82 FR 1397 - DFA Investment Dimensions Group Inc., et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 3 (January 5, 2017)

Page Range		1397-1398
FR Document		2016-31938

Federal Register, Volume 82 Issue 3 (Thursday, January 5, 2017)

[Federal Register Volume 82, Number 3 (Thursday, January 5, 2017)]
[Notices]
[Pages 1397-1398]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-31938]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No IC-32406; 812-14622]


DFA Investment Dimensions Group Inc., et al.; Notice of 
Application

December 29, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 15(a) of 
the Act and rule 18f-2 under the Act, as well as from certain 
disclosure requirements in rule 20a-1 under the Act, Items 
22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A 
under the Securities Exchange Act of 1934, and Sections 6-07(2)(a), 
(b), and (c) of Regulation S-X (``Disclosure Requirements''). The 
requested exemption would permit an investment adviser to hire and 
replace certain wholly-owned sub-advisers without shareholder approval 
and grant relief from the Disclosure Requirements as they relate to 
fees paid to the wholly-owned sub-advisers.

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Applicants:  DFA Investment Dimensions Group Inc. (``DFAIDG''), 
Dimensional Investment Group Inc. (``DIG'') (each of DFAIDG and DIG is 
organized as a Maryland corporation and registered under the Act as an 
open-end management investment company), Dimensional Emerging Markets 
Value Fund (``DEM''), The DFA Investment Trust Company (``DFAITC'') 
(each of DEM and DFAITC is organized as a Delaware statutory trust and 
registered under the Act as an open-end management investment company) 
(DFAITC, DFAIDG, DEM, and DIG, each a ``Trust, '' and together, the 
``Trusts'') and Dimensional Fund Advisors LP (the ``Initial Adviser'' 
collectively with the Trusts, the ``Applicants'').

Filing Dates: The application was filed March 4, 2016, and amended on 
August 11, 2016.

Hearing or Notification of Hearing:  An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on January 23, 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: 6300 Bee Cave Road, 
Building One, Austin, TX 78746.

FOR FURTHER INFORMATION CONTACT: Rachel Loko, Senior Counsel, at (202) 
551-6883, or Holly Hunter-Ceci, Branch Chief, at (202) 551-6825 
(Division of Investment Management, Chief Counsel's Office).

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

Summary of the Application

    1. The Adviser will serve as the investment adviser to the 
Subadvised Series pursuant to an investment management agreement with 
the relevant Trust (each an ``Investment Management Agreement'' and 
collectively, the ``Investment Management Agreements'').\1\ The Adviser 
will provide the Subadvised Series with continuous investment 
management of the assets of each Subadvised Series subject to the 
supervision of each Trust's board of trustees (``Board''). The 
Investment Management Agreements permit the Adviser, subject to the 
approval of the Board, to delegate to one or more wholly-owned sub-
advisers (each, a ``Wholly-Owned Sub-Adviser'' and collectively, the 
``Wholly-Owned Sub-Advisers'') the responsibility to provide the day-
to-day portfolio investment management of each Subadvised Series, 
subject to the supervision and direction of the Adviser. The primary 
responsibility for managing the Subadvised Series will remain vested in 
the Adviser. The Adviser will hire, evaluate, allocate assets to and 
oversee the Wholly-Owned Sub-Advisers, including determining whether a 
Wholly-Owned Sub-Adviser should be terminated, at all times subject to 
the authority of the Board.
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    \1\ Applicants request relief with respect to any existing and 
any future series of the Trusts and any other future registered 
open-end management company or series thereof that: (a) Is advised 
by the Initial Adviser or its successor or by a person controlling, 
controlled by, or under common control with the Initial Adviser or 
its successor (each, also an ``Adviser''); (b) uses the multi-
managers structure described in the application; and (c) complies 
with the terms and conditions of the application (each a 
``Subadvised Series''). 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.
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    2. Applicants request an exemption to permit the Adviser, subject 
to Board approval, to hire certain Wholly-Owned Sub-Advisers pursuant 
to Sub-Advisory Agreements and materially amend existing Sub-Advisory 
Agreements without obtaining the shareholder approval required under 
section 15(a) of the Act and rule 18f-2 under the Act.\2\ Applicants 
also seek an exemption from the Disclosure Requirements to permit a 
Subadvised Series to disclose (as both a dollar amount and a percentage 
of the Subadvised Series' net assets) the aggregate fees paid to the 
Adviser and any Wholly-Owned Sub-Adviser (collectively, ``Aggregate Fee 
Disclosure'').
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    \2\ The requested relief will not extend to any Sub-Adviser that 
is an affiliated person, as defined in section 2(a)(3) of the Act, 
of a Fund or the Adviser, other than by reason of serving as a sub-
adviser to one or more of the Funds (``Affiliated Sub-Adviser'').
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    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the Application. 
Such terms and conditions provide for, among other safeguards, 
appropriate disclosure to Subadvised Series shareholders and 
notification about sub-advisory changes and enhanced Board oversight to 
protect the interests of the Subadvised Series' shareholders.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provisions of the Act, or 
any rule thereunder, if such relief is necessary or appropriate in the 
public interest and consistent with the protection of investors and 
purposes fairly intended by the policy and provisions of the Act. 
Applicants

