82_FR_56115 82 FR 55890 - Motley Fool Asset Management, LLC, et al.; Notice of Application

82 FR 55890 - Motley Fool Asset Management, LLC, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 225 (November 24, 2017)

Page Range55890-55891
FR Document2017-25359

Federal Register, Volume 82 Issue 225 (Friday, November 24, 2017)
[Federal Register Volume 82, Number 225 (Friday, November 24, 2017)]
[Notices]
[Pages 55890-55891]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-25359]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32899; 812-14804]


Motley Fool Asset Management, LLC, et al.; Notice of Application

November 17, 2017
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: 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 only 
(``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; and (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.

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APPLICANTS: Motley Fool Asset Management, LLC (the ``Initial 
Adviser''), a Delaware limited liability company registered as an 
investment adviser under the Investment Advisers Act of 1940; The RBB 
Fund, Inc. (the ``Company''), a Maryland corporation registered under 
the Act as an open-end management investment company with multiple 
series; and Quasar Distributors, LLC (the ``Distributor''), a Delaware 
limited liability company and broker-dealer registered under the 
Securities Exchange Act of 1934 (``Exchange Act'').

DATES: The application was filed on July 21, 2017, and amended on 
October 20, 2017, and November 14, 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 December 12, 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: The Initial Adviser, 2000 
Duke Street, Suite 175, Alexandria, Virginia 22134; the Company, 615 
East Michigan Street, 4th Floor, Milwaukee, Wisconsin 53202; the 
Distributor, 777 East Wisconsin Avenue, 6th Floor, Milwaukee, Wisconsin 
53202.

FOR FURTHER INFORMATION CONTACT: Nick Cordell, Senior Counsel, at (202) 
551-5496; or Holly Hunter-Ceci, Assistant Chief Counsel, 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 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 exchange traded funds (``ETFs'').\1\ Fund shares will be 
purchased and redeemed at their NAV in Creation Units only. 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. 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 existing 
series of the Company that are index ETFs and any additional series 
of the Company, and any other open-end management investment company 
or series thereof, that may be created in the future (each, included 
in the term ``Fund''), each of which will operate as an ETF and will 
track a specified index comprised of domestic or foreign equity and/
or 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 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 Company or a 
Fund, of an 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. Except where the purchase or redemption 
will include cash under the limited

[[Page 55891]]

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 only.
    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 Instruments 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. 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. 2017-25359 Filed 11-22-17; 8:45 am]
BILLING CODE 8011-01-P



