83 FR 33285 - TriLine Index Solutions, LLC and ETF Series Solutions
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 137 (July 17, 2018)
Federal Register Volume 83, Issue 137 (July 17, 2018)
| Page Range | 33285-33286 | |
| FR Document | 2018-15174 |
[Federal Register Volume 83, Number 137 (Tuesday, July 17, 2018)] [Notices] [Pages 33285-33286] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-15174] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33159; 812-14829] TriLine Index Solutions, LLC and ETF Series Solutions July 11, 2018. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice. ----------------------------------------------------------------------- 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: ETF Series Solutions (the ``Trust''), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series, and TriLine Index Solutions, LLC (the ``Initial Adviser''), a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940. FILING DATES: The application was filed on October 4, 2017 and amended on May 2, 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 August 3, 2018, 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, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. Applicants: ETF Series Solutions, 615 E Michigan Street, Milwaukee, WI 53202, and TriLine Index Solutions, LLC, 8117 Preston Road, Suite 260, Dallas, TX 75225. 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 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. The Initial Adviser is the investment adviser to the Trust's Pickens Oil Response ETF (``Initial Fund'') pursuant to an investment management agreement with the Trust (``Investment Management Agreement'').\1\ Under the terms of the Investment Management Agreement, the Adviser, subject to the supervision of the board of trustees of the Trust (``Board''), provides continuous investment management of the assets of each Subadvised Fund. Consistent with the terms of the Investment Management Agreement, the Adviser may, subject to the approval of the Board, delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Fund to one or more Sub-Advisers.\2\ The Adviser will continue to have overall responsibility for the management and investment of the assets of each Subadvised Fund. The Adviser will evaluate, select, and recommend Sub-Advisers to manage the assets of a Subadvised Fund and will oversee, monitor and review the Sub-Advisers and their performance and [[Page 33286]] recommend the removal or replacement of Sub-Advisers. --------------------------------------------------------------------------- \1\ Applicants request relief with respect to the Initial Fund, as well as to any future series of the Trust and any other existing or future registered open-end management investment company or series thereof that, in each case, is advised by the Initial Adviser or any entity controlling, controlled by, or under common control with, the Initial Adviser or its successors (each, also an ``Adviser''), uses the multi-manager structure described in the application, and complies with the terms and conditions set forth in the application (each, a ``Subadvised Fund''). 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. Future Subadvised Funds may be operated as a master-feeder structure pursuant to section 12(d)(1)(E) of the Act. In such a structure, certain series of the Trust (each, a ``Feeder Fund'') may invest substantially all of their assets in a Subadvised Fund (a ``Master Fund'') pursuant to section 12(d)(1)(E) of the Act. No Feeder Fund will engage any sub- advisers other than through approving the engagement of one or more of the Master Fund's sub-advisers. \2\ As used herein, a ``Sub-Adviser'' for a Subadvised Fund is (1) an indirect or direct ``wholly owned subsidiary'' (as such term is defined in the Act) of the Adviser for that Subadvised Fund, or (2) a sister company of the Adviser for that Subadvised Fund 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 Fund, any Feeder Fund invested in a Master Fund, the Trust, or the Adviser, except to the extent that an affiliation arises solely because the Sub-Adviser serves as a sub-adviser to a Subadvised Fund (``Non-Affiliated Sub-Advisers''). --------------------------------------------------------------------------- 2. Applicants request an order to permit the Adviser, subject to the approval of the Board, to enter into investment sub-advisory agreements with the Sub-Advisers (each, a ``Sub-Advisory Agreement'') and materially amend such 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 Fund to disclose (as both a dollar amount and a percentage of the Subadvised Fund's 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'').\4\ --------------------------------------------------------------------------- \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 Fund, of any Feeder Fund, or of the Adviser, other than by reason of serving as a sub-adviser to one or more of the Subadvised Funds (``Affiliated Sub-Adviser''). \4\ For any Subadvised Fund that is a Master Fund, the relief would also permit any Feeder Fund invested in that Master Fund to disclose Aggregate Fee Disclosure. --------------------------------------------------------------------------- 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 Subadvised Funds' shareholders and notification about sub-advisory changes and enhanced Board oversight to protect the interests of the Subadvised 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 Investment Management Agreements will remain subject to shareholder approval, while the role of the Sub-Advisers is substantially equivalent to that of individual portfolio managers, so that requiring shareholder approval of Sub-Advisory Agreements would impose unnecessary delays and expenses on the Subadvised 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 Subadvised Funds. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-15174 Filed 7-16-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 137 / Tuesday, July 17, 2018 / Notices 33285
file number should be included on the under the Act, Item 19(a)(3) of Form number, or for an applicant using the
subject line if email is used. To help the N–1A, Items 22(c)(1)(ii), 22(c)(1)(iii), Company name box, at http://
Commission process and review your 22(c)(8) and 22(c)(9) of Schedule 14A www.sec.gov/search/search.htm or by
comments more efficiently, please use under the Securities Exchange Act of calling (202) 551–8090.