[[Page 1398]]

believe that the requested relief meets this standard because, as 
further explained in the Application, the Advisory Agreements will 
remain subject to shareholder approval, while the role of the Wholly-
Owned Sub-Advisers is substantially similar to that of individual 
portfolio managers, so that requiring shareholder approval of Sub-
Advisory Agreements would impose unnecessary delays and expenses on the 
Subadvised Series. Applicants believe that the requested relief from 
the Disclosure Requirements meets this standard because it will improve 
the Adviser's ability to negotiate fees paid to the Wholly-Owned Sub-
Advisers that are more advantageous for the Subadvised Series.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-31938 Filed 1-4-17; 8:45 am]
 BILLING CODE 8011-01-P

1398 Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices

believe that the requested relief meets changes relating to its Non-U.S. provide CDS services. The following
this standard because, as further Business (as defined below); (iii) from sections describe relevant portions of
explained in the Application, the the requirements set forth in the LCH SA’s Form CA–1 application.14
Advisory Agreements will remain introductory paragraph of Rule 17Ad–
A. Membership Standards
subject to shareholder approval, while 22(c)(2) and from Rule 17Ad–
the role of the Wholly-Owned Sub- 22(c)(2)(iii) 6 with respect to its annual LCH SA has established requirements
Advisers is substantially similar to that audited financial statements; and (iv) concerning membership, which include
of individual portfolio managers, so that Rule 17a–22 7 with respect to standards for financial responsibility,
requiring shareholder approval of Sub- requirements to provide the operational capacity, business
Advisory Agreements would impose Commission with physical copies of experience, and creditworthiness.15
unnecessary delays and expenses on the certain materials.8 Notice of the Members must comply with these
Subadvised Series. Applicants believe application and request for exemptive requirements on an ongoing basis.16
that the requested relief from the relief was published in the Federal With respect to financial
Disclosure Requirements meets this Register on October 3, 2016 (‘‘Notice’’).9 responsibility, LCH SA’s CDSClear
standard because it will improve the The Commission received no comments Rulebook contains net capital
Adviser’s ability to negotiate fees paid on the Notice. This Order approves LCH requirements that, among other things,
to the Wholly-Owned Sub-Advisers that SA’s application for registration as a establish minimum net capital
are more advantageous for the clearing agency and grants LCH SA’s requirements for members that are
Subadvised Series. request for exemptive relief. scalable based on the risk the members
introduce to LCH SA. To assess a
For the Commission, by the Division of II. Overview of LCH SA’s Application member’s creditworthiness, LCH SA
Investment Management, under delegated
authority. LCH SA maintains its principal office uses an internal credit scoring
in Paris, France and is a wholly-owned framework to determine the member’s
Eduardo A. Aleman,
subsidiary of LCH.Clearnet Group credit risk based on financial and
Assistant Secretary.
Limited (‘‘LCH Group’’).10 LCH SA is qualitative factors.17
[FR Doc. 2016–31938 Filed 1–4–17; 8:45 am] regulated as a bank and as a CCP under Regarding operational capacity and
BILLING CODE 8011–01–P French law by the Autorité des Marchés business experience requirements, a
Financiers, Autorité de Contrôle member must be able to demonstrate
Prudentiel et de Résolution, and Banque that it has sufficient expertise in
SECURITIES AND EXCHANGE de France.11 In addition, LCH SA is a clearing activities. This demonstration
COMMISSION CCP authorized to offer clearing services includes, among other things, that a
[Release No. 34–79707; File No. 600–36] in the European Union pursuant to the member’s systems and operations are
European Market Infrastructure sufficiently reliable and capable of
Self-Regulatory Organizations; LCH Regulation (‘‘EMIR’’) and is also supporting the performance of the
SA; Order Granting Application for registered with the U.S. Commodity member in meeting its obligations
Registration as a Clearing Agency and Futures Trading Commission (‘‘CFTC’’) (including having sufficient facilities,
Request for Exemptive Relief as a derivatives clearing organization equipment, personnel, hardware and
(‘‘DCO’’) to provide clearing services for software systems). Similarly, any
December 29, 2016.
broad-based index CDS to U.S. members prospective member of LCH SA must
I. Introduction and their customers.12 also demonstrate that it has appropriate
On July 5, 2016, Banque Centrale de In addition to LCH SA’s CDSClear banking arrangements.18
Compensation, which conducts service, LCH SA offers clearing services LCH SA ensures ongoing compliance
business under the name LCH SA (‘‘LCH for derivatives, exchange-traded futures with membership obligations by
SA’’), filed with the Securities and and options, cash equities, fixed monitoring its members and imposing
Exchange Commission (‘‘Commission’’) income, and energy instruments through several reporting obligations on them.
a Form CA–1 seeking registration as a three lines of CCP services: EquityClear, LCH SA monitors certain indicators on
clearing agency under Section 17A of CommodityClear, and RepoClear.13 an ongoing basis, including but not
the Securities Exchange Act of 1934 1 These three services constitute LCH limited, financial ratios, operational
(‘‘Exchange Act’’ or ‘‘Act’’) and Rule SA’s non-U.S. business in that they capabilities, external ratings, and market
17Ab2–1 thereunder.2 LCH SA is operate entirely outside the United implied ratings. In addition, each
seeking to provide central counterparty States and do not have any U.S. clearing member is required to notify LCH SA in
(‘‘CCP’’) services for U.S. persons for members (‘‘Non-U.S. Business’’). LCH writing of material changes to itself or
security-based swaps, in particular SA’s CDS clearing services are entirely its operations, such as changes in the
single-name credit default swaps located in the CDSClear business unit. direct or indirect controlling ownership,
(‘‘CDS’’), through its CDSClear business LCH SA’s Non-U.S. Business does not reduction in capital of more than 10%,
unit. the occurrence of insolvency
6 17 CFR 240.17Ad–22(c)(2) and 17 CFR
Along with its Form CA–1, LCH SA proceedings, the default of any of the
240.17Ad–22(c)(2)(iii).
submitted a request for exemptive relief 7 17 CFR 240.17a–22.
member’s customers, and any change to
(i) from Sections 5 and 6 of the Act 3 8 See Letter from Christophe Hémon, CEO, LCH
the member’s systems or operations that
with respect to its end-of-day pricing SA, to Brent J. Fields, Secretary, Securities and materially impact the member’s ability
process; (ii) from Section 19(b) of the Exchange Commission (August 9, 2016) (hereinafter
mstockstill on DSK3G9T082PROD with NOTICES

