82_FR_46306 82 FR 46116 - Wells Fargo Exchange-Traded Funds Trust, et al.

82 FR 46116 - Wells Fargo Exchange-Traded Funds Trust, et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 190 (October 3, 2017)

Page Range46116-46117
FR Document2017-21131

Federal Register, Volume 82 Issue 190 (Tuesday, October 3, 2017)
[Federal Register Volume 82, Number 190 (Tuesday, October 3, 2017)]
[Notices]
[Pages 46116-46117]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-21131]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32836; 812-14681]


Wells Fargo Exchange-Traded Funds Trust, et al.

September 27, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') for an exemption from 
sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1 
under the Act, under sections 6(c) and 17(b) of the Act for an 
exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under 
section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and 
12(d)(1)(B) of the Act. The requested order would permit (a) index-
based series of certain open-end management investment companies 
(``Funds'') to issue shares redeemable in large aggregations 
(``Creation Units''); (b) secondary market transactions in Fund shares 
to occur at negotiated market prices rather than at net asset value 
(``NAV''); (c) certain Funds to pay redemption proceeds, under certain 
circumstances, more than seven days after the tender of shares for 
redemption; (d) certain affiliated persons of a Fund to deposit 
securities into, and receive securities from, the Fund in connection 
with the purchase and redemption of Creation Units; (e) certain 
registered management investment companies and unit investment trusts 
outside of the same group of investment companies as the Funds (``Funds 
of Funds'') to acquire shares of the Funds; (f) certain Funds (``Feeder 
Funds'') to create and redeem Creation Units in-kind in a master-feeder 
structure; and (g) certain Funds to issue Shares in less than Creation 
Unit size to investors participating in a distribution reinvestment 
program.
    Applicants: Wells Fargo Exchange-Traded Funds Trust (the 
``Trust''), a Delaware statutory trust, which will register under the 
Act as an open-end management investment company with multiple series, 
Wells Fargo Funds Management, LLC (the ``Initial Adviser''), a Delaware 
limited liability company registered as an investment adviser under the 
Investment Advisers Act of 1940, and Wells Fargo Funds Distributor, LLC 
(the ``Initial Distributor''), a Delaware limited liability company 
(together with any future distributor, the ``Distributor'').
    Filing Dates: The application was filed on August 5, 2016, and 
amended on December 2, 2016, April 19, 2017, and September 15, 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 October 23, 2017, and should be accompanied by proof of 
service on 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, Securities and Exchange Commission, 100 F Street 
NE., Washington, DC 20549-1090; Applicants: Devin F. Sullivan, Esq., 
Wells Fargo Funds Management, LLC, 45 Fremont Street, 26th Floor, San 
Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at 
(202) 551-6915, or Daniele Marchesani, 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 that would allow Funds to operate as 
index-based exchange traded funds (``ETFs'').\1\ Fund shares will be 
purchased and redeemed at their NAV in Creation Units (other than 
pursuant to a distribution reinvestment program), as described in the 
application. All orders to purchase Creation Units and all redemption 
requests will be placed by or through an ``Authorized Participant'', 
which will have signed a participant agreement with the Distributor. 
Shares will be listed and traded individually on a national securities 
exchange, where share prices will be based on the current bid/offer 
market. Certain Funds may operate as Feeder Funds in a master-feeder 
structure. Any order granting the requested relief would be subject to 
the terms and conditions stated in the application.
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    \1\ Applicants request that the order apply to the initial fund 
and any additional series of the Trust, and any other existing or 
future open-end management investment company or existing or future 
series thereof (each, included in the term ``Fund''), each of which 
will operate as an ETF, and their respective existing or future 
master funds, and will track a specified index comprised of domestic 
and/or foreign equity securities and/or domestic and/or foreign 
fixed income securities (each, an ``Underlying Index''). Any Fund 
will (a) be advised by the Initial Adviser or an entity controlling, 
controlled by, or under common control with the Initial Adviser 
(each, an ``Adviser'') and (b) comply with the terms and conditions 
of the application.
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    2. Each Fund will hold investment positions selected to correspond 
closely to the performance of an Underlying Index. In the case of Self-
Indexing

[[Page 46117]]

