83_FR_23402 83 FR 23305 - PFM Multi-Manager Series Trust and PFM Asset Management LLC

83 FR 23305 - PFM Multi-Manager Series Trust and PFM Asset Management LLC

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 97 (May 18, 2018)

Page Range23305-23306
FR Document2018-10639

Federal Register, Volume 83 Issue 97 (Friday, May 18, 2018) 
[Federal Register Volume 83, Number 97 (Friday, May 18, 2018)]
[Notices]
[Pages 23305-23306]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-10639]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33098; 812-14815]


PFM Multi-Manager Series Trust and PFM Asset Management LLC

May 15, 2018.
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.

Applicants: PFM Multi-Manager Series Trust (the ``Trust''), a Delaware 
statutory trust registered under the Act as an open-end management 
investment company, and PFM Asset Management LLC (the ``Initial 
Adviser''), a Delaware limited liability company registered as an 
investment adviser under the Investment Advisers Act of 1940 
(collectively with the Trust, the ``Applicants'').

Filing Dates:  The application was filed on August 22, 2017 and amended 
on March 1, 2018, and May 9, 2018.

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 June 11, 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: One Keystone Plaza, 
Suite 300, North Front and Market Streets, Harrisburg, PA 17101-2044.

FOR FURTHER INFORMATION CONTACT:  Bruce R. MacNeil, Senior Counsel, at 
(202) 551-6817, or Kaitlin C. Bottock, 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, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Summary of the Application

    1. The Adviser will serve as the investment adviser to the 
Subadvised Series pursuant to an investment advisory agreement with the 
Trust (the ``Investment Management Agreement'').\1\ The Adviser will 
provide the Subadvised Series with continuous investment management 
services, subject to the supervision of, and policies established by, 
the board of trustees of the Trust (``Board''). The Investment 
Management 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 
Subadvised Series, subject to the supervision and direction of the 
Adviser.\2\ The primary responsibility for managing each Subadvised 
Series 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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    \1\ Applicants request relief with respect to the named 
Applicants, as well as to any future series of the Trust and any 
other registered open-end management investment company or series 
thereof that: (a) Is advised by the Initial Adviser, its successors, 
or any entity controlling, controlled by or under common control 
with the Initial Adviser or its successors (each, an ``Adviser''); 
(b) uses the multi-manager structure described in the application; 
and (c) complies with the terms and conditions set forth in the 
application (each, a ``Subadvised Series''). For purposes of the 
requested order, ``successor'' is limited to an entity that results 
from a reorganization into another jurisdiction or a change in the 
type of business organization.
    \2\ A ``Sub-Adviser'' for a Subadvised Series is (1) an indirect 
or direct ``wholly-owned subsidiary'' (as such term is defined in 
the Act) of the Adviser for that Subadvised Series, or (2) a sister 
company of the Adviser for that Subadvised Series that is an 
indirect or direct ``wholly-owned subsidiary'' of the same company 
that, indirectly or directly, wholly owns the Adviser (each of (1) 
and (2) a ``Wholly-Owned Sub-Adviser'' and collectively, the 
``Wholly-Owned Sub-Advisers''), or (3) not an ``affiliated person'' 
(as such term is defined in section 2(a)(3) of the Act) of the 
Subadvised Series or the Adviser, except to the extent that an 
affiliation arises solely because the Sub-Adviser serves as a sub-
adviser to a Subadvised Series (``Non-Affiliated Sub-Advisers'').
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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 
Subadvised Series to disclose (as both a dollar amount and a percentage 
of the Subadvised Series' net assets): (a) The aggregate fees paid to 
the Adviser and any Wholly-Owned Sub-Adviser; (b) the aggregate fees 
paid to Non-Affiliated Sub-Advisers; and (c) the fee paid to each 
Affiliated Sub-Adviser (collectively, ``Aggregate Fee Disclosure'').
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    \3\ The requested relief will not extend to any sub-adviser, 
other than a Wholly-Owned Sub-Adviser, who is an affiliated person, 
as defined in Section 2(a)(3) of the Act, of the Subadvised Series, 
the Trust or of the Adviser, other than by reason of serving as a 
sub-adviser to one or more of the Subadvised Series (``Affiliated 
Sub-Adviser'').
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    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions

[[Page 23306]]

stated in the application. Such terms and conditions provide for, among 
other safeguards, appropriate disclosure to Subadvised Series 
shareholders and notification about sub-advisory changes and enhanced 
Board oversight to protect the interests of the Subadvised Series' 
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 Investment 
Management 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 Subadvised Series.
    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 Subadvised Series.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10639 Filed 5-17-18; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 97 / Friday, May 18, 2018 / Notices 23305 Washington, DC 20549, on official (collectively with the Trust, the the Subadvised Series with continuous business days between the hours of ‘‘Applicants’’). investment management services, 10:00 a.m. and 3:00 p.m. Copies of the FILING DATES: The application was filed subject to the supervision of, and filing also will be available for on August 22, 2017 and amended on policies established by, the board of inspection and copying at the principal March 1, 2018, and May 9, 2018. trustees of the Trust (‘‘Board’’). The office of the Exchange. All comments HEARING OR NOTIFICATION OF HEARING: Investment Management Agreement received will be posted without change. An order granting the application will permits the Adviser, subject to the Persons submitting comments are be issued unless the Commission orders approval of the Board, to delegate to one cautioned that we do not redact or edit a hearing. Interested persons may or more sub-advisers (each, a ‘‘Sub- personal identifying information from request a hearing by writing to the Adviser’’ and collectively, the ‘‘Sub- comment submissions. You should Commission’s Secretary and serving Advisers’’) the responsibility to provide submit only information that you wish applicants with a copy of the request, the day-to-day portfolio investment to make available publicly. All personally or by mail. Hearing requests management of each Subadvised Series, submissions should refer to File should be received by the Commission subject to the supervision and direction Number SR–BX–2018–019 and should of the Adviser.2 The primary by 5:30 p.m. on June 11, 2018, and be submitted on or before June 8, 2018. responsibility for managing each should be accompanied by proof of Subadvised Series will remain vested in For the Commission, by the Division of service on the applicants, in the form of Trading and Markets, pursuant to delegated the Adviser. The Adviser will hire, an affidavit or, for lawyers, a certificate authority.14 evaluate, allocate assets to and oversee of service. Pursuant to rule 0–5 under Eduardo A. Aleman, the Sub-Advisers, including the Act, hearing requests should state determining whether a Sub-Adviser Assistant Secretary. the nature of the writer’s interest, any should be terminated, at all times [FR Doc. 2018–10605 Filed 5–17–18; 8:45 am] facts bearing upon the desirability of a subject to the authority of the Board. BILLING CODE 8011–01–P hearing on the matter, the reason for the 2. Applicants request an exemption to request, and the issues contested. permit the Adviser, subject to Board Persons who wish to be notified of a approval, to hire certain Sub-Advisers SECURITIES AND EXCHANGE hearing may request notification by pursuant to Sub-Advisory Agreements COMMISSION writing to the Commission’s Secretary. and materially amend existing Sub- [Investment Company Act Release No. ADDRESSES: Secretary, U.S. Securities Advisory Agreements without obtaining 33098; 812–14815] and Exchange Commission, 100 F Street the shareholder approval required under NE, Washington, DC 20549–1090. section 15(a) of the Act and rule 18f–2 PFM Multi-Manager Series Trust and Applicants: One Keystone Plaza, Suite under the Act.3 Applicants also seek an PFM Asset Management LLC 300, North Front and Market Streets, exemption from the Disclosure Harrisburg, PA 17101–2044. Requirements to permit a Subadvised May 15, 2018. FOR FURTHER INFORMATION CONTACT: Series to disclose (as both a dollar AGENCY: Securities and Exchange amount and a percentage of the Bruce