only one method. The Commission will 1934, and Sections 6–07(2)(a), (b), and
Summary of the Application
post all comments on the Commission’s (c) of Regulation S–X (‘‘Disclosure
internet website (http://www.sec.gov/ Requirements’’). The requested 1. The Initial Adviser is the
rules/sro.shtml). Copies of the exemption would permit an investment investment adviser to the Trust’s
submission, all subsequent adviser to hire and replace certain sub- Pickens Oil Response ETF (‘‘Initial
amendments, all written statements advisers without shareholder approval Fund’’) pursuant to an investment
with respect to the proposed rule and grant relief from the Disclosure management agreement with the Trust
change that are filed with the Requirements as they relate to fees paid (‘‘Investment Management
Commission, and all written to the sub-advisers. Agreement’’).1 Under the terms of the
communications relating to the Investment Management Agreement, the
APPLICANTS: ETF Series Solutions (the
proposed rule change between the Adviser, subject to the supervision of
‘‘Trust’’), a Delaware statutory trust
Commission and any person, other than the board of trustees of the Trust
registered under the Act as an open-end
those that may be withheld from the (‘‘Board’’), provides continuous
management investment company with
public in accordance with the investment management of the assets of
multiple series, and TriLine Index
provisions of 5 U.S.C. 552, will be each Subadvised Fund. Consistent with
Solutions, LLC (the ‘‘Initial Adviser’’), a
available for website viewing and the terms of the Investment
Delaware limited liability company
printing in the Commission’s Public Management Agreement, the Adviser
registered as an investment adviser
Reference Room, 100 F Street NE, may, subject to the approval of the
under the Investment Advisers Act of
Washington, DC 20549, on official Board, delegate portfolio management
1940. responsibilities of all or a portion of the
business days between the hours of
FILING DATES: The application was filed assets of a Subadvised Fund to one or
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for on October 4, 2017 and amended on more Sub-Advisers.2 The Adviser will
inspection and copying at the principal May 2, 2018. continue to have overall responsibility
office of the Exchange. All comments HEARING OR NOTIFICATION OF HEARING: An for the management and investment of
received will be posted without change. order granting the application will be the assets of each Subadvised Fund. The
Persons submitting comments are issued unless the Commission orders a Adviser will evaluate, select, and
cautioned that we do not redact or edit hearing. Interested persons may request recommend Sub-Advisers to manage the
personal identifying information from a hearing by writing to the assets of a Subadvised Fund and will
comment submissions. You should Commission’s Secretary and serving oversee, monitor and review the Sub-
submit only information that you wish applicants with a copy of the request, Advisers and their performance and
to make available publicly. All personally or by mail. Hearing requests
submissions should refer to File should be received by the Commission 1 Applicants request relief with respect to the
by 5:30 p.m. on August 3, 2018, and Initial Fund, as well as to any future series of the
Number SR–NASDAQ–2018–050 and Trust and any other existing or future registered
should be submitted on or before should be accompanied by proof of open-end management investment company or
August 7, 2018. service on applicants, in the form of an series thereof that, in each case, is advised by the