Funds, an affiliated person, as defined in section 2(a)(3) of the Act 
(``Affiliated Person''), or an affiliated person of an Affiliated 
Person (``Second-Tier Affiliate''), of the Trust or a Fund, of the 
Adviser, of any sub-adviser to or promoter of a Fund, or of the 
Distributor will compile, create, sponsor or maintain the Underlying 
Index.\2\
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    \2\ Each Self-Indexing Fund will post on its Web site the 
identities and quantities of the investment positions that will form 
the basis for the Fund's calculation of its NAV at the end of the 
day. Applicants believe that requiring Self-Indexing Funds to 
maintain full portfolio transparency will help address, together 
with other protections, conflicts of interest with respect to such 
Funds.
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    3. Shares will be purchased and redeemed in Creation Units and 
generally on an in-kind basis, or issued in less than Creation Unit 
size to investors participating in a distribution reinvestment program. 
Except where the purchase or redemption will include cash under the 
limited circumstances specified in the application, purchasers will be 
required to purchase Creation Units by depositing specified instruments 
(``Deposit Instruments''), and shareholders redeeming their shares will 
receive specified instruments (``Redemption Instruments''). The Deposit 
Instruments and the Redemption Instruments will each correspond pro 
rata to the positions in the Fund's portfolio (including cash 
positions) except as specified in the application.
    4. Because shares will not be individually redeemable, applicants 
request an exemption from Section 5(a)(1) and Section 2(a)(32) of the 
Act that would permit the Funds to register as open-end management 
investment companies and issue shares that are redeemable in Creation 
Units (other than pursuant to a dividend reinvestment program).
    5. Applicants also request an exemption from section 22(d) of the 
Act and rule 22c-1 under the Act as secondary market trading in shares 
will take place at negotiated prices, not at a current offering price 
described in a Fund's prospectus, and not at a price based on NAV. 
Applicants state that (a) secondary market trading in shares does not 
involve a Fund as a party and will not result in dilution of an 
investment in shares, and (b) to the extent different prices exist 
during a given trading day, or from day to day, such variances occur as 
a result of third-party market forces, such as supply and demand. 
Therefore, applicants assert that secondary market transactions in 
shares will not lead to discrimination or preferential treatment among 
purchasers. Finally, applicants represent that share market prices will 
be disciplined by arbitrage opportunities, which should prevent shares 
from trading at a material discount or premium from NAV.
    6. With respect to Funds that effect creations and redemptions of 
Creation Units in kind and that are based on certain Underlying Indexes 
that include foreign securities, applicants request relief from the 
requirement imposed by section 22(e) in order to allow such Funds to 
pay redemption proceeds within fifteen calendar days following the 
tender of Creation Units for redemption. Applicants assert that the 
requested relief would not be inconsistent with the spirit and intent 
of section 22(e) to prevent unreasonable, undisclosed or unforeseen 
delays in the actual payment of redemption proceeds.
    7. Applicants request an exemption to permit Funds of Funds to 
acquire Fund shares beyond the limits of section 12(d)(1)(A) of the 
Act; and the Funds, and any principal underwriter for the Funds, and/or 
any broker or dealer registered under the Exchange Act, to sell shares 
to Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act. 
The application's terms and conditions are designed to, among other 
things, help prevent any potential (i) undue influence over a Fund 
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) and (B) of the Act.
    8. Applicants request an exemption from sections 17(a)(1) and 
17(a)(2) of the Act to permit persons that are Affiliated Persons, or 
Second Tier-Affiliates, of the Funds, solely by virtue of certain 
ownership interests, to effectuate purchases and redemptions in-kind. 
The deposit procedures for in-kind purchases of Creation Units and the 
redemption procedures for in-kind redemptions of Creation Units will be 
the same for all purchases and redemptions and Deposit Instrument and 
Redemption Instruments will be valued in the same manner as those 
investment positions currently held by the Funds. Applicants also seek 
relief from the prohibitions on affiliated transactions in section 
17(a) to permit a Fund to sell its shares to and redeem its shares from 
a Fund of Funds, and to engage in the accompanying in-kind transactions 
with the Fund of Funds.\3\ The purchase of Creation Units by a Fund of 
Funds directly from a Fund will be accomplished in accordance with the 
policies of the Fund of Funds and will be based on the NAVs of the 
Funds.
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    \3\ The requested relief would apply to direct sales of shares 
in Creation Units by a Fund to a Fund of Funds and redemptions of 
those shares. Applicants, moreover, are not seeking relief from 
section 17(a) for, and the requested relief will not apply to, 
transactions where a Fund could be deemed an Affiliated Person, or a 
Second-Tier Affiliate, of a Fund of Funds because an Adviser or an 
entity controlling, controlled by or under common control with an 
Adviser provides investment advisory services to that Fund of Funds.
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    9. Applicants also request relief to permit a Feeder Fund to 
acquire shares of another registered investment company having 
substantially the same investment objectives as the Feeder Fund 
(``Master Fund'') beyond the limitations in section 12(d)(1)(A) and 
permit the Master Fund, and any principal underwriter for the Master 
Fund, to sell shares of the Master Fund to the Feeder Fund beyond the 
limitations in section 12(d)(1)(B).
    10. 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.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21131 Filed 10-2-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                    46116                        Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Notices

