirements
requirement of section 18(f)(1) that all
borrowings of a Fund, including Extension: Rule 201 and Rule 200(g) of of Rule 201 and Rule 200(g) incur an
combined interfund loans and bank Regulation SHO aggregate annual burden of 2,908,309
SEC File No. 270–606, OMB Control No. hours to comply with the rules and an
borrowings, have at least 300% asset
3235–0670
coverage. aggregate annual external cost of
6. Section 6(c) of the Act permits the Notice is hereby given that pursuant $120,000.
Commission to exempt any persons or to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the Written comments are invited on: (a)
transactions from any provision of the
Securities and Exchange Commission Whether the proposed collection of
Act if such exemption is necessary or
appropriate in the public interest and (‘‘Commission’’) is soliciting comments information is necessary for the proper
consistent with the protection of on the existing collection of information performance of the functions of the
investors and the purposes fairly provided for in Rule 201 (17 CFR Commission, including whether the
intended by the policy and provisions of 242.201) and Rule 200(g) (17 CFR information shall have practical utility;
the Act. Section 12(d)(1)(J) of the Act 242.200(g)) under the Securities (b) the accuracy of the Commission’s
provides that the Commission may Exchange Act of 1934 (15 U.S.C. 78a et estimates of the burden of the proposed
exempt any person, security, or seq.). The Commission plans to submit collection of information; (c) ways to
transaction, or any class or classes of this existing collection of information to enhance the quality, utility, and clarity
persons, securities, or transactions, from the Office of Management and Budget of the information collected; and (d)
any provision of section 12(d)(1) if the (‘‘OMB’’) for extension and approval. ways to minimize the burden of the
exemption is consistent with the public Rule 201 is a short sale-related circuit collection of information on
interest and the protection of investors. breaker rule that, if triggered, imposes a respondents, including through the use
Section 17(b) of the Act authorizes the restriction on the prices at which of automated collection techniques or
Commission to grant an order securities may be sold short. Rule 200(g) other forms of information technology.
permitting a transaction otherwise provides that a broker-dealer may mark
Consideration will be given to
prohibited by section 17(a) if it finds certain qualifying sell orders ‘‘short
comments and suggestions submitted in
that (a) the terms of the proposed exempt.’’ The information collected
under Rule 201’s written policies and writing within 60 days of this
transaction are fair and reasonable and publication.
do not involve overreaching on the part procedures requirement applicable to
of any person concerned; (b) the trading centers, the written policies and An agency may not conduct or
proposed transaction is consistent with procedures requirement of the broker- sponsor, and a person is not required to
the policies of each registered dealer provision of Rule 201(c), the respond to, a collection of information
investment company involved; and (c) written policies and procedures under the PRA unless it displays a
the proposed transaction is consistent requirement of the riskless principal currently valid OMB control number.
with the general purposes of the Act. provision of Rule 201(d)(6), and the Please direct your written comments
Rule 17d–1(b) under the Act provides ‘‘short exempt’’ marking requirement of
to: Pamela Dyson, Director/Chief
that in passing upon an application filed Rule 200(g) enable the Commission and
Information Officer, Securities and
under the rule, the Commission will self-regulatory organizations (‘‘SROs’’)
to examine and monitor for compliance Exchange Commission, c/o Remi Pavlik-
consider whether the participation of Simon, 100 F Street NE., Washington,
the registered investment company in a with the requirements of Rule 201 and
Rule 200(g). DC 20549, or send an email to: PRA_
joint enterprise, joint arrangement or
In addition, the information collected Mailbox@sec.gov.
profit sharing plan on the basis
proposed is consistent with the under Rule 201’s written policies and Dated: November 7, 2016.
provisions, policies and purposes of the procedures requirement applicable to Brent J. Fields,
Act and the extent to which such trading centers helps to ensure that
Secretary.
participation is on a basis different from trading centers do not execute or
[FR Doc. 2016–27248 Filed 11–10–16; 8:45 am]
or less advantageous than that of the display any impermissibly priced short
other participants. sale orders, unless an order is marked BILLING CODE 8011–01–P

‘‘short exempt,’’ in accordance with the
For the Commission, by the Division of
Investment Management, under delegated
rule’s requirements. Similarly, the
authority. information collected under the written
Brent J. Fields, policies and procedures requirement of
the broker-dealer provision of Rule
mstockstill on DSK3G9T082PROD with NOTICES

Secretary.
201(c) and the riskless principal
[FR Doc. 2016–27249 Filed 11–10–16; 8:45 am]
provision of Rule 201(d)(6) helps to
BILLING CODE 8011–01–P
ensure that broker-dealers comply with
5 Applicants state that any pledge of securities to
the requirements of these provisions.
secure an interfund loan could constitute a
The information collected pursuant to
purchase of securities for purposes of section the ‘‘short exempt’’ marking
17(a)(2) of the Act. requirement of Rule 200(g) also provides

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Document Created: 2018-10-24 10:49:12
Document Modified: 2018-10-24 10:49:12

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. Applicants request an order that would permit certain registered open-end management investment companies to participate in a joint lending and borrowing facility.
Dates		The application was filed on June 3, 2016, and amended on August 18, 2016 and October 18, 2016.
Contact		Jennifer Palmer, Senior Counsel, at (202) 551-5786 or Nadya Roytblat, Assistant Chief Counsel, at (202) 551-6823 (Division of Investment Management, Chief Counsel's Office).
FR Citation		81 FR 79548