82 FR 11251 - Brinker Capital Destinations Trust, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 33 (February 21, 2017)

Page Range		11251-11252
FR Document		2017-03297

Federal Register, Volume 82 Issue 33 (Tuesday, February 21, 2017)

[Federal Register Volume 82, Number 33 (Tuesday, February 21, 2017)]
[Notices]
[Pages 11251-11252]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-03297]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32478; File No. 812-14724]


Brinker Capital Destinations Trust, et al.; Notice of Application

February 14, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 12(d)(1)(J) 
of the Investment Company Act of 1940 (the ``Act'') for an exemption 
from sections 12(d)(1)(A), (B), and (C) of the Act and under sections 
6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 
(2) of the Act. The requested order would permit certain registered 
open-end investment companies to acquire shares of certain registered 
open-end investment companies, registered closed-end investment 
companies, business development companies, as defined in section 
2(a)(48) of the Act, and unit investment trusts (collectively, 
``Underlying Funds'') that are within and outside the same group of 
investment companies as the acquiring investment companies, in excess 
of the limits in section 12(d)(1) of the Act.

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Applicants: Brinker Capital Destinations Trust, a Delaware statutory 
trust that is registered under the Act as an open-end management 
investment company with multiple series, and Brinker Capital, Inc., a 
Delaware Corporation registered as an investment adviser under the 
Investment Advisers Act of 1940.

DATES: Filing Dates: The application was filed on December 8, 2016 and 
amended on February 1, 2017.

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 March 14, 2017 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: Jason B. Moore, 
Brinker Capital Destinations Trust, 1055 Westlakes Drive, Berwyn, PA 
19312; and John J. O'Brien, Esq., Morgan, Lewis & Bockius LLP, 1701 
Market Street, Philadelphia, PA 19103.

FOR FURTHER INFORMATION CONTACT: Jennifer O. Palmer, Senior Counsel, at 
(202) 551-5786, or Nadya Roytblat, Assistant Chief Counsel, 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.

Summary of the Application

    1. Applicants request an order to permit (a) a Fund \1\ (each a 
``Fund of Funds'') to acquire shares of Underlying Funds \2\ in excess 
of the limits in sections 12(d)(1)(A) and (C) of the Act and (b) the 
Underlying Funds that are registered open-end investment companies or 
series thereof, their principal underwriters and any broker or dealer 
registered under the Securities Exchange Act of 1934 to sell shares of 
the Underlying Fund to the Fund of Funds in excess of the limits in 
section 12(d)(1)(B) of the Act.\3\ Applicants also request an order of 
exemption under

[[Page 11252]]

sections 6(c) and 17(b) of the Act from the prohibition on certain 
affiliated transactions in section 17(a) of the Act to the extent 
necessary to permit the Underlying Funds to sell their shares to, and 
redeem their shares from, the Funds of Funds.\4\ Applicants state that 
such transactions will be consistent with the policies of each Fund of 
Funds and each Underlying Fund and with the general purposes of the Act 
and will be based on the net asset values of the Underlying Funds.
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    \1\ Applicants request that the order apply to each existing and 
future series of Brinker Capital Destinations Trust and to each 
existing and future registered open-end investment company or series 
thereof that is advised by Brinker Capital, Inc. or its successor or 
by any other investment adviser controlling, controlled by or under 
common control with Brinker Capital, Inc. or its successor and is 
part of the same ``group of investment companies'' as Brinker 
Capital Destinations Trust (each, a ``Fund''). For purposes of the 
requested order, ``successor'' is limited to an entity that results 
from a reorganization into another jurisdiction or a change in the 
type of business organization. For purposes of the request for 
relief, the term ``group of investment companies'' means any two or 
more registered investment companies, including closed-end 
investment companies and business development companies, that hold 
themselves out to investors as related companies for purposes of 
investment and investor services.
    \2\ Certain of the Underlying Funds have obtained exemptions 
from the Commission necessary to permit their shares to be listed 
and traded on a national securities exchange at negotiated prices 
and, accordingly, to operate as an exchange-traded fund (``ETF'').
    \3\ Applicants do not request relief for Funds of Funds to 
invest in reliance on the order in business development companies 
and registered closed-end investment companies that are not listed 
and traded on a national securities exchange.
    \4\ A Fund of Funds generally would purchase and sell shares of 
an Underlying Fund that operates as an ETF through secondary market 
transactions rather than through principal transactions with the 
Underlying Fund. Applicants nevertheless request relief from section 
17(a) to permit a Fund of Funds to purchase or redeem shares from 
the ETF. A Fund of Funds will purchase and sell shares of an 
Underlying Fund that is a closed-end fund through secondary market 
transactions at market prices rather than through principal 
transactions with the closed-end fund. Accordingly, applicants are 
not requesting section 17(a) relief with respect to transactions in 
shares of closed-end funds (including business development 
companies).
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    2. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the application. 
Such terms and conditions are designed to, among other things, help 
prevent any potential (i) undue influence over an Underlying Fund that 
is not in the same ``group of investment companies'' as the Fund of 
Funds through control or voting power, or in connection with certain 
services, transactions, and underwritings, (ii) excessive layering of 
fees, and (iii) overly complex fund structures, which are the concerns 
underlying the limits in sections 12(d)(1)(A), (B), and (C) of the Act.
    3. 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. 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.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03297 Filed 2-17-17; 8:45 am]
BILLING CODE 8011-01-P