For the Commission, by the Division of
affidavit or, for lawyers, a certificate of Initial Adviser or any entity controlling, controlled
service. Pursuant to rule 0–5 under the by, or under common control with, the Initial
Trading and Markets, pursuant to delegated Adviser or its successors (each, also an ‘‘Adviser’’),
authority.30 Act, hearing requests should state the uses the multi-manager structure described in the
Eduardo A. Aleman, nature of the writer’s interest, any facts application, and complies with the terms and
Assistant Secretary. bearing upon the desirability of a conditions set forth in the application (each, a
‘‘Subadvised Fund’’). For purposes of the requested
[FR Doc. 2018–15177 Filed 7–16–18; 8:45 am]
hearing on the matter, the reason for the order, ‘‘successor’’ is limited to an entity that
request, and the issues contested. results from a reorganization into another
BILLING CODE 8011–01–P
Persons who wish to be notified of a jurisdiction or a change in the type of business
hearing may request notification by organization. Future Subadvised Funds may be
operated as a master-feeder structure pursuant to
SECURITIES AND EXCHANGE writing to the Commission’s Secretary. section 12(d)(1)(E) of the Act. In such a structure,
COMMISSION ADDRESSES: Secretary, U.S. Securities certain series of the Trust (each, a ‘‘Feeder Fund’’)
and Exchange Commission, 100 F Street may invest substantially all of their assets in a
[Investment Company Act Release No. Subadvised Fund (a ‘‘Master Fund’’) pursuant to
NE, Washington, DC 20549–1090.
33159; 812–14829] section 12(d)(1)(E) of the Act. No Feeder Fund will
Applicants: ETF Series Solutions, 615 E engage any sub-advisers other than through
TriLine Index Solutions, LLC and ETF Michigan Street, Milwaukee, WI 53202, approving the engagement of one or more of the
and TriLine Index Solutions, LLC, 8117 Master Fund’s sub-advisers.
Series Solutions 2 As used herein, a ‘‘Sub-Adviser’’ for a
Preston Road, Suite 260, Dallas, TX
July 11, 2018. Subadvised Fund is (1) an indirect or direct
75225. ‘‘wholly owned subsidiary’’ (as such term is defined
AGENCY: Securities and Exchange in the Act) of the Adviser for that Subadvised Fund,
FOR FURTHER INFORMATION CONTACT:
Commission (‘‘Commission’’). or (2) a sister company of the Adviser for that
Bruce R. MacNeil, Senior Counsel, at Subadvised Fund that is an indirect or direct
ACTION: Notice.
(202) 551–6817, or Kaitlin C. Bottock, ‘‘wholly-owned subsidiary’’ of the same company
Notice of an application under section Branch Chief, at (202) 551–6825 that, indirectly or directly, wholly owns the Adviser
daltland on DSKBBV9HB2PROD with NOTICES
(Division of Investment Management, (each of (1) and (2) a ‘‘Wholly-Owned Sub-Adviser’’
6(c) of the Investment Company Act of and collectively, the ‘‘Wholly-Owned Sub-
1940 (‘‘Act’’) for an exemption from Chief Counsel’s Office). Advisers’’), or (3) not an ‘‘affiliated person’’ (as such
section 15(a) of the Act and rule 18f–2 SUPPLEMENTARY INFORMATION: The term is defined in section 2(a)(3) of the Act) of the
under the Act, as well as from certain following is a summary of the Subadvised Fund, any Feeder Fund invested in a
Master Fund, the Trust, or the Adviser, except to
disclosure requirements in rule 20a–1 application. The complete application the extent that an affiliation arises solely because
may be obtained via the Commission’s the Sub-Adviser serves as a sub-adviser to a
30 17 CFR 200.30–3(a)(12). website by searching for the file Subadvised Fund (‘‘Non-Affiliated Sub-Advisers’’).
