82_FR_43044 82 FR 42869 - Active Weighting Funds ETF Trust and Active Weighting Advisors LLC

82 FR 42869 - Active Weighting Funds ETF Trust and Active Weighting Advisors LLC

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 175 (September 12, 2017)

Page Range42869-42870
FR Document2017-19236

Federal Register, Volume 82 Issue 175 (Tuesday, September 12, 2017) 
[Federal Register Volume 82, Number 175 (Tuesday, September 12, 2017)]
[Notices]
[Pages 42869-42870]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19236]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32808; File No. 812-14697]


Active Weighting Funds ETF Trust and Active Weighting Advisors 
LLC

September 6, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    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 (``BDCs''), and registered 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.

Applicants: Active Weighting Funds ETF Trust (the ``Trust''), a 
Delaware statutory trust that will be registered under the Act as an 
open-end management investment company with multiple series, and Active 
Weighting Advisors LLC (the ``Initial Advisor''), a limited liability 
company organized under the laws of the state of Delaware that is, or 
will be, registered as an investment adviser under the Investment 
Advisers Act of 1940.

Filing Dates: The application was filed on August 31, 2016, and amended 
on January 13, 2017, and May 25, 2017. Applicants have agreed to file 
an amendment during the notice period, the substance of which is 
reflected in this notice.

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 October 2, 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, 490 Royal Lake 
Drive, Cape Girardeau, MO 63701.

[[Page 42870]]


FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or Robert H. Shapiro, 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 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) each 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) each 
Underlying Fund that is a registered open-end management investment 
company 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 Funds 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 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 not only to any 
existing series of the Trust, but that the order also extend to any 
future series of the Trust and any other existing or future 
registered open-end management investment companies and any series 
thereof that are, or may in the future be, advised by the Initial 
Advisor or its successor or any other investment adviser 
controlling, controlled by, or under common control with the Initial 
Advisor or its successor and that are part of the same group of 
investment companies, as defined in section 12(d)(1)(G)(ii) of the 
Act, as the Trust (together with the existing series of the Trust, 
each series a ``Fund'' and collectively, the ``Funds''). 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 BDCs, 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 are not requesting relief for a Fund of Funds to 
invest in BDCs and registered closed-end investment companies that 
are not listed and traded on a national securities exchange.
    \4\ Applicants note that a Fund of Funds generally would 
purchase and sell shares of an Underlying Fund that operates as an 
ETF or closed-end fund through secondary market transactions rather 
than through principal transactions with the Underlying Fund. 
Applicants nevertheless request relief from sections 17(a)(l) and 
(2) to permit each Fund of Funds that is an affiliated person, or an 
affiliated person of an affiliated person, as defined in section 
2(a)(3) of the 1940 Act, of an ETF or closed-end fund to purchase or 
redeem shares from the ETF or closed-end fund. Applicants are not 
seeking relief from section 17(a) for, and the requested relief will 
not apply to, transactions where an ETF, BDC or closed-end fund 
could be deemed an affiliated person, or an affiliated person of an 
affiliated person, of a Fund of Funds because an investment adviser 
to the ETF, BDC or closed-end fund or an entity controlling, 
controlled by or under common control with the investment adviser to 
the ETF, BDC or closed-end fund is also an investment adviser to the 
Fund of Funds.
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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. 2017-19236 Filed 9-11-17; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 42869 rejecting orders for vertical and calendar Paper Comments Notice of an application for an order spread strategies that are entered at a • Send paper comments in triplicate under section 12(d)(1)(J) of the negative price will protect investors to Brent J. Fields, Secretary, Securities Investment Company Act of 1940 (the from executing orders that were likely and Exchange Commission, 100 F Street ‘‘Act’’) for an exemption from sections entered in error.31 The Commission NE., Washington, DC 20549–1090. 12(d)(1)(A), (B), and (C) of the Act and believes that waiver of the operative under sections 6(c) and 17(b) of the Act All submissions should refer to File delay is consistent with the protection for an exemption from sections 17(a)(1) Number SR–NYSEAMER–2017–07. This of investors and the public interest and (2) of the Act. The requested order file number should be included on the because the proposed rules are designed would permit certain registered open- subject line if email is used. To help the end investment companies to acquire to reduce investor confusion and to Commission process and review your shares of certain registered open-end prevent the entry and execution of comments more efficiently, please use investment companies, registered erroneously priced ECOs. Therefore, the only one method. The Commission will closed-end investment companies, Commission hereby waives the post all comments on the Commission’s business development companies, as operative delay and designates the Internet Web site (http://www.sec.gov/ defined in section 2(a)(48) of the Act proposed rule change operative upon rules/sro.shtml). Copies of the (‘‘BDCs’’), and registered unit filing.32 submission, all subsequent investment trusts (collectively, At any time within 60 days of the amendments, all written statements filing of the proposed rule change, the ‘‘Underlying Funds’’) that are within with respect to the proposed rule and outside the same group of Commission summarily may change that are filed with the temporarily suspend such rule change if investment companies as the acquiring Commission, and all written investment companies, in excess of the it appears to the Commission that such communications relating to the action is necessary or