11252 Federal Register / Vol. 82, No. 33 / Tuesday, February 21, 2017 / Notices

sections 6(c) and 17(b) of the Act from consistent with the protection of the places specified in Item IV below.
the prohibition on certain affiliated investors and the purposes fairly The Exchange has prepared summaries,
transactions in section 17(a) of the Act intended by the policy and provisions of set forth in sections A, B and C below,
to the extent necessary to permit the the Act. of the most significant parts of such
Underlying Funds to sell their shares to, For the Commission, by the Division of statements.
and redeem their shares from, the Funds Investment Management, pursuant to A. Self-Regulatory Organization’s
of Funds.4 Applicants state that such delegated authority.
Statement of the Purpose of, and the
transactions will be consistent with the Eduardo A. Aleman, Statutory Basis for, the Proposed Rule
policies of each Fund of Funds and each Assistant Secretary. Change
Underlying Fund and with the general [FR Doc. 2017–03297 Filed 2–17–17; 8:45 am]
purposes of the Act and will be based 1. Purpose
BILLING CODE 8011–01–P
on the net asset values of the (1) Overview
Underlying Funds.
2. Applicants agree that any order The Exchange proposes to amend the
SECURITIES AND EXCHANGE CHX Rules to adopt the CHX Liquidity
granting the requested relief will be COMMISSION
subject to the terms and conditions Enhancing Access Delay (‘‘LEAD’’). In
stated in the application. Such terms [Release No. 34–80041; File No. SR–CHX– sum, LEAD will require all new
and conditions are designed to, among 2017–04] incoming orders, cancel and cancel/
other things, help prevent any potential replace messages to be subject to a 350-
Self-Regulatory Organizations; microsecond intentional access delay;
(i) undue influence over an Underlying
Chicago Stock Exchange, Inc.; Notice provided, however, that (1) new
Fund that is not in the same ‘‘group of
of Filing of Proposed Rule Change To incoming orders 3 submitted by LEAD
investment companies’’ as the Fund of
Adopt the CHX Liquidity Enhancing Market Makers (‘‘LEAD MM’’), a new
Funds through control or voting power,
Access Delay class of CHX Market Maker 4 with
or in connection with certain services,
transactions, and underwritings, (ii) February 14, 2017. heightened quoting and trading
excessive layering of fees, and (iii) Pursuant to Section 19(b)(1) of the obligations, that would be immediately
overly complex fund structures, which Securities Exchange Act of 1934 ranked on the CHX book without
are the concerns underlying the limits (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 executing against any resting orders on
in sections 12(d)(1)(A), (B), and (C) of notice is hereby given that on February the CHX book and (2) certain cancel
the Act. 10, 2017, the Chicago Stock Exchange, messages related to resting orders that
3. Section 12(d)(1)(J) of the Act Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with were submitted by LEAD MMs will not
provides that the Commission may the Securities and Exchange be delayed. LEAD will be applied to all
exempt any person, security, or Commission (the ‘‘Commission’’) the securities traded on the Exchange
transaction, or any class or classes of proposed rule change as described in throughout the trading day.5 LEAD is
persons, securities, or transactions, from Items I, II and III below, which Items designed to enhance displayed liquidity
any provision of section 12(d)(1) if the have been prepared by the self- and price discovery by minimizing the
exemption is consistent with the public regulatory organization. The effectiveness of latency arbitrage
interest and the protection of investors. Commission is publishing this notice to strategies that diminish displayed
Section 17(b) of the Act authorizes the solicit comments on the proposed rule liquidity and impair price discovery, as
Commission to grant an order change from interested persons. described in detail below.
permitting a transaction otherwise (2) Latency Arbitrage
prohibited by section 17(a) if it finds I. Self-Regulatory Organization’s
that (a) the terms of the proposed Statement of the Terms of Substance of As used herein, ‘‘latency arbitrage’’
transaction are fair and reasonable and the Proposed Rule Change means the practice of exploiting
do not involve overreaching on the part CHX proposes to amend the Rules of 3 ‘‘New incoming orders’’ are orders received by
of any person concerned; (b) the the Exchange (‘‘CHX Rules’’) to adopt the Matching System for the first time. As discussed
proposed transaction is consistent with the CHX Liquidity Enhancing Access below, LEAD will not apply to other situations
the policies of each registered Delay. The text of this proposed rule where existing orders or portions thereof are treated
investment company involved; and (c) change is available on the Exchange’s as incoming orders, such as (1) resting orders that
are price slid into a new price point pursuant to the
the proposed transaction is consistent Web site at http://www.chx.com/ CHX Only Price Sliding or Limit Up-Limit Down
with the general purposes of the Act. regulatory-operations/rule-filings/, at Price Sliding Processes and (2) unexecuted
Section 6(c) of the Act permits the the principal office of the Exchange, and remainders of routed orders released into the
Commission to exempt any persons or Matching System. See CHX Article 1, Rule
at the Commission’s Public Reference 2(b)(1)(C); see also CHX Article 20, Rule 2A(b); see
transactions from any provision of the Room. also CHX Article 20, Rule 8(b)(7). Incidentally, the
Act if such exemption is necessary or Exchange is proposing to amend CHX Article 20,
appropriate in the public interest and II. Self-Regulatory Organization’s Rule 8(a)(7) to delete the word ‘‘new’’ from the last
Statement of the Purpose of, and sentence, so that the rule provides, in pertinent
4 A Fund of Funds generally would purchase and Statutory Basis for, the Proposed Rule part, that if no balance exists at the time a part of
sell shares of an Underlying Fund that operates as Change an unexecuted remainder of a routed order is
an ETF through secondary market transactions returned to the Matching System, it shall be treated
rather than through principal transactions with the In its filing with the Commission, the an incoming order.
4 See CHX Article 1, Rule 1(tt) defining ‘‘Market
Underlying Fund. Applicants nevertheless request self-regulatory organization included
Maker’’; see also generally CHX Article 16 (Market
sradovich on DSK3GMQ082PROD with NOTICES

