82 FR 61353 - The Hartford Mutual Funds, Inc., et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 247 (December 27, 2017)

Page Range		61353-61354
FR Document		2017-27807
Federal Register, Volume 82 Issue 247 (Wednesday, December 27, 2017)
[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Notices]
[Pages 61353-61354]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27807]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32944; 812-14564]


The Hartford Mutual Funds, Inc., et al.

December 20, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application under Section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from Section 15(a) of 
the Act and Rule 18f-2 under the Act, as well as from certain 
disclosure requirements in Rule 20a-1 under the Act, Item 19(a)(3) of 
Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 
Schedule 14A under the Securities Exchange Act of 1934, and Sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements''). 
The requested exemption would permit an investment adviser to hire and 
replace certain sub-advisers without shareholder approval and grant 
relief from the Disclosure Requirements as they relate to fees paid to 
the sub-advisers. The order would supersede a prior order.\1\
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    \1\ In the Matter of Fortis Series Fund, Inc. and Fortis 
Advisers, Inc., Investment Company Act Release Nos. 24158 (November 
23, 1999) (notice) and 24211 (December 21, 1999) (order) (the 
``Prior Order''). If the requested order is granted, Sub-Advised 
Series currently relying on the Prior Order may continue to do so, 
other than with respect to Wholly-Owned Subadvisers. Shareholder 
approval shall be required before such Series can rely on the relief 
requested with respect to Wholly-Owned Subadvisers.

Applicants: The Hartford Mutual Funds, Inc.; The Hartford Mutual Funds 
II, Inc.; Hartford Series Fund, Inc.; Hartford HLS Series Fund II, 
Inc.; Hartford Funds Exchange-Traded Trust; Hartford Funds NextShares 
Trust; and Hartford Funds Master Trust (collectively, the ``Hartford 
Companies''), each either a Maryland corporation or a Delaware 
statutory trust registered under the Act as an open-end management 
investment company with multiple series, and each of HIMCO Variable 
Insurance Trust (``HVI Trust'') and Lattice Strategies Trust (``LS 
Trust''), each a Delaware statutory trust and each also registered 
under the Act as an open-end management investment company with 
multiple series (together, the ``Trusts'' and collectively with the 
Hartford Companies, the ``Companies''); Hartford Funds Management 
Company, LLC (``HFMC''), a Delaware limited liability company; Hartford 
Investment Management Company (``HIMCO''), a Delaware corporation; and 
Lattice Strategies LLC (``Lattice''), a Delaware limited liability 
company, each registered as an investment adviser under the Investment 
Advisers Act of 1940 (each, an ``Adviser'' and together with the 
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Companies, the ``Applicants'').

Filing Dates: The application was filed October 13, 2015, and amended 
on March 21, 2016, September 30, 2016, February 10, 2017, and November 
14, 2017.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on January 15, 2018, and should be accompanied by proof of service 
on the applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to Rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE, Washington, DC 20549-1090. Applicants: Walter F. Garger, 
Hartford Funds Management Company, LLC and Lattice Strategies LLC, 690 
Lee Road, Wayne, PA 19087; and Brenda J. Page, Hartford Investment 
Management Company, One Hartford Plaza, Hartford, CT 06155.

FOR FURTHER INFORMATION CONTACT: Stephan N. Packs, Senior Counsel, at 
(202) 551-6853, or David J. Marcinkus, Branch Chief, at (202) 551-6825 
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number of 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. HFMC will serve as the investment adviser to the Hartford 
Companies, HIMCO will serve as the investment adviser to the HVI Trust, 
and Lattice will serve as the investment adviser to the LS Trust, 
pursuant to an investment advisory agreement with, respectively, the 
Hartford Companies, the HVI Trust,

[[Page 61354]]