                                                    there are 10 credit rating agencies                     exemption from sections 17(a)(1) and                  hearing on the matter, the reason for the
                                                    registered as NRSROs with the                           17(a)(2) of the Act, and under section                request, and the issues contested.
                                                    Commission. Based on staff experience                   12(d)(1)(J) for an exemption from                     Persons who wish to be notified of a
                                                    and comments received during the 60-                    sections 12(d)(1)(A) and 12(d)(1)(B) of               hearing may request notification by
                                                    day comment period soliciting                           the Act. The requested order would                    writing to the Commission’s Secretary.
                                                    comments on this collection of                          permit (a) index-based series of certain              ADDRESSES: Secretary, Securities and
                                                    information, the Commission estimates                   open-end management investment                        Exchange Commission, 100 F Street NE.,
                                                    that the revised ongoing annual burden                  companies (‘‘Funds’’) to issue shares                 Washington, DC 20549–1090;
                                                    for respondents to comply with Rule                     redeemable in large aggregations                      Applicants: Devin F. Sullivan, Esq.,
                                                    17g–1 and Form NRSRO is 2,750 hours.                    (‘‘Creation Units’’); (b) secondary market            Wells Fargo Funds Management, LLC,
                                                    In addition, the Commission estimates                   transactions in Fund shares to occur at               45 Fremont Street, 26th Floor, San
                                                    an industry-wide annual external cost to                negotiated market prices rather than at               Francisco, CA 94105.
                                                    NRSROs of $4,000 to comply with the                     net asset value (‘‘NAV’’); (c) certain                FOR FURTHER INFORMATION CONTACT:
                                                    requirements.                                           Funds to pay redemption proceeds,                     Laura L. Solomon, Senior Counsel, at
                                                      The Commission may not conduct or                     under certain circumstances, more than                (202) 551–6915, or Daniele Marchesani,
                                                    sponsor a collection of information                     seven days after the tender of shares for             Assistant Chief Counsel at (202) 551–
                                                    unless it displays a currently valid OMB                redemption; (d) certain affiliated                    6821 (Division of Investment
                                                    control number. No person shall be                      persons of a Fund to deposit securities               Management, Chief Counsel’s Office).
                                                    subject to any penalty for failing to                   into, and receive securities from, the
                                                                                                                                                                  SUPPLEMENTARY INFORMATION: The
                                                    comply with a collection of information                 Fund in connection with the purchase
                                                                                                                                                                  following is a summary of the
                                                    subject to the PRA that does not display                and redemption of Creation Units; (e)
                                                                                                                                                                  application. The complete application
                                                    a valid OMB control number.                             certain registered management
                                                                                                            investment companies and unit                         may be obtained via the Commission’s
                                                      Background documentation for this                                                                           Web site by searching for the file
                                                    information collection may be viewed at                 investment trusts outside of the same
                                                                                                            group of investment companies as the                  number, or for an applicant using the
                                                    the following Web site:                                                                                       Company name box, at http://
                                                    www.reginfo.gov. Comments should be                     Funds (‘‘Funds of Funds’’) to acquire
                                                                                                            shares of the Funds; (f) certain Funds                www.sec.gov/search/search.htm or by
                                                    directed to: (i) Desk Officer for the                                                                         calling (202) 551–8090.
                                                    Securities and Exchange Commission,                     (‘‘Feeder Funds’’) to create and redeem
                                                    Office of Information and Regulatory                    Creation Units in-kind in a master-                   Summary of the Application
                                                    Affairs, Office of Management and                       feeder structure; and (g) certain Funds                 1. Applicants request an order that
                                                    Budget, Room 10102, New Executive                       to issue Shares in less than Creation                 would allow Funds to operate as index-
                                                    Office Building, Washington, DC 20503,                  Unit size to investors participating in a             based exchange traded funds (‘‘ETFs’’).1
                                                    or by sending an email to: Shagufta_                    distribution reinvestment program.
                                                                                                                                                                  Fund shares will be purchased and
                                                    Ahmed@omb.eop.gov; and (ii) Pamela                         Applicants: Wells Fargo Exchange-
                                                                                                                                                                  redeemed at their NAV in Creation
                                                    Dyson, Director/Chief Information                       Traded Funds Trust (the ‘‘Trust’’), a
                                                                                                            Delaware statutory trust, which will                  Units (other than pursuant to a