appropriate in the limits in section 12(d)(1) of the Act. proposed rule change between the APPLICANTS: Active Weighting Funds public interest, for the protection of Commission and any person, other than investors, or otherwise in furtherance of ETF Trust (the ‘‘Trust’’), a Delaware those that may be withheld from the statutory trust that will be registered the purposes of the Act. If the public in accordance with the Commission takes such action, the under the Act as an open-end provisions of 5 U.S.C. 552, will be management investment company with Commission shall institute proceedings available for Web site viewing and to determine whether the proposed rule multiple series, and Active Weighting printing in the Commission’s Public Advisors LLC (the ‘‘Initial Advisor’’), a change should be approved or Reference Room, 100 F Street NE., disapproved. limited liability company organized Washington, DC 20549, on official under the laws of the state of Delaware IV. Solicitation of Comments business days between the hours of that is, or will be, registered as an 10:00 a.m. and 3:00 p.m. Copies of the investment adviser under the Interested persons are invited to filing also will be available for submit written data, views, and Investment Advisers Act of 1940. inspection and copying at the principal arguments concerning the foregoing, FILING DATES: The application was filed office of the Exchange. All comments including whether the proposed rule on August 31, 2016, and amended on received will be posted without change; change is consistent with the Act. January 13, 2017, and May 25, 2017. the Commission does not edit personal Comments may be submitted by any of Applicants have agreed to file an identifying information from the following methods: amendment during the notice period, submissions. You should submit only the substance of which is reflected in Electronic Comments information that you wish to make this notice. available publicly. All submissions • Use the Commission’s Internet should refer to File Number SR– HEARING OR NOTIFICATION OF HEARING: An comment form (http://www.sec.gov/ NYSEAMER–2017–07 and should be order granting the requested relief will rules/sro.shtml); or submitted on or before October 3, 2017. be issued unless the Commission orders • Send an email to rule-comments@ a hearing. Interested persons may For the Commission, by the Division of request a hearing by writing to the sec.gov. Please include File Number SR– Trading and Markets, pursuant to delegated NYSEAMER–2017–07 on the subject Commission’s Secretary and serving authority.33 line. applicants with a copy of the request, Eduardo A. Aleman, personally or by mail. Hearing requests Assistant Secretary. should be received by the Commission 31 As discussed above, the proposal also allows [FR Doc. 2017–19239 Filed 9–11–17; 8:45 am] by 5:30 p.m. on October 2, 2017, and the Exchange to deactivate the Reasonability Check for calendar spread strategies. The Exchange will BILLING CODE 8011–01–P should be accompanied by proof of notify ATP Holders and ATP Firms by electronic service on the applicants, in the form of message of any such deactivation or re-activation. The Exchange believes that this discretion is an affidavit, or, for lawyers, a certificate SECURITIES AND EXCHANGE of service. Pursuant to rule 0–5 under necessary because a corporate action, for example, could result in the Reasonability Check for calendar COMMISSION the Act, hearing requests should state spread strategies rejecting an otherwise valid [Investment Company Act Release No. the nature of the writer’s interest, any strategy. The proposal also provides that the Reasonability Check for calendar spread strategies 32808; File No. 812–14697] facts bearing upon the desirability of a will not apply to ECOs that are entered on the hearing on the matter, the reason for the Trading Floor. The Exchange notes that such orders Active Weighting Funds ETF Trust and request, and the issues contested. pmangrum on DSK3GDR082PROD with NOTICES1 are subject to manual handling by individuals who Active Weighting Advisors LLC Persons who wish to be notified of a will have evaluated the price of the order based on hearing may request notification by market conditions. The Exchange further notes that September 6, 2017. another exchange has adopted a similar rule. See writing to the Commission’s Secretary. AGENCY: Securities and Exchange note 19, supra. ADDRESSES: Secretary, U.S. Securities 32 For purposes only of waiving the 30-day Commission (‘‘Commission’’). and Exchange Commission, 100 F Street operative delay, the Commission also has ACTION: Notice. considered the proposed rule’s impact on NE., Washington, DC 20549–1090. efficiency, competition, and capital formation. See Applicants, 490 Royal Lake Drive, Cape 15 U.S.C. 78c(f). 33 17 CFR 200.30–3(a)(12). Girardeau, MO 63701. VerDate Sep<11>2014 15:19 Sep 11, 2017 Jkt 241001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 E:\FR\FM\12SEN1.SGM 12SEN1