                                                55890                         Federal Register / Vol. 82, No. 225 / Friday, November 24, 2017 / Notices

                                                Commission, and all written                               net asset value (‘‘NAV’’); (c) certain                Chief Counsel, at (202) 551–6825
                                                communications relating to the                            Funds to pay redemption proceeds,                     (Division of Investment Management,
                                                proposed rule change between the                          under certain circumstances, more than                Chief Counsel’s Office).
                                                Commission and any person, other than                     seven days after the tender of shares for             SUPPLEMENTARY INFORMATION: The
                                                those that may be withheld from the                       redemption; (d) certain affiliated                    following is a summary of the
                                                public in accordance with the                             persons of a Fund to deposit securities               application. The complete application
                                                provisions of 5 U.S.C. 552, will be                       into, and receive securities from, the                may be obtained via the Commission’s
                                                available for Web site viewing and                        Fund in connection with the purchase                  Web site by searching for the file
                                                printing in the Commission’s Public                       and redemption of Creation Units; and                 number, or for an applicant using the
                                                Reference Room, on official business                      (e) certain registered management                     Company name box, at http://
                                                days between the hours of 10:00 a.m.                      investment companies and unit                         www.sec.gov/search/search.htm or by
                                                and 3:00 p.m., located at 100 F Street                    investment trusts outside of the same                 calling (202) 551–8090.
                                                NE., Washington, DC 20549. Copies of                      group of investment companies as the
                                                                                                          Funds (‘‘Funds of Funds’’) to acquire                 Summary of the Application
                                                such filing also will be available for
                                                inspection and copying at the principal                   shares of the Funds.                                     1. Applicants request an order that
                                                office of the Exchange. All comments                                                                            would allow Funds to operate as index
                                                received will be posted without change.                   APPLICANTS:   Motley Fool Asset                       exchange traded funds (‘‘ETFs’’).1 Fund
                                                Persons submitting comments are                           Management, LLC (the ‘‘Initial                        shares will be purchased and redeemed
                                                cautioned that we do not redact or edit                   Adviser’’), a Delaware limited liability              at their NAV in Creation Units only. All
                                                personal identifying information from                     company registered as an investment                   orders to purchase Creation Units and
                                                comment submissions. You should                           adviser under the Investment Advisers                 all redemption requests will be placed
                                                submit only information that you wish                     Act of 1940; The RBB Fund, Inc. (the                  by or through an ‘‘Authorized
                                                to make available publicly. All                           ‘‘Company’’), a Maryland corporation                  Participant’’, which will have signed a
                                                submissions should refer to File                          registered under the Act as an open-end               participant agreement with the
                                                Number SR–BOX–2017–34 and should                          management investment company with                    Distributor. Shares will be listed and
                                                be submitted on or before December 15,                    multiple series; and Quasar Distributors,             traded individually on a national
                                                2017.                                                     LLC (the ‘‘Distributor’’), a Delaware                 securities exchange, where share prices
                                                                                                          limited liability company and broker-                 will be based on the current bid/offer
                                                  For the Commission, by the Division of                                                                        market. Any order granting the
                                                                                                          dealer registered under the Securities
                                                Trading and Markets, pursuant to delegated
                                                authority.13                                              Exchange Act of 1934 (‘‘Exchange Act’’).              requested relief would be subject to the
                                                                                                          DATES: The application was filed on July              terms and conditions stated in the
                                                Eduardo A. Aleman,
                                                                                                          21, 2017, and amended on October 20,                  application.
                                                Assistant Secretary.                                                                                               2. Each Fund will hold investment
                                                                                                          2017, and November 14, 2017.
                                                [FR Doc. 2017–25345 Filed 11–22–17; 8:45 am]                                                                    positions selected to correspond closely
                                                                                                          HEARING OR NOTIFICATION OF HEARING: An
                                                BILLING CODE 8011–01–P
                                                                                                          order granting the requested relief will              to the performance of an underlying
                                                                                                          be issued unless the Commission orders                index. In the case of self-indexing
                                                                                                          a hearing. Interested persons may                     Funds, an affiliated person, as defined
                                                SECURITIES AND EXCHANGE                                                                                         in section 2(a)(3) of the Act (‘‘Affiliated
                                                COMMISSION                                                request a hearing by writing to the
                                                                                                          Commission’s Secretary and serving                    Person’’), or an affiliated person of an
                                                [Investment Company Act Release No.                                                                             Affiliated Person (‘‘Second-Tier
                                                                                                          applicants with a copy of the request,
                                                32899; 812–14804]                                                                                               Affiliate’’), of the Company or a Fund,
                                                                                                          personally or by mail. Hearing requests
                                                                                                                                                                of an Adviser, of any sub-adviser to or
                                                                                                          should be received by the Commission
                                                Motley Fool Asset Management, LLC,                                                                              promoter of a Fund, or of the Distributor
                                                                                                          by 5:30 p.m. on December 12, 2017, and
                                                et al.; Notice of Application                                                                                   will compile, create, sponsor, or
                                                                                                          should be accompanied by proof of
                                                                                                                                                                maintain the underlying index.2
                                                November 17, 2017                                         service on applicants, in the form of an                 3. Shares will be purchased and
                                                AGENCY:    Securities and Exchange                        affidavit, or for lawyers, a certificate of           redeemed in Creation Units and
                                                Commission (‘‘Commission’’).                              service. Pursuant to rule 0–5 under the               generally on an in-kind basis. Except
                                                ACTION: Notice of an application for an                   Act, hearing requests should state the                where the purchase or redemption will
                                                order under section 6(c) of the                           nature of the writer’s interest, any facts            include cash under the limited
                                                Investment Company Act of 1940 (the                       bearing upon the desirability of a
                                                ‘‘Act’’) for an exemption from sections                   hearing on the matter, the reason for the                1 Applicants request that the order apply to the