                                                    Officer, Securities and Exchange                                                                              distribution reinvestment program), as
                                                    Commission, c/o Remi Pavlik-Simon,                      register under the Act as an open-end
                                                                                                            management investment company with                    described in the application. All orders
                                                    100 F St NE., Washington, DC 20549 or                                                                         to purchase Creation Units and all
                                                    send an email to: PRA_Mailbox@                          multiple series, Wells Fargo Funds
                                                                                                            Management, LLC (the ‘‘Initial                        redemption requests will be placed by
                                                    sec.gov. Comments must be submitted to                                                                        or through an ‘‘Authorized Participant’’,
                                                    OMB within 30 days of this notice.                      Adviser’’), a Delaware limited liability
                                                                                                            company registered as an investment                   which will have signed a participant
                                                      Dated: September 27, 2017.                            adviser under the Investment Advisers                 agreement with the Distributor. Shares
                                                    Eduardo A. Aleman,                                      Act of 1940, and Wells Fargo Funds                    will be listed and traded individually on
                                                    Assistant Secretary.                                    Distributor, LLC (the ‘‘Initial                       a national securities exchange, where
                                                    [FR Doc. 2017–21193 Filed 10–2–17; 8:45 am]             Distributor’’), a Delaware limited                    share prices will be based on the current
                                                                                                            liability company (together with any                  bid/offer market. Certain Funds may
                                                    BILLING CODE 8011–01–P
                                                                                                            future distributor, the ‘‘Distributor’’).             operate as Feeder Funds in a master-
                                                                                                               Filing Dates: The application was                  feeder structure. Any order granting the
                                                    SECURITIES AND EXCHANGE                                 filed on August 5, 2016, and amended                  requested relief would be subject to the
                                                    COMMISSION                                              on December 2, 2016, April 19, 2017,                  terms and conditions stated in the
                                                                                                            and September 15, 2017.                               application.
                                                    [Investment Company Act Release No.                        Hearing or Notification of Hearing: An               2. Each Fund will hold investment
                                                    32836; 812–14681]                                                                                             positions selected to correspond closely
                                                                                                            order granting the requested relief will
                                                                                                            be issued unless the Commission orders                to the performance of an Underlying
                                                    Wells Fargo Exchange-Traded Funds                                                                             Index. In the case of Self-Indexing
                                                    Trust, et al.                                           a hearing. Interested persons may
                                                                                                            request a hearing by writing to the
                                                                                                                                                                     1 Applicants request that the order apply to the
                                                    September 27, 2017.                                     Commission’s Secretary and serving
                                                                                                                                                                  initial fund and any additional series of the Trust,
                                                    AGENCY: Securities and Exchange                         applicants with a copy of the request,                and any other existing or future open-end
                                                    Commission (‘‘Commission’’).                            personally or by mail. Hearing requests               management investment company or existing or
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                    ACTION: Notice.                                         should be received by the Commission                  future series thereof (each, included in the term
                                                                                                            by 5:30 p.m. on October 23, 2017, and                 ‘‘Fund’’), each of which will operate as an ETF, and
                                                                                                                                                                  their respective existing or future master funds, and
                                                      Notice of an application for an order                 should be accompanied by proof of                     will track a specified index comprised of domestic
                                                    under section 6(c) of the Investment                    service on applicants, in the form of an              and/or foreign equity securities and/or domestic
                                                    Company Act of 1940 (the ‘‘Act’’) for an                affidavit, or for lawyers, a certificate of           and/or foreign fixed income securities (each, an
                                                    exemption from sections 2(a)(32),                       service. Pursuant to rule 0–5 under the               ‘‘Underlying Index’’). Any Fund will (a) be advised
                                                                                                                                                                  by the Initial Adviser or an entity controlling,
                                                    5(a)(1), 22(d), and 22(e) of the Act and                Act, hearing requests should state the                controlled by, or under common control with the
                                                    rule 22c–1 under the Act, under                         nature of the writer’s interest, any facts            Initial Adviser (each, an ‘‘Adviser’’) and (b) comply
                                                    sections 6(c) and 17(b) of the Act for an               bearing upon the desirability of a                    with the terms and conditions of the application.