and the LS Trust (the ``Advisory Agreement'').\2\ The Adviser will 
provide the Funds with continuous and comprehensive investment 
management services subject to the supervision of, and policies 
established by, each Fund's board of directors or trustees, as 
applicable (``Board''). The Advisory Agreement permits the Adviser, 
subject to the approval of the Board, to delegate to one or more sub-
advisers (each, a ``Sub-Adviser'' and collectively, the ``Sub-
Advisers'') the responsibility to provide the day-to-day portfolio 
investment management of each Fund, subject to the supervision and 
direction of the Adviser. The primary responsibility for managing the 
Funds will remain vested in the Adviser. The Adviser will hire, 
evaluate, allocate assets to and oversee the Sub-Advisers, including 
determining whether a Sub-Adviser should be terminated, at all times 
subject to the authority of the Board.
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    \2\ Applicants request relief with respect to the named 
Applicants, any existing or future Series of the Companies, and any 
Sub-Advised Series. For purposes of the requested order, 
``successor'' is limited to an entity that results from 
reorganization into another jurisdiction or a change in the type of 
business organization.
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    2. Applicants request an exemption to permit the Adviser, subject 
to Board approval, to hire certain Sub-Advisers pursuant to Sub-
Advisory Agreements and materially amend existing Sub-Advisory 
Agreements without obtaining the shareholder approval required under 
Section 15(a) of the Act and Rule 18f-2 under the Act.\3\ Applicants 
also seek an exemption from the Disclosure Requirements to permit a 
Fund to disclose (as both a dollar amount and a percentage of the 
Fund's net assets): (a) The aggregate fees paid to the Adviser and any 
Wholly-Owned Sub-Advisers; and (b) the aggregate fees paid to Non-
Affiliated Sub-Advisers (collectively, ``Aggregate Fee Disclosure''). 
For any Fund that employs an Affiliated Sub-Adviser, the Fund will 
provide separate disclosure of any fees paid to the Affiliated Sub-
Adviser.
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    \3\ The requested relief will not extend to any Sub-Adviser, 
other than a Wholly-Owned Sub-Adviser, that is an affiliated person, 
as defined in Section 2(a)(3) of the Act, of a Fund or an Adviser, 
other than by reason of serving as a sub-adviser to one or more of 
the Funds (``Affiliated Sub-Adviser''). Each future Series shall 
obtain shareholder approval (including formal approval of the 
initial shareholder(s)) of the Manager of Managers Structure 
(including with respect to Wholly-Owned Subadvisers), prior to 
relying on the requested relief.
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    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the Application. 
Such terms and conditions provide for, among other safeguards, 
appropriate disclosure to Fund shareholders and notification about sub-
advisory changes and enhanced Board oversight to protect the interests 
of the Funds' shareholders.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provisions of the Act, or 
any rule thereunder, if such relief is necessary or appropriate in the 
public interest and consistent with the protection of investors and 
purposes fairly intended by the policy and provisions of the Act. 
Applicants believe that the requested relief meets this standard 
because, as further explained in the Application, the Advisory 
Agreements will remain subject to shareholder approval, while the role 
of the Sub-Advisers is substantially similar to that of individual 
portfolio managers, so that requiring shareholder approval of Sub-
Advisory Agreements would impose unnecessary delays and expenses on the 
Funds. Applicants believe that the requested relief from the Disclosure 
Requirements meets this standard because it will improve the Adviser's 
ability to negotiate fees paid to the Sub-Advisers that are more 
advantageous for the Funds.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27807 Filed 12-26-17; 8:45 am]
 BILLING CODE 8011-01-P
61354 Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Notices