R. MacNeil, Senior Counsel, at Commission (‘‘Commission’’). Subadvised Series’ net assets): (a) The (202) 551–6817, or Kaitlin C. Bottock, ACTION: Notice. Branch Chief, at (202) 551–6825 aggregate fees paid to the Adviser and (Division of Investment Management, any Wholly-Owned Sub-Adviser; (b) the Notice of an application under section Chief Counsel’s Office). aggregate fees paid to Non-Affiliated 6(c) of the Investment Company Act of SUPPLEMENTARY INFORMATION: The Sub-Advisers; and (c) the fee paid to 1940 (‘‘Act’’) for an exemption from following is a summary of the each Affiliated Sub-Adviser section 15(a) of the Act and rule 18f–2 application. The complete application (collectively, ‘‘Aggregate Fee under the Act, as well as from certain Disclosure’’). disclosure requirements in rule 20a–1 may be obtained via the Commission’s website by searching for the file 3. Applicants agree that any order under the Act, Item 19(a)(3) of Form granting the requested relief will be N–1A, Items 22(c)(1)(ii), 22(c)(1)(iii), number, or an applicant using the Company name box, at http:// subject to the terms and conditions 22(c)(8) and 22(c)(9) of Schedule 14A under the Securities Exchange Act of www.sec.gov/search/search.htm or by results from a reorganization into another 1934, and sections 6–07(2)(a), (b), and calling (202) 551–8090. jurisdiction or a change in the type of business (c) of Regulation S–X (‘‘Disclosure organization. Summary of the Application 2 A ‘‘Sub-Adviser’’ for a Subadvised Series is (1) Requirements’’). The requested exemption would permit an investment 1. The Adviser will serve as the an indirect or direct ‘‘wholly-owned subsidiary’’ (as such term is defined in the Act) of the Adviser for adviser to hire and replace certain sub- investment adviser to the Subadvised that Subadvised Series, or (2) a sister company of advisers without shareholder approval Series pursuant to an investment the Adviser for that Subadvised Series that is an and grant relief from the Disclosure advisory agreement with the Trust (the indirect or direct ‘‘wholly-owned subsidiary’’ of the ‘‘Investment Management same company that, indirectly or directly, wholly Requirements as they relate to fees paid owns the Adviser (each of (1) and (2) a ‘‘Wholly- to the sub-advisers. Agreement’’).1 The Adviser will provide Owned Sub-Adviser’’ and collectively, the ‘‘Wholly-Owned Sub-Advisers’’), or (3) not an APPLICANTS: PFM Multi-Manager Series 1 Applicants request relief with respect to the ‘‘affiliated person’’ (as such term is defined in Trust (the ‘‘Trust’’), a Delaware statutory named Applicants, as well as to any future series section 2(a)(3) of the Act) of the Subadvised Series trust registered under the Act as an of the Trust and any other registered open-end or the Adviser, except to the extent that an open-end management investment management investment company or series thereof affiliation arises solely because the Sub-Adviser daltland on DSKBBV9HB2PROD with NOTICES that: (a) Is advised by the Initial Adviser, its serves as a sub-adviser to a Subadvised Series company, and PFM Asset Management successors, or any entity controlling, controlled by (‘‘Non-Affiliated Sub-Advisers’’). LLC (the ‘‘Initial Adviser’’), a Delaware or under common control with the Initial Adviser 3 The requested relief will not extend to any sub- limited liability company registered as or its successors (each, an ‘‘Adviser’’); (b) uses the adviser, other than a Wholly-Owned Sub-Adviser, an investment adviser under the multi-manager structure described in the who is an affiliated person, as defined in Section application; and (c) complies with the terms and 2(a)(3) of the Act, of the Subadvised Series, the Investment Advisers Act of 1940 conditions set forth in the application (each, a Trust or of the Adviser, other than by reason of ‘‘Subadvised Series’’). For purposes of the requested serving as a sub-adviser to one or more of the 14 17 CFR 200.30–3(a)(12). order, ‘‘successor’’ is limited to an entity that Subadvised Series (‘‘Affiliated Sub-Adviser’’). VerDate Sep<11>2014 16:38 May 17, 2018 Jkt 244001 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 E:\FR\FM\18MYN1.SGM 18MYN1