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![33286 Federal Register / Vol. 83, No. 137 / Tuesday, July 17, 2018 / Notices
recommend the removal or replacement Applicants believe that the requested should be received by the Commission
of Sub-Advisers. relief from the Disclosure Requirements by 5:30 p.m. on August 3, 2018, and
2. Applicants request an order to meets this standard because it will should be accompanied by proof of
permit the Adviser, subject to the improve the Adviser’s ability to service on applicants, in the form of an
approval of the Board, to enter into negotiate fees paid to the Sub-Advisers affidavit or, for lawyers, a certificate of
investment sub-advisory agreements that are more advantageous for the service. Pursuant to rule 0–5 under the
with the Sub-Advisers (each, a ‘‘Sub- Subadvised Funds. Act, hearing requests should state the
Advisory Agreement’’) and materially For the Commission, by the Division of nature of the writer’s interest, any facts
amend such Sub-Advisory Agreements Investment Management, under delegated bearing upon the desirability of a
without obtaining the shareholder authority. hearing on the matter, the reason for the
approval required under section 15(a) of Eduardo A. Aleman, request, and the issues contested.
the Act and rule 18f–2 under the Act.3 Persons who wish to be notified of a
Assistant Secretary.
Applicants also seek an exemption from hearing may request notification by
[FR Doc. 2018–15174 Filed 7–16–18; 8:45 am]
the Disclosure Requirements to permit a writing to the Commission’s Secretary.
BILLING CODE 8011–01–P
Subadvised Fund to disclose (as both a ADDRESSES: Secretary, U.S. Securities
dollar amount and a percentage of the and Exchange Commission, 100 F Street
Subadvised Fund’s net assets): (a) The NE, Washington, DC 20549–1090.
SECURITIES AND EXCHANGE
aggregate fees paid to the Adviser and Applicants: ETF Series Solutions, 615 E
any Wholly-Owned Sub-Adviser; (b) the COMMISSION
Michigan Street, Milwaukee, WI 53202,
aggregate fees paid to Non-Affiliated [Investment Company Act Release No. and SL Advisors, LLC, 210 Elmer Street,
Sub-Advisers; and (c) the fee paid to 33158; 812–14828] Westfield, NJ 07090–2128.
each Affiliated Sub-Adviser FOR FURTHER INFORMATION CONTACT:
(collectively, Aggregate Fee SL Advisors, LLC and ETF Series
Solutions Bruce R. MacNeil, Senior Counsel, at
Disclosure’’).4 (202) 551–6817, or Kaitlin C. Bottock,
3. Applicants agree that any order July 11, 2018. Branch Chief, at (202) 551–6825
granting the requested relief will be
AGENCY: Securities and Exchange (Division of Investment Management,
subject to the terms and conditions
Commission (‘‘Commission’’). Chief Counsel’s Office).
stated in the application. Such terms
ACTION: Notice. SUPPLEMENTARY INFORMATION: The
and conditions provide for, among other
safeguards, appropriate disclosure to following is a summary of the
Notice of an application under section application. The complete application
Subadvised Funds’ shareholders and 6(c) of the Investment Company Act of
notification about sub-advisory changes may be obtained via the Commission’s
1940 (‘‘Act’’) for an exemption from website by searching for the file
and enhanced Board oversight to protect section 15(a) of the Act and rule 18f–2
the interests of the Subadvised Funds’ number, or for an applicant using the
under the Act, as well as from certain Company name box, at http://
shareholders. disclosure requirements in rule 20a–1
4. Section 6(c) of the Act provides that www.sec.gov/search/search.htm or by
under the Act, Item 19(a)(3) of Form calling (202) 551–8090.