relief from section 17(a) to permit a Fund of Funds statements concerning the purpose of,
to purchase or redeem shares from the ETF. A Fund Makers).
of Funds will purchase and sell shares of an
and basis for, the proposed rule change 5 Each trading day is divided into four trading

Underlying Fund that is a closed-end fund through and discussed any comments it received sessions: Early session, regular trading session, late
secondary market transactions at market prices on the proposed rule change. The text trading session and late crossing session. See CHX
rather than through principal transactions with the of those statements may be examined at Article 20, Rule 1(b). The Exchange only accepts
closed-end fund. Accordingly, applicants are not cross orders during the late crossing session and
requesting section 17(a) relief with respect to thus does not accept or rank any single-sided orders
1 15 U.S.C. 78s(b)(1).
transactions in shares of closed-end funds during the late crossing session. See CHX Article 1,
(including business development companies). 2 17 CFR 240.19b–4. Rule 2(a)(2) defining ‘‘cross order.’’

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Document Created: 2018-02-01 15:04:19
Document Modified: 2018-02-01 15:04:19

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 under section 12(d)(1)(J) of the Investment Company Act of 1940 (the ``Act'') for an exemption from sections 12(d)(1)(A), (B), and (C) of the Act and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (2) of the Act. The requested order would permit certain registered open-end investment companies to acquire shares of certain registered open-end investment companies, registered closed-end investment companies, business development companies, as defined in section 2(a)(48) of the Act, and unit investment trusts (collectively, ``Underlying Funds'') that are within and outside the same group of investment companies as the acquiring investment companies, in excess of the limits in section 12(d)(1) of the Act.
Dates		Filing Dates: The application was filed on December 8, 2016 and amended on February 1, 2017.
Contact		Jennifer O. Palmer, Senior Counsel, at (202) 551-5786, or Nadya Roytblat, Assistant Chief Counsel, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		82 FR 11251