and the LS Trust (the ‘‘Advisory safeguards, appropriate disclosure to (‘‘OCC’’) filed with the Securities and
Agreement’’).2 The Adviser will provide Fund shareholders and notification Exchange Commission (‘‘Commission’’)
the Funds with continuous and about sub-advisory changes and an advance notice as described in Items
comprehensive investment management enhanced Board oversight to protect the I and II below, which Items have been
services subject to the supervision of, interests of the Funds’ shareholders. prepared by OCC. The Commission is
and policies established by, each Fund’s 4. Section 6(c) of the Act provides that publishing this notice to solicit
board of directors or trustees, as the Commission may exempt any comments on the advance notice from
applicable (‘‘Board’’). The Advisory person, security, or transaction or any interested persons.
Agreement permits the Adviser, subject class or classes of persons, securities, or
to the approval of the Board, to delegate transactions from any provisions of the I. Clearing Agency’s Statement of the
to one or more sub-advisers (each, a Act, or any rule thereunder, if such Terms of Substance of the Advance
‘‘Sub-Adviser’’ and collectively, the relief is necessary or appropriate in the Notice
‘‘Sub-Advisers’’) the responsibility to public interest and consistent with the This advance notice is filed in
provide the day-to-day portfolio protection of investors and purposes connection with proposed changes to
investment management of each Fund, fairly intended by the policy and OCC’s margin methodology to move
subject to the supervision and direction provisions of the Act. Applicants away from the existing monthly data
of the Adviser. The primary believe that the requested relief meets source provided by its current vendor
responsibility for managing the Funds this standard because, as further and towards obtaining and
will remain vested in the Adviser. The explained in the Application, the incorporating daily price and returns
Adviser will hire, evaluate, allocate Advisory Agreements will remain (adjusted for any corporate actions) data
assets to and oversee the Sub-Advisers, subject to shareholder approval, while of securities to estimate accurate
including determining whether a Sub- the role of the Sub-Advisers is margins.3 This would be further
Adviser should be terminated, at all substantially similar to that of supported by enhancing OCC’s
times subject to the authority of the individual portfolio managers, so that econometric model applied to different
Board. requiring shareholder approval of Sub-
risk factors; 4 improving the sensitivity
2. Applicants request an exemption to Advisory Agreements would impose
and stability of correlation estimates
permit the Adviser, subject to Board unnecessary delays and expenses on the
between them; and enhancing OCC’s
approval, to hire certain Sub-Advisers Funds. Applicants believe that the
methodology around the treatment of
pursuant to Sub-Advisory Agreements requested relief from the Disclosure
securities with limited historical data.
and materially amend existing Sub- Requirements meets this standard
OCC also proposes to make a few
Advisory Agreements without obtaining because it will improve the Adviser’s
clarifying and clean-up changes to its
the shareholder approval required under ability to negotiate fees paid to the Sub-
margin methodology unrelated to the
Section 15(a) of the Act and Rule 18f– Advisers that are more advantageous for
proposed changes described above.
2 under the Act.3 Applicants also seek the Funds.
The proposed changes to OCC’s
an exemption from the Disclosure For the Commission, by the Division of
Margins Methodology document are
Requirements to permit a Fund to Investment Management, under delegated
authority. contained in confidential Exhibit 5 of
disclose (as both a dollar amount and a
Eduardo A. Aleman, the filing. The proposed changes are
percentage of the Fund’s net assets): (a)
described in detail in Item III below.
The aggregate fees paid to the Adviser Assistant Secretary.
The proposed changes do not require
and any Wholly-Owned Sub-Advisers; [FR Doc. 2017–27807 Filed 12–26–17; 8:45 am]
any changes to the text of OCC’s By-
and (b) the aggregate fees paid to Non- BILLING CODE 8011–01–P
Laws or Rules. All terms with initial
Affiliated Sub-Advisers (collectively,
capitalization that are not otherwise
‘‘Aggregate Fee Disclosure’’). For any
SECURITIES AND EXCHANGE defined herein have the same meaning
Fund that employs an Affiliated Sub-
COMMISSION as set forth in the OCC By-Laws and
Adviser, the Fund will provide separate
Rules.5
disclosure of any fees paid to the [Release No. 34–82371; File No. SR–OCC–
Affiliated Sub-Adviser. 2017–811] II. Clearing Agency’s Statement of the
3. Applicants agree that any order Purpose of, and Statutory Basis for, the
granting the requested relief will be Self-Regulatory Organizations; The Advance Notice
subject to the terms and conditions Options Clearing Corporation; Notice
stated in the Application. Such terms of Filing of Advance Notice In its filing with the Commission,
and conditions provide for, among other Concerning Proposed Changes to The OCC included statements concerning
Options Clearing Corporation’s Margin the purpose of and basis for the advance
2 Applicants request relief with respect to the
Methodology notice and discussed any comments it
named Applicants, any existing or future Series of received on the advance notice. The text
the Companies, and any Sub-Advised Series. For December 20, 2017. of these statements may be examined at
purposes of the requested order, ‘‘successor’’ is Pursuant to Section 806(e)(1) of Title
limited to an entity that results from reorganization
the places specified in Item IV below.
into another jurisdiction or a change in the type of VIII of the Dodd-Frank Wall Street OCC has prepared summaries, set forth
business organization. Reform and Consumer Protection Act, in sections A and B below, of the most
3 The requested relief will not extend to any Sub- entitled Payment, Clearing and significant aspects of these statements.
Adviser, other than a Wholly-Owned Sub-Adviser, Settlement Supervision Act of 2010
that is an affiliated person, as defined in Section
(‘‘Clearing Supervision Act’’) 1 and Rule
daltland on DSKBBV9HB2PROD with NOTICES

3 OCC also has filed a proposed rule change with
2(a)(3) of the Act, of a Fund or an Adviser, other
than by reason of serving as a sub-adviser to one 19b–4(n)(1)(i) under the Securities the Commission in connection with the proposed
or more of the Funds (‘‘Affiliated Sub-Adviser’’). Exchange Act of 1934 (‘‘Act’’),2 notice is changes. See SR–OCC–2017–022.
4 The use of risk factors in OCC’s margin
Each future Series shall obtain shareholder hereby given that on November 13,
approval (including formal approval of the initial methodology is discussed in more detail in the
shareholder(s)) of the Manager of Managers
2017, The Options Clearing Corporation Description of the Proposed Change section below.
Structure (including with respect to Wholly-Owned 5 OCC’s By-Laws and Rules can be found on
1 12 U.S.C. 5465(e)(1).
Subadvisers), prior to relying on the requested OCC’s public website: http://optionsclearing.com/
relief. 2 17 CFR 240.19b–4(n)(1)(i). about/publications/bylaws.jsp.

VerDate Sep<11>2014 21:43 Dec 26, 2017 Jkt 244001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 E:\FR\FM\27DEN1.SGM 27DEN1
Document Created: 2017-12-27 02:24:04
Document Modified: 2017-12-27 02:24:04
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
Dates		The application was filed October 13, 2015, and amended on March 21, 2016, September 30, 2016, February 10, 2017, and November 14, 2017.
Contact		Stephan N. Packs, Senior Counsel, at (202) 551-6853, or David J. Marcinkus, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		82 FR 61353