the Commission may exempt any N–1A, Items 22(c)(1)(ii), 22(c)(1)(iii),
person, security, or transaction or any 22(c)(8) and 22(c)(9) of Schedule 14A Summary of the Application
class or classes of persons, securities, or under the Securities Exchange Act of
transactions from any provisions of the 1. The Initial Adviser is the
1934, and Sections 6–07(2)(a), (b), and investment adviser to the American
Act, or any rule thereunder, if such (c) of Regulation S–X (‘‘Disclosure
relief is necessary or appropriate in the Energy Independence ETF (‘‘Initial
Requirements’’). The requested Fund’’) pursuant to an investment
public interest and consistent with the
exemption would permit an investment management agreement with the Trust
protection of investors and purposes
adviser to hire and replace certain sub- (‘‘Investment Management
fairly intended by the policy and
advisers without shareholder approval Agreement’’).1 Under the terms of the
provisions of the Act. Applicants
and grant relief from the Disclosure Investment Management Agreement, the
believe that the requested relief meets
Requirements as they relate to fees paid Adviser, subject to the supervision of
this standard because, as further
to the sub-advisers.
explained in the application, the
APPLICANTS: ETF Series Solutions (the 1 Applicants request relief with respect to the
Investment Management Agreements Initial Fund, as well as to any future series of the
will remain subject to shareholder ‘‘Trust’’), a Delaware statutory trust
Trust and any other existing or future registered
approval, while the role of the Sub- registered under the Act as an open-end open-end management investment company or
Advisers is substantially equivalent to management investment company with series thereof that, in each case, is advised by the
that of individual portfolio managers, so multiple series, and SL Advisors, LLC Initial Adviser or any entity controlling, controlled
(the ‘‘Initial Adviser’’), a New Jersey by, or under common control with, the Initial
that requiring shareholder approval of Adviser or its successors (each, also an ‘‘Adviser’’),
Sub-Advisory Agreements would limited liability company registered as uses the multi-manager structure described in the
impose unnecessary delays and an investment adviser under the application, and complies with the terms and
expenses on the Subadvised Funds. Investment Advisers Act of 1940. conditions set forth in the application (each, a
FILING DATES: The application was filed ‘‘Subadvised Fund’’). For purposes of the requested
order, ‘‘successor’’ is limited to an entity that
3 The requested relief will not extend to any sub- on October 2, 2017 and amended on results from a reorganization into another
adviser, other than a Wholly-Owned Sub-Adviser, May 3, 2018. jurisdiction or a change in the type of business
who is an affiliated person, as defined in section HEARING OR NOTIFICATION OF HEARING: An organization. Future Subadvised Funds may be
daltland on DSKBBV9HB2PROD with NOTICES
2(a)(3) of the Act, of the Subadvised Fund, of any operated as a master-feeder structure pursuant to
Feeder Fund, or of the Adviser, other than by order granting the application will be section 12(d)(1)(E) of the Act. In such a structure,
reason of serving as a sub-adviser to one or more issued unless the Commission orders a certain series of the Trust (each, a ‘‘Feeder Fund’’)
of the Subadvised Funds (‘‘Affiliated Sub- hearing. Interested persons may request may invest substantially all of their assets in a
Adviser’’). a hearing by writing to the Subadvised Fund (a ‘‘Master Fund’’) pursuant to
4 For any Subadvised Fund that is a Master Fund, section 12(d)(1)(E) of the Act. No Feeder Fund will
the relief would also permit any Feeder Fund
Commission’s Secretary and serving engage any sub-advisers other than through
invested in that Master Fund to disclose Aggregate applicants with a copy of the request, approving the engagement of one or more of the
Fee Disclosure. personally or by mail. Hearing requests Master Fund’s sub-advisers.
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Document Created: 2018-07-17 01:39:08
Document Modified: 2018-07-17 01:39:08
| 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 on October 4, 2017 and amended on May 2, 2018. | |
| 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). | |
| FR Citation | 83 FR 33285 |
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