42870 Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices FOR FURTHER INFORMATION CONTACT: state that such transactions will be intended by the policy and provisions of Christine Y. Greenlees, Senior Counsel, consistent with the policies of each the Act. at (202) 551–6879, or Robert H. Shapiro, Fund of Funds and each Underlying For the Commission, by the Division of Branch Chief, at (202) 551–6821 Fund and with the general purposes of Investment Management, pursuant to (Division of Investment Management, the Act and will be based on the net delegated authority. Chief Counsel’s Office). asset values of the Underlying Funds. Eduardo A. Aleman, SUPPLEMENTARY INFORMATION: The 2. Applicants agree that any order Assistant Secretary. following is a summary of the granting the requested relief will be [FR Doc. 2017–19236 Filed 9–11–17; 8:45 am] application. The complete application subject to the terms and conditions BILLING CODE 8011–01–P may be obtained via the Commission’s stated in the application. Such terms Web site by searching for the file and conditions are designed to, among number, or for an applicant using the other things, help prevent any potential SECURITIES AND EXCHANGE Company name box, at http:// (i) undue influence over an Underlying COMMISSION www.sec.gov/search/search.htm, or by Fund that is not in the same ‘‘group of calling (202) 551–8090. investment companies’’ as the Fund of Proposed Collection; Comment Funds through control or voting power, Request Summary of the Application or in connection with certain services, 1. Applicants request an order to transactions, and underwritings, (ii) Upon Written Request, Copies Available permit (a) each Fund 1 (each a ‘‘Fund of excessive layering of fees, and (iii) From: U.S. Securities and Exchange Funds’’) to acquire shares of Underlying overly complex fund structures, which Commission, Office of FOIA Services, Funds 2 in excess of the limits in are the concerns underlying the limits 100 F Street NE., Washington, DC sections 12(d)(1)(A) and (C) of the Act in sections 12(d)(1)(A), (B), and (C) of 20549–2736 and (b) each Underlying Fund that is a the Act. Extension: registered open-end management 3. Section 12(d)(1)(J) of the Act Rule 15c1–6, SEC File No. 270–423, OMB investment company or series thereof, provides that the Commission may Control No. 3235–0472 their principal underwriters and any exempt any person, security, or Notice is hereby given that pursuant broker or dealer registered under the transaction, or any class or classes of to the Paperwork Reduction Act of 1995 Securities Exchange Act of 1934 to sell persons, securities, or transactions, from (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the shares of the Underlying Funds to the any provision of section 12(d)(1) if the Securities and Exchange Commission Fund of Funds in excess of the limits in exemption is consistent with the public (‘‘Commission’’) is soliciting comments section 12(d)(1)(B) of the Act.3 interest and the protection of investors. Applicants also request an order of on the existing collection of information Section 17(b) of the Act authorizes the provided for in Rule 15c1–6 (17 CFR exemption under sections 6(c) and 17(b) Commission to grant an order of the Act from the prohibition on 240.15c1–6) under the Securities permitting a transaction otherwise Exchange Act of 1934 (15 U.S.C. 78a et certain affiliated transactions in section prohibited by section 17(a) if it finds 17(a) of the Act to the extent necessary seq.) (‘‘Exchange Act’’). The that (a) the terms of the proposed Commission plans to submit this to permit the Underlying Funds to sell transaction are fair and reasonable and their shares to, and redeem their shares existing collection of information to the do not involve overreaching on the part Office of Management and Budget from, the Funds of Funds.4 Applicants of any person concerned; (b) the (‘‘OMB’’) for extension and approval. 1 Applicants request that the order apply not only proposed transaction is consistent with Rule 15c1–6 states that any broker- to any existing series of the Trust, but that the order the policies of each registered dealer trying to sell to or buy from a also extend to any future series of the Trust and any investment company involved; and (c) customer a security in a primary or other existing or future registered open-end the proposed transaction is consistent secondary distribution in which the management investment companies and any series thereof that are, or may in the future be, advised with the general purposes of the Act. broker-dealer is participating or is by the Initial Advisor or its successor or any other Section 6(c) of the Act permits the otherwise financially interested must investment adviser controlling, controlled by, or Commission to exempt any persons or give the customer written notification of under common control with the Initial Advisor or transactions from any provision of the its successor and that are part of the same group of the broker-dealer’s participation or investment companies, as defined in section Act if such exemption is necessary or interest at or before completion of the 12(d)(1)(G)(ii) of the Act, as the Trust (together with appropriate in the public interest and transaction. The Commission estimates the existing series of the Trust, each series a ‘‘Fund’’ consistent with the protection of that 394 respondents collect information and collectively, the ‘‘Funds’’). For purposes of the investors and the purposes fairly requested order, ‘‘successor’’ is limited to an entity annually under Rule 15c1–6 and that that results from a reorganization into another each respondent would spend jurisdiction or a change in the type of business Fund that operates as an ETF or closed-end fund approximately 10 hours annually organization. For purposes of the request for relief, through secondary market transactions rather than the term ‘‘group of investment companies’’ means through principal transactions with the Underlying complying with the collection of any two or more registered investment companies, Fund. Applicants nevertheless request relief from information requirement (approximately including closed-end investment companies and sections 17(a)(l) and (2) to permit each Fund of 3,940 hours in aggregate). BDCs, that hold themselves out to investors as Funds that is an affiliated person, or an affiliated Written comments are invited on: (a) related companies for purposes of investment and person of an affiliated person, as defined in section investor services. 2(a)(3) of the 1940 Act, of an ETF or closed-end Whether the proposed collection of 2 Certain of the Underlying Funds have obtained fund to purchase or redeem shares from the ETF or information is necessary for the proper exemptions from the Commission necessary to closed-end fund. Applicants are not seeking relief performance of the functions of the pmangrum on DSK3GDR082PROD with NOTICES1 permit their shares to be listed and traded on a from section 17(a) for, and the requested relief will Commission, including whether the national securities exchange at negotiated prices not apply to, transactions where an ETF, BDC or and, accordingly, to operate as an exchange-traded closed-end fund could be deemed an affiliated information shall have practical utility; fund (‘‘ETF’’). person, or an affiliated person of an affiliated (b) the accuracy of the Commission’s 3 Applicants are not requesting relief for a Fund person, of a Fund of Funds because an investment estimates of the burden of the proposed of Funds to invest in BDCs and registered closed- adviser to the ETF, BDC or closed-end fund or an collection of information; (c) ways to end investment companies that are not listed and entity controlling, controlled by or under common traded on a national securities exchange. control with the investment adviser to the ETF, enhance the quality, utility, and clarity 4 Applicants note that a Fund of Funds generally BDC or closed-end fund is also an investment of the information to be collected; and would purchase and sell shares of an Underlying adviser to the Fund of Funds. (d) ways to minimize the burden of the VerDate Sep<11>2014 15:19 Sep 11, 2017 Jkt 241001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\12SEN1.SGM 12SEN1


Document Created: 2018-10-24 14:13:50
Document Modified: 2018-10-24 14:13:50
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesThe application was filed on August 31, 2016, and amended on January 13, 2017, and May 25, 2017. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice.
ContactChristine Y. Greenlees, Senior Counsel, at (202) 551-6879, or Robert H. Shapiro, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation82 FR 42869 
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