                                                2(a)(32), 5(a)(1), 22(d), and 22(e) of the                request, and the issues contested.                    existing series of the Company that are index ETFs
                                                Act and rule 22c–1 under the Act, under                   Persons who wish to be notified of a                  and any additional series of the Company, and any
                                                                                                          hearing may request notification by                   other open-end management investment company
                                                sections 6(c) and 17(b) of the Act for an                                                                       or series thereof, that may be created in the future
                                                exemption from sections 17(a)(1) and                      writing to the Commission’s Secretary.                (each, included in the term ‘‘Fund’’), each of which
                                                17(a)(2) of the Act, and under section                    ADDRESSES: Secretary, Securities and                  will operate as an ETF and will track a specified
                                                                                                          Exchange Commission, 100 F Street NE.,                index comprised of domestic or foreign equity and/
                                                12(d)(1)(J) for an exemption from                                                                               or fixed income securities (each, an ‘‘Underlying
                                                sections 12(d)(1)(A) and 12(d)(1)(B) of                   Washington, DC 20549–1090;                            Index’’). Any Fund will (a) be advised by the Initial
                                                the Act. The requested order would                        Applicants: The Initial Adviser, 2000                 Adviser or an entity controlling, controlled by, or
                                                permit (a) index-based series of certain                  Duke Street, Suite 175, Alexandria,                   under common control with the Initial Adviser
                                                                                                          Virginia 22134; the Company, 615 East                 (each, an ‘‘Adviser’’) and (b) comply with the terms
sradovich on DSK3GMQ082PROD with NOTICES




                                                open-end management investment                                                                                  and conditions of the application.
                                                companies (‘‘Funds’’) to issue shares                     Michigan Street, 4th Floor, Milwaukee,                   2 Each Self-Indexing Fund will post on its Web
                                                redeemable in large aggregations only                     Wisconsin 53202; the Distributor, 777                 site the identities and quantities of the investment
                                                (‘‘Creation Units’’); (b) secondary market                East Wisconsin Avenue, 6th Floor,                     positions that will form the basis for the Fund’s
                                                transactions in Fund shares to occur at                   Milwaukee, Wisconsin 53202.                           calculation of its NAV at the end of the day.
                                                                                                                                                                Applicants believe that requiring Self-Indexing
                                                negotiated market prices rather than at                   FOR FURTHER INFORMATION CONTACT: Nick
                                                                                                                                                                Funds to maintain full portfolio transparency will
                                                                                                          Cordell, Senior Counsel, at (202) 551–                help address, together with other protections,
                                                  13 17   CFR 200.30–3(a)(12).                            5496; or Holly Hunter-Ceci, Assistant                 conflicts of interest with respect to such Funds.



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                                                                            Federal Register / Vol. 82, No. 225 / Friday, November 24, 2017 / Notices                                                    55891