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                                                                                  Federal Register / Vol. 82, No. 190 / Tuesday, October 3, 2017 / Notices                                                   46117

                                                    Funds, an affiliated person, as defined                 be disciplined by arbitrage                            The purchase of Creation Units by a
                                                    in section 2(a)(3) of the Act (‘‘Affiliated             opportunities, which should prevent                    Fund of Funds directly from a Fund will
                                                    Person’’), or an affiliated person of an                shares from trading at a material                      be accomplished in accordance with the
                                                    Affiliated Person (‘‘Second-Tier                        discount or premium from NAV.                          policies of the Fund of Funds and will
                                                    Affiliate’’), of the Trust or a Fund, of the               6. With respect to Funds that effect                be based on the NAVs of the Funds.
                                                    Adviser, of any sub-adviser to or                       creations and redemptions of Creation
                                                                                                                                                                      9. Applicants also request relief to
                                                    promoter of a Fund, or of the Distributor               Units in kind and that are based on
                                                    will compile, create, sponsor or                        certain Underlying Indexes that include                permit a Feeder Fund to acquire shares
                                                    maintain the Underlying Index.2                         foreign securities, applicants request                 of another registered investment
                                                       3. Shares will be purchased and                      relief from the requirement imposed by                 company having substantially the same
                                                    redeemed in Creation Units and                          section 22(e) in order to allow such                   investment objectives as the Feeder
                                                    generally on an in-kind basis, or issued                Funds to pay redemption proceeds                       Fund (‘‘Master Fund’’) beyond the
                                                    in less than Creation Unit size to                      within fifteen calendar days following                 limitations in section 12(d)(1)(A) and
                                                    investors participating in a distribution               the tender of Creation Units for                       permit the Master Fund, and any
                                                    reinvestment program. Except where the                  redemption. Applicants assert that the                 principal underwriter for the Master
                                                    purchase or redemption will include                     requested relief would not be                          Fund, to sell shares of the Master Fund
                                                    cash under the limited circumstances                    inconsistent with the spirit and intent of             to the Feeder Fund beyond the
                                                    specified in the application, purchasers                section 22(e) to prevent unreasonable,                 limitations in section 12(d)(1)(B).
                                                    will be required to purchase Creation                   undisclosed or unforeseen delays in the                   10. Section 6(c) of the Act permits the
                                                    Units by depositing specified                           actual payment of redemption proceeds.                 Commission to exempt any persons or
                                                    instruments (‘‘Deposit Instruments’’),                     7. Applicants request an exemption to               transactions from any provision of the
                                                    and shareholders redeeming their shares                 permit Funds of Funds to acquire Fund
                                                    will receive specified instruments                                                                             Act if such exemption is necessary or
                                                                                                            shares beyond the limits of section
                                                    (‘‘Redemption Instruments’’). The                                                                              appropriate in the public interest and
                                                                                                            12(d)(1)(A) of the Act; and the Funds,
                                                    Deposit Instruments and the                                                                                    consistent with the protection of
                                                                                                            and any principal underwriter for the
                                                    Redemption Instruments will each                        Funds, and/or any broker or dealer                     investors and the purposes fairly
                                                    correspond pro rata to the positions in                 registered under the Exchange Act, to                  intended by the policy and provisions of
                                                    the Fund’s portfolio (including cash                    sell shares to Funds of Funds beyond                   the Act. Section 12(d)(1)(J) of the Act
                                                    positions) except as specified in the                   the limits of section 12(d)(1)(B) of the               provides that the Commission may
                                                    application.                                            Act. The application’s terms and                       exempt any person, security, or
                                                       4. Because shares will not be                        conditions are designed to, among other                transaction, or any class or classes of
                                                    individually redeemable, applicants                     things, help prevent any potential (i)                 persons, securities, or transactions, from
                                                    request an exemption from Section                       undue influence over a Fund through                    any provision of section 12(d)(1) if the
                                                    5(a)(1) and Section 2(a)(32) of the Act                 control or voting power, or in                         exemption is consistent with the public
                                                    that would permit the Funds to register                 connection with certain services,                      interest and the protection of investors.