23306 Federal Register / Vol. 83, No. 97 / Friday, May 18, 2018 / Notices stated in the application. Such terms Authority, Inc. (‘‘FINRA’’) filed with the days before a scheduled prehearing and conditions provide for, among other Securities and Exchange Commission conference (‘‘late cancellation fee’’). safeguards, appropriate disclosure to (‘‘SEC’’ or ‘‘Commission’’) the proposed FINRA is also proposing to pay a $100 Subadvised Series shareholders and rule change as described in Items I, II, honorarium to each arbitrator who was notification about sub-advisory changes and III below, which Items have been scheduled to attend the prehearing and enhanced Board oversight to protect prepared by FINRA. The Commission is conference that was cancelled within the interests of the Subadvised Series’ publishing this notice to solicit three business days of the prehearing shareholders. comments on the proposed rule change conference. 4. Section 6(c) of the Act provides that from interested persons. the Commission may exempt any Background person, security, or transaction or any I. Self-Regulatory Organization’s Statement of the Terms of Substance of The Codes have several rules that class or classes of persons, securities, or address postponements and transactions from any provisions of the the Proposed Rule Change cancellations of hearings.4 FINRA Rules Act, or any rule thereunder, if such FINRA is proposing to amend FINRA 12601(b)(1) and 13601(b)(1) provide that relief is necessary or appropriate in the Rules 12500 and 12501 of the Code of for each postponement agreed to by the public interest and consistent with the Arbitration Procedure for Customer parties, or granted upon request of one protection of investors and purposes Disputes (‘‘Customer Code’’) and FINRA or more parties, FINRA assesses a fairly intended by the policy and Rules 13500 and 13501 of the Code of postponement fee to the parties, equal to provisions of the Act. Applicants Arbitration Procedure for Industry the applicable hearing session fee.5 In believe that the requested relief meets Disputes (‘‘Industry Code’’ and together, addition, under FINRA Rules this standard because, as further ‘‘Codes’’), to charge a $100 per-arbitrator 12601(b)(2) and 13601(b)(2), a party or explained in the application, the fee to parties who request cancellation parties that make postponement Investment Management Agreements of a prehearing conference within three requests within 10 days before a will remain subject to shareholder business days before a scheduled scheduled hearing session are required approval while the role of the Sub- prehearing conference. The proposed to pay a $600 per-arbitrator late Advisers is substantially similar to that rule change would also amend FINRA cancellation fee.6 Finally, if a hearing is of individual portfolio managers, so that Rules 12214(a) and 13214(a) of the cancelled or postponed due to requiring shareholder approval of Sub- Codes to create a $100 honorarium to settlement or withdrawal of a claim, Advisory Agreements would impose pay each arbitrator scheduled to attend FINRA Rules 12902(d) and 13902(d) unnecessary delays and expenses on the a prehearing conference that was provide that if FINRA receives a Subadvised Series. cancelled within three business days of settlement or withdrawal notice 10 days Applicants believe that the requested the prehearing conference. or fewer prior to the date that the relief from the Disclosure Requirements The text of the proposed rule change hearing is scheduled to begin, parties meets this standard because it will is available on FINRA’s website at that paid a filing fee will not be entitled improve the Adviser’s ability to http://www.finra.org, at the principal to any refund of the filing fee.7 negotiate fees paid to the Sub-Advisers office of FINRA and at the Commission’s Public Reference Room. FINRA believes that it is appropriate that are more advantageous for the to address late cancellations of Subadvised Series. II. Self-Regulatory Organization’s prehearing conferences by charging a For the Commission, by the Division of Statement of the Purpose of, and late cancellation fee to the parties. In Investment Management, under delegated Statutory Basis for, the Proposed Rule addition, FINRA proposes to pay an authority. Change honorarium in the same amount to those Eduardo A. Aleman, In its filing with the Commission, Assistant Secretary. FINRA included statements concerning 4 A hearing is a meeting between the arbitrators [FR Doc. 2018–10639 Filed 5–17–18; 8:45 am] and parties to determine the merits of the the purpose of and basis for the BILLING CODE 8011–01–P arbitration. See FINRA Rules 12100(o) and proposed rule change and discussed any 13100(o). comments it received on the proposed 5 These rules also permit the panel to allocate the rule change. The text of these statements fee among the party or parties that agreed to or SECURITIES AND EXCHANGE may be examined at the places specified requested the postponement, to assess part or all of COMMISSION in Item IV below. FINRA has prepared any postponement fees against a party that did not request the postponement if the panel determines [Release No. 34–83227; File No. SR–FINRA– summaries, set forth in sections A, B, that the non-requesting party caused or contributed 2018–019] and C below, of the most significant to the need for the postponement, and to waive the aspects of such statements. fees. This fee is paid to FINRA and not passed Self-Regulatory Organizations; through to the arbitrators. Financial Industry Regulatory A. Self-Regulatory Organization’s 6 These rules also permit the panel to allocate the Authority, Inc.; Notice of Filing of a Statement of the Purpose of, and $600 per-arbitrator fee among the requesting parties Statutory Basis for, the Proposed Rule if more than one party requests postponement, to Proposed Rule Change Relating To allocate all or a portion of the $600 per-arbitrator Create a Fee and Honorarium for Late Change fee to the non-requesting party or parties if the Cancellation of a Prehearing 1. Purpose arbitrators determine that the non-requesting party Conference or parties caused or contributed to the need for the Introduction postponement, and to use its discretion to waive the May 14, 2018. fee in the event of an extraordinary circumstance, FINRA proposes to charge parties to provided verification of such circumstance is Pursuant to Section 19(b)(1) of the daltland on DSKBBV9HB2PROD with NOTICES an arbitration a $100 per-arbitrator fee if received. See FINRA Rules 12601(b)(2) and Securities Exchange Act of 1934 a prehearing conference is cancelled 3 at 13601(b)(2). (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 the request of one or more parties that 7 Customers, associated persons, and other non- notice is hereby given that on May 4, members who file a claim, counterclaim, cross was submitted within three business claim or third party claim must pay a filing fee to 2018, Financial Industry Regulatory initiate an arbitration, unless the fee is deferred. See 3 References to cancellations of prehearing FINRA Rule 12900(a)(1); see also FINRA Rule 1 15 U.S.C. 78s(b)(1). conferences include postponements of such 13900(a)(1) (addressing filing fees for associated 2 17 CFR 240.19b–4. conferences. persons). VerDate Sep<11>2014 16:38 May 17, 2018 Jkt 244001 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 E:\FR\FM\18MYN1.SGM 18MYN1


Document Created: 2018-05-18 02:16:06
Document Modified: 2018-05-18 02:16:06
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 22, 2017 and amended on March 1, 2018, and May 9, 2018.
ContactBruce R. MacNeil, Senior Counsel, at (202) 551-6817, or Kaitlin C. Bottock, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation83 FR 23305 
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