                                                circumstances specified in the                          registered under the Exchange Act, to                   Section 17(b) of the Act authorizes the
                                                application, purchasers will be required                sell shares to Funds of Funds beyond                    Commission to grant an order
                                                to purchase Creation Units by                           the limits of section 12(d)(1)(B) of the                permitting a transaction otherwise
                                                depositing specified instruments                        Act. The application’s terms and                        prohibited by section 17(a) if it finds
                                                (‘‘Deposit Instruments’’), and                          conditions are designed to, among other                 that (a) the terms of the proposed
                                                shareholders redeeming their shares                     things, help prevent any potential (i)                  transaction are fair and reasonable and
                                                will receive specified instruments                      undue influence over a Fund through                     do not involve overreaching on the part
                                                (‘‘Redemption Instruments’’). The                       control or voting power, or in                          of any person concerned; (b) the
                                                Deposit Instruments and the                             connection with certain services,                       proposed transaction is consistent with
                                                Redemption Instruments will each                        transactions, and underwritings, (ii)                   the policies of each registered
                                                correspond pro rata to the positions in                 excessive layering of fees, and (iii)                   investment company involved; and (c)
                                                the Fund’s portfolio (including cash                    overly complex fund structures, which                   the proposed transaction is consistent
                                                positions) except as specified in the                   are the concerns underlying the limits                  with the general purposes of the Act.
                                                application.                                            in sections 12(d)(1)(A) and (B) of the                    For the Commission, by the Division of
                                                   4. Because shares will not be                        Act.                                                    Investment Management, under delegated
                                                individually redeemable, applicants                        8. Applicants request an exemption                   authority.
                                                request an exemption from section                       from sections 17(a)(1) and 17(a)(2) of the              Eduardo A. Aleman,
                                                5(a)(1) and section 2(a)(32) of the Act                 Act to permit persons that are Affiliated               Assistant Secretary.
                                                that would permit the Funds to register                 Persons, or Second-Tier Affiliates, of the
                                                                                                                                                                [FR Doc. 2017–25359 Filed 11–22–17; 8:45 am]
                                                as open-end management investment                       Funds, solely by virtue of certain
                                                                                                                                                                BILLING CODE 8011–01–P
                                                companies and issue shares that are                     ownership interests, to effectuate
                                                redeemable in Creation Units only.                      purchases and redemptions in-kind. The
                                                   5. Applicants also request an                        deposit procedures for in-kind                          SECURITIES AND EXCHANGE
                                                exemption from section 22(d) of the Act                 purchases of Creation Units and the                     COMMISSION
                                                and rule 22c–1 under the Act as                         redemption procedures for in-kind
                                                secondary market trading in shares will                 redemptions of Creation Units will be                   [Release No. 34–82115; File No. SR–
                                                take place at negotiated prices, not at a               the same for all purchases and                          BatsBZX–2017–58]
                                                current offering price described in a                   redemptions and Deposit Instruments
                                                Fund’s prospectus, and not at a price                   and Redemption Instruments will be                      Self-Regulatory Organizations; Bats
                                                based on NAV. Applicants state that (a)                 valued in the same manner as those                      BZX Exchange, Inc.; Notice of
                                                secondary market trading in shares does                 investment positions currently held by                  Designation of a Longer Period for
                                                not involve a Fund as a party and will                  the Funds. Applicants also seek relief                  Commission Action on a Proposed
                                                not result in dilution of an investment                 from the prohibitions on affiliated                     Rule Change To List and Trade Shares
                                                in shares, and (b) to the extent different              transactions in section 17(a) to permit a               of the CBOE S&P 500® Dividend
                                                prices exist during a given trading day,                Fund to sell its shares to and redeem its               Aristocrats® Target Income Index ETF
                                                or from day to day, such variances occur                shares from a Fund of Funds, and to                     Under the ETF Series Solutions Trust,
                                                as a result of third-party market forces,               engage in the accompanying in-kind                      Under Exchange Rule 14.11(c)(3),
                                                such as supply and demand. Therefore,                   transactions with the Fund of Funds.3                   Index Fund Shares
                                                applicants assert that secondary market                 The purchase of Creation Units by a                     November 17, 2017.
                                                transactions in shares will not lead to                 Fund of Funds directly from a Fund will                   On September 19, 2017, Bats BZX
                                                discrimination or preferential treatment                be accomplished in accordance with the                  Exchange, Inc. (‘‘Exchange’’) filed with
                                                among purchasers. Finally, applicants                   policies of the Fund of Funds and will                  the Securities and Exchange
                                                represent that share market prices will                 be based on the NAVs of the Funds.                      Commission (‘‘Commission’’), pursuant
                                                be disciplined by arbitrage                                9. Section 6(c) of the Act permits the               to Section 19(b)(1) of the Securities
                                                opportunities, which should prevent                     Commission to exempt any persons or                     Exchange Act of 1934 (‘‘Act’’) 1 and Rule
                                                shares from trading at a material                       transactions from any provision of the                  19b–4 thereunder,2 a proposed rule
                                                discount or premium from NAV.                           Act if such exemption is necessary or                   change to list and trade Shares of the
                                                   6. With respect to Funds that effect                 appropriate in the public interest and                  CBOE S&P 500® Dividend Aristocrats®
                                                creations and redemptions of Creation                   consistent with the protection of
                                                                                                                                                                Target Income Index ETF under
                                                Units in kind and that are based on                     investors and the purposes fairly
                                                                                                                                                                Exchange Rule 14.11(c)(3). The
                                                certain Underlying Indexes that include                 intended by the policy and provisions of
                                                foreign securities, applicants request                                                                          proposed rule change was published for
                                                                                                        the Act. Section 12(d)(1)(J) of the Act
                                                relief from the requirement imposed by                                                                          comment in the Federal Register on
                                                                                                        provides that the Commission may
                                                section 22(e) in order to allow such                                                                            October 11, 2017.3 The Commission
                                                                                                        exempt any person, security, or
                                                Funds to pay redemption proceeds                                                                                received no comments on the proposed
                                                                                                        transaction, or any class or classes of
                                                within fifteen calendar days following                                                                          rule change.
                                                                                                        persons, securities, or transactions, from                Section 19(b)(2) of the Act 4 provides
                                                the tender of Creation Units for                        any provision of section 12(d)(1) if the
                                                                                                                                                                that, within 45 days of the publication
                                                redemption. Applicants assert that the                  exemption is consistent with the public
                                                                                                                                                                of notice of the filing of a proposed rule
                                                requested relief would not be                           interest and the protection of investors.
                                                                                                                                                                change, or within such longer period up
                                                inconsistent with the spirit and intent of
                                                                                                                                                                to 90 days as the Commission may
                                                section 22(e) to prevent unreasonable,                     3 The requested relief would apply to direct sales