                                                    as open-end management investment                       transactions, and underwritings, (ii)                  Section 17(b) of the Act authorizes the
                                                    companies and issue shares that are                     excessive layering of fees, and (iii)                  Commission to grant an order
                                                    redeemable in Creation Units (other                     overly complex fund structures, which                  permitting a transaction otherwise
                                                    than pursuant to a dividend                             are the concerns underlying the limits                 prohibited by section 17(a) if it finds
                                                    reinvestment program).                                  in sections 12(d)(1)(A) and (B) of the                 that (a) the terms of the proposed
                                                       5. Applicants also request an                        Act.                                                   transaction are fair and reasonable and
                                                    exemption from section 22(d) of the Act                    8. Applicants request an exemption                  do not involve overreaching on the part
                                                    and rule 22c–1 under the Act as                         from sections 17(a)(1) and 17(a)(2) of the             of any person concerned; (b) the
                                                    secondary market trading in shares will                 Act to permit persons that are Affiliated
                                                    take place at negotiated prices, not at a                                                                      proposed transaction is consistent with
                                                                                                            Persons, or Second Tier-Affiliates, of the             the policies of each registered
                                                    current offering price described in a                   Funds, solely by virtue of certain
                                                    Fund’s prospectus, and not at a price                                                                          investment company involved; and (c)
                                                                                                            ownership interests, to effectuate                     the proposed transaction is consistent
                                                    based on NAV. Applicants state that (a)                 purchases and redemptions in-kind. The
                                                    secondary market trading in shares does                                                                        with the general purposes of the Act.
                                                                                                            deposit procedures for in-kind
                                                    not involve a Fund as a party and will                  purchases of Creation Units and the                      For the Commission, by the Division of
                                                    not result in dilution of an investment                 redemption procedures for in-kind                      Investment Management, under delegated
                                                    in shares, and (b) to the extent different              redemptions of Creation Units will be                  authority.
                                                    prices exist during a given trading day,                the same for all purchases and                         Eduardo A. Aleman,
                                                    or from day to day, such variances occur                redemptions and Deposit Instrument                     Assistant Secretary.
                                                    as a result of third-party market forces,               and Redemption Instruments will be                     [FR Doc. 2017–21131 Filed 10–2–17; 8:45 am]
                                                    such as supply and demand. Therefore,                   valued in the same manner as those                     BILLING CODE 8011–01–P
                                                    applicants assert that secondary market                 investment positions currently held by
                                                    transactions in shares will not lead to                 the Funds. Applicants also seek relief
                                                    discrimination or preferential treatment                from the prohibitions on affiliated
                                                    among purchasers. Finally, applicants                   transactions in section 17(a) to permit a
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                    represent that share market prices will                 Fund to sell its shares to and redeem its
                                                                                                            shares from a Fund of Funds, and to
                                                       2 Each Self-Indexing Fund will post on its Web
                                                                                                            engage in the accompanying in-kind                     for, and the requested relief will not apply to,
                                                    site the identities and quantities of the investment
                                                    positions that will form the basis for the Fund’s       transactions with the Fund of Funds.3                  transactions where a Fund could be deemed an
                                                    calculation of its NAV at the end of the day.                                                                  Affiliated Person, or a Second-Tier Affiliate, of a
                                                    Applicants believe that requiring Self-Indexing           3 The requested relief would apply to direct sales   Fund of Funds because an Adviser or an entity
                                                    Funds to maintain full portfolio transparency will      of shares in Creation Units by a Fund to a Fund of     controlling, controlled by or under common control
                                                    help address, together with other protections,          Funds and redemptions of those shares. Applicants,     with an Adviser provides investment advisory
                                                    conflicts of interest with respect to such Funds.       moreover, are not seeking relief from section 17(a)    services to that Fund of Funds.



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Document Created: 2017-10-03 01:01:46
Document Modified: 2017-10-03 01:01:46
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 5, 2016, and amended on December 2, 2016, April 19, 2017, and September 15, 2017.
ContactLaura L. Solomon, Senior Counsel, at (202) 551-6915, or Daniele Marchesani, Assistant Chief Counsel at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation82 FR 46116 

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