82 FR 39635 - TIAA-CREF Funds, et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 160 (August 21, 2017)

Page Range		39635-39636
FR Document		2017-17540
Federal Register, Volume 82 Issue 160 (Monday, August 21, 2017)
[Federal Register Volume 82, Number 160 (Monday, August 21, 2017)]
[Notices]
[Pages 39635-39636]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17540]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32779; File No. 812-14723]


TIAA-CREF Funds, et al.

August 15, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    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.
    Applicants: TIAA-CREF Funds, TIAA-CREF Life Funds, College 
Retirement Equities Fund and TIAA Separate Account VA-1, each 
registered under the Act as an open-end management investment company 
with one or more series or accounts, and Teachers Advisors, LLC 
(``TA'') and TIAA-CREF Investment Management, LLC (``TCIM''), each 
registered as an investment adviser under the Investment Advisers Act 
of 1940.
    Filing Dates: The application was filed on December 8, 2016 and 
amended on April 13, 2017 and July 11, 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 September 11, 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: c/o Rachael Zufall, 
Nuveen, LLC, 8500 Andrew Carnegie Boulevard, Charlotte, NC 28262.

FOR FURTHER INFORMATION CONTACT: Asaf Barouk, Attorney-Advisor, at 
(202) 551-4029, or Kaitlin Bottock, 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.

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 not borrow under the facility for 
leverage purposes 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 or closed-end 
management investment company or series thereof for which TA or TCIM 
or any successor thereto or an investment adviser controlling, 
controlled by, or under common control with TA or TCIM 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. The term ``Adviser'' does not include Nuveen Fund 
Advisors, LLC, and the term ``Funds'' does not include any 
registered investment companies for which Nuveen Fund Advisors, LLC 
serves as investment adviser. The Funds that are closed-end 
management investment companies will not participate as borrowers in 
the interfund lending facility.
    \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, an 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. 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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[[Page 39636]]

    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 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 open-end Funds would remain subject to the requirement of section 
18(f)(1) that all borrowings of the open-end 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.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17540 Filed 8-18-17; 8:45 am]
 BILLING CODE 8011-01-P
39636 Federal Register / Vol. 82, No. 160 / Monday, August 21, 2017 / Notices