                                                                                                        of shares in Creation Units by a Fund to a Fund of      designate if it finds such longer period
sradovich on DSK3GMQ082PROD with NOTICES




                                                undisclosed or unforeseen delays in the
                                                                                                        Funds and redemptions of those shares. Applicants,      to be appropriate and publishes its
                                                actual payment of redemption proceeds.                  moreover, are not seeking relief from section 17(a)
                                                   7. Applicants request an exemption to                                                                        reasons for so finding or as to which the
                                                                                                        for, and the requested relief will not apply to,
                                                permit Funds of Funds to acquire Fund                   transactions where a Fund could be deemed an              1 15
                                                                                                        Affiliated Person, or a Second-Tier Affiliate, of a            U.S.C. 78s(b)(1).
                                                shares beyond the limits of section                                                                               2 17 CFR 240.19b–4.
                                                                                                        Fund of Funds because an Adviser or an entity
                                                12(d)(1)(A) of the Act; and the Funds,                  controlling, controlled by or under common control        3 See Securities Exchange Act Release No. 81815
                                                and any principal underwriter for the                   with an Adviser provides investment advisory            (October 4, 2017), 82 FR 47265.
                                                Funds, and/or any broker or dealer                      services to that Fund of Funds.                           4 15 U.S.C. 78s(b)(2).




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Document Created: 2017-11-22 23:34:15
Document Modified: 2017-11-22 23:34:15
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 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 only (``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; and (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.
DatesThe application was filed on July 21, 2017, and amended on October 20, 2017, and November 14, 2017.
ContactNick Cordell, Senior Counsel, at (202) 551-5496; or Holly Hunter-Ceci, Assistant Chief Counsel, at (202) 551- 6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation82 FR 55890 

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