‘‘Request for Exemptive Relief’’). 14 The titles of the cited rules specify whether the
Act 4 and Rule 19b–4 thereunder 5 with 9 Securities Exchange Act Release No. 34–78941 rules are associated with CDSClear, LCH SA, or
respect to filing certain proposed rule (September 27, 2016), 81 FR 68074 (October 3, others.
2016) (File No. 600–36). 15 See LCH SA Form CA–1, Exhibit E–4
1 15 U.S.C. 78q–1. 10 See LCH SA Form CA–1, Exhibit A, 1. (CDSClear CDS Clearing Rule Book), Section 2.2.1
2 17 CFR 240.17Ab2–1. 11 See LCH SA Form CA–1, Exhibit J–3 (CDSClear (hereinafter, ‘‘CDSClear Rulebook’’).
3 15 U.S.C. 78e and 78f. Service Description), Section 2.3. 16 See id. at Section 2.2.2.
4 15 U.S.C. 78s(b). 12 Id. 17 See id. at Article 2.2.4.1.
5 17 CFR 240.19b–4. 13 See Request for Exemptive Relief at 4. 18 See id. at Section 2.2.1.

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Document Created: 2018-02-01 14:51:15
Document Modified: 2018-02-01 14:51:15

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of an application under section 6(c) of the Investment Company Act of 1940 (``Act'') for an exemption from section 15(a) of the Act and rule 18f-2 under the Act, as well as from certain disclosure requirements in rule 20a-1 under the Act, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, and Sections 6-07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements''). The requested exemption would permit an investment adviser to hire and replace certain wholly-owned sub-advisers without shareholder approval and grant relief from the Disclosure Requirements as they relate to fees paid to the wholly-owned sub-advisers.
Dates		The application was filed March 4, 2016, and amended on August 11, 2016.
Contact		Rachel Loko, Senior Counsel, at (202) 551-6883, or Holly Hunter-Ceci, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		82 FR 1397