4. Applicants assert that the facility Commission to grant an order I. Self-Regulatory Organization’s
does not raise the concerns underlying permitting a transaction otherwise Statement of the Terms of Substance of
section 12(d)(1) of the Act given that the prohibited by section 17(a) if it finds the Proposed Rule Change
Funds are part of the same group of that (a) the terms of the proposed The Exchange proposes a proposal to
investment companies and there will be transaction are fair and reasonable and amend Supplementary Material .14 of
no duplicative costs or fees to the do not involve overreaching on the part Rule 504, entitled ‘‘Series of Options
Funds.4 Applicants also assert that the of any person concerned; (b) the Contracts Open for Trading.’’
proposed transactions do not raise the proposed transaction is consistent with The text of the proposed rule change
concerns underlying sections 17(a)(1), the policies of each registered is set forth below. Proposed new
17(a)(3), 17(d) and 21(b) of the Act as investment company involved; and (c) language is italicized; deleted text is in
the Funds would not engage in lending the proposed transaction is consistent brackets.
transactions that unfairly benefit with the general purposes of the Act. * * * * *
insiders or are detrimental to the Funds.
Rule 17d–1(b) under the Act provides
Applicants state that the facility will Rule 504. Series of Options Contracts
that in passing upon an application filed
offer both reduced borrowing costs and Open for Trading
enhanced returns on loaned funds to all under the rule, the Commission will
consider whether the participation of (a)–(h) No change.
participating Funds and each Fund
would have an equal opportunity to the registered investment company in a Supplementary Material to Rule 504
borrow and lend on equal terms based joint enterprise, joint arrangement or
.01–.13 No change.
on an interest rate formula that is profit sharing plan on the basis .14 Notwithstanding any other
objective and verifiable. With respect to proposed is consistent with the provision regarding the interval of strike
the relief from section 17(a)(2) of the provisions, policies and purposes of the prices of series of options on Exchange-
Act, applicants note that any collateral Act and the extent to which such Traded Fund Shares in this rule, the
pledged to secure an interfund loan participation is on a basis different from interval of strike prices on SPDR S&P
would be subject to the same conditions or less advantageous than that of the 500 ETF (‘‘SPY’’), iShares Core S&P 500
imposed by any other lender to a Fund other participants. ETF (‘‘IVV’’), and the SPDR Dow Jones
that imposes conditions on the quality For the Commission, by the Division of Industrial Average ETF (‘‘DIA’’) options
of or access to collateral for a borrowing Investment Management, under delegated will be $1 or greater.
(if the lender is another Fund) or the authority. * * * * *
same or better conditions (in any other
Eduardo A. Aleman,
circumstance).5 II. Self-Regulatory Organization’s
5. Applicants also believe that the Assistant Secretary. Statement of the Purpose of, and
limited relief from section 18(f)(1) of the [FR Doc. 2017–17540 Filed 8–18–17; 8:45 am] Statutory Basis for, the Proposed Rule
Act that is necessary to implement the BILLING CODE 8011–01–P Change
facility (because the lending Funds are In its filing with the Commission, the
not banks) is appropriate in light of the Exchange included statements
conditions and safeguards described in SECURITIES AND EXCHANGE concerning the purpose of and basis for
the application and because the open- COMMISSION the proposed rule change and discussed
end Funds would remain subject to the any comments it received on the
requirement of section 18(f)(1) that all [Release No. 34–81403; File No. SR–ISE– proposed rule change. The text of these
borrowings of the open-end Fund, 2017–79] statements may be examined at the
including combined interfund loans and places specified in Item IV below. The
bank borrowings, have at least 300% Self-Regulatory Organizations; Nasdaq Exchange has prepared summaries, set
asset coverage. ISE, LLC; Notice of Filing and forth in sections A, B, and C below, of
6. Section 6(c) of the Act permits the Immediate Effectiveness of Proposed the most significant aspects of such
Commission to exempt any persons or Rule Change To Amend statements.
transactions from any provision of the Supplementary Material .14 of Rule
Act if such exemption is necessary or 504, Entitled ‘‘Series of Options A. Self-Regulatory Organization’s
appropriate in the public interest and Contracts Open for Trading’’ Statement of the Purpose of, and
consistent with the protection of Statutory Basis for, the Proposed Rule
investors and the purposes fairly August 15, 2017. Change
intended by the policy and provisions of Pursuant to Section 19(b)(1) of the 1. Purpose
the Act. Section 12(d)(1)(J) of the Act Securities Exchange Act of 1934
provides that the Commission may The Exchange proposes to amend
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Rule 504 by modifying the strike setting
exempt any person, security, or
notice is hereby given that on August regime for the iShares Core S&P 500
transaction, or any class or classes of
10, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or ETF (‘‘IVV’’) options. Specifically, the
persons, securities, or transactions, from
‘‘Exchange’’) filed with the Securities Exchange proposes to modify the
any provision of section 12(d)(1) if the
and Exchange Commission interval setting regime for IVV options
exemption is consistent with the public
(‘‘Commission’’) the proposed rule to allow $1 strike price intervals above
interest and the protection of investors.
change as described in Items I and II
asabaliauskas on DSKBBXCHB2PROD with NOTICES

Section 17(b) of the Act authorizes the $200.
below, which Items have been prepared The Exchange believes that the
4 Applicants state that the obligation to repay an by the Exchange. The Commission is proposed rule change would make IVV
interfund loan could be deemed to constitute a publishing this notice to solicit options easier for investors and traders
security for the purposes of sections 17(a)(1) and comments on the proposed rule change to use and more tailored to their
12(d)(1) of the Act. from interested persons. investment needs. Additionally, the
5 Applicants state that any pledge of securities to

secure an interfund loan could constitute a
interval setting regime the Exchange
purchase of securities for purposes of section 1 15 U.S.C. 78s(b)(1). proposes to apply to IVV options is
17(a)(2) of the Act. 2 17 CFR 240.19b–4. currently applied to options on units of

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Document Created: 2017-08-19 00:44:55
Document Modified: 2017-08-19 00:44:55
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.
Dates		The application was filed on December 8, 2016 and amended on April 13, 2017 and July 11, 2017.
Contact		Asaf Barouk, Attorney-Advisor, at (202) 551-4029, or Kaitlin Bottock, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		82 FR 39635