83 FR 44374 - Innovator ETFs Trust, et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 169 (August 30, 2018)

Page Range		44374-44375
FR Document		2018-18776
Federal Register, Volume 83 Issue 169 (Thursday, August 30, 2018)
[Federal Register Volume 83, Number 169 (Thursday, August 30, 2018)]
[Notices]
[Pages 44374-44375]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18776]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33214; File No. 812-14837]


Innovator ETFs Trust, et al.

August 24, 2018.
AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 12(d)(1)(J) of 
the Investment Company Act of 1940 (the ``Act'') for an exemption from 
sections 12(d)(1)(A), (B), and (C) of the Act and under sections 6(c) 
and 17(b) of the Act for an exemption from section 17(a) of the Act. 
The requested order would permit certain registered open-end investment 
companies to acquire shares of certain registered open-end investment 
companies, registered closed-end investment companies, business 
development companies, as defined in section 2(a)(48) of the Act 
(``BDCs''), and registered unit investment trusts (collectively, 
``Underlying Funds'') that are within and outside the same group of 
investment companies as the acquiring investment companies, in excess 
of the limits in section 12(d)(1) of the Act.

APPLICANTS: Innovator ETFs Trust (the ``Trust''), a Delaware statutory 
trust that is registered under the Act as an open-end management 
investment company with multiple series, Innovator Capital Management, 
LLC (the ``Initial Adviser''), a limited liability company organized 
under the laws of the state of Delaware that is registered as an 
investment adviser under the Investment Advisers Act of 1940, and 
Foreside Fund Services, LLC (the ``Distributor''), registered as a 
broker-dealer under the Securities Exchange Act of 1934 (the ``1934 
Act'') and a member of the Financial Industry Regulatory Authority.

FILING DATES: The application was filed on October 31, 2017, and 
amended on May 1, 2018.

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 September 18, 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: Innovator ETFs Trust 
and Innovator Capital Management, LLC, 120 North Hale Street, Suite 
200, Wheaton, IL 60187; Foreside Fund Services, LLC, Three Canal Plaza, 
Suite 100, Portland, ME 04101.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or Andrea Ottomanelli Magovern, Branch 
Chief, at (202) 551-6821 (Division of Investment Management, Chief 
Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's 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. Applicants request an order to permit (a) each Fund \1\ (each a 
``Fund of Funds'') to acquire shares of Underlying Funds \2\ in excess 
of the limits in sections 12(d)(1)(A) and (C) of the Act and (b) each 
Underlying Fund that is a registered open-end management

[[Page 44375]]

investment company or series thereof, their principal underwriters, and 
any broker or dealer registered under the 1934 Act to sell shares of 
the Underlying Funds to the Fund of Funds in excess of the limits in 
section 12(d)(1)(B) of the Act.\3\ Applicants also request an order of 
exemption under sections 6(c) and 17(b) of the Act from the prohibition 
on certain affiliated transactions in section 17(a) of the Act to the 
extent necessary to permit the Underlying Funds to sell their shares 
to, and redeem their shares from, the Funds of Funds.\4\ Applicants 
state that such transactions will be consistent with the policies of 
each Fund of Funds and each Underlying Fund and with the general 
purposes of the Act and will be based on the net asset values of the 
Underlying Funds.
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    \1\ Applicants request that the order apply not only to the 
existing series of the Trust (the ``Initial Funds''), but that the 
order also extend to any future series of the Trust and any other 
existing or future registered open-end management investment 
companies and any series thereof that are part of the same ``group 
of investment companies,'' as defined in section 12(d)(1)(G)(ii) of 
the Act, as the Trust and are, or may in the future be, advised by 
the Initial Adviser or its successor or any other investment adviser 
controlling, controlled by, or under common control with the Initial 
Adviser or its successor (together with the Initial Funds, each 
series a ``Fund,'' and collectively, the ``Funds''). Applicants 
further request that the order also apply to any future principal 
underwriter and distributor for a 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. For purposes of the request for 
relief, the term ``group of investment companies'' means any two or 
more registered investment companies, including closed-end 
investment companies, and BDCs, that hold themselves out to 
investors as related companies for purposes of investment and 
investor services.
    \2\ Certain of the Underlying Funds have obtained exemptions 
from the Commission necessary to permit their shares to be listed 
and traded on a national securities exchange at negotiated prices 
and, accordingly, to operate as an exchange-traded fund (``ETF'').
    \3\ Applicants are not requesting relief for a Fund of Funds to 
invest in BDCs and registered closed-end investment companies that 
are not listed and traded on a national securities exchange.
    \4\ A Fund of Funds generally would purchase and sell shares of 
an Underlying Fund that operates as an ETF or closed-end fund 
through secondary market transactions rather than through principal 
transactions with the Underlying Fund. Applicants nevertheless 
request relief from sections 17(a)(1) and (2) to permit each ETF or 
closed-end fund that is an affiliated person, or an affiliated 
person of an affiliated person, as defined in section 2(a)(3) of the 
Act, of a Fund of Funds, to sell shares to or redeem shares from the 
Fund of Funds. This includes, in the case of sales and redemptions 
of shares of ETFs, the in-kind transactions that accompany such 
sales and redemptions. Applicants are not seeking relief from 
section 17(a) for, and the requested relief will not apply to, 
transactions where an ETF, BDC or closed-end fund could be deemed an 
affiliated person, or an affiliated person of an affiliated person, 
of a Fund of Funds because an investment adviser to the ETF, BDC or 
closed-end fund or an entity controlling, controlled by or under 
common control with the investment adviser to the ETF, BDC or 
closed-end fund, is also an investment adviser to the Fund of Funds.
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    2. 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 are designed to, among other things, help 
prevent any potential (i) undue influence over an Underlying Fund that 
is not in the same ``group of investment companies'' as the Fund of 
Funds 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), (B), and (C) of the Act.
    3. 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. 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.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18776 Filed 8-29-18; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Notices 44375

investment company or series thereof, interest and the protection of investors. Market’s governing documents. The text
their principal underwriters, and any Section 17(b) of the Act authorizes the of the proposed rule change is available
broker or dealer registered under the Commission to grant an order from the principal office of the
1934 Act to sell shares of the permitting a transaction otherwise Exchange, at the Commission’s Public
Underlying Funds to the Fund of Funds prohibited by section 17(a) if it finds Reference Room and also on the
in excess of the limits in section that (a) the terms of the proposed Exchange’s internet website at http://
12(d)(1)(B) of the Act.3 Applicants also transaction are fair and reasonable and boxoptions.com.
request an order of exemption under do not involve overreaching on the part
sections 6(c) and 17(b) of the Act from of any person concerned; (b) the II. Self-Regulatory Organization’s
the prohibition on certain affiliated proposed transaction is consistent with Statement of the Purpose of, and
transactions in section 17(a) of the Act the policies of each registered Statutory Basis for, the Proposed Rule
to the extent necessary to permit the investment company involved; and (c) Change
Underlying Funds to sell their shares to, the proposed transaction is consistent In its filing with the Commission, the
and redeem their shares from, the Funds with the general purposes of the Act. self-regulatory organization included
of Funds.4 Applicants state that such Section 6(c) of the Act permits the statements concerning the purpose of,
transactions will be consistent with the Commission to exempt any persons or and basis for, the proposed rule change
policies of each Fund of Funds and each transactions from any provision of the and discussed any comments it received
Underlying Fund and with the general Act if such exemption is necessary or on the proposed rule change. The text
purposes of the Act and will be based appropriate in the public interest and of these statements may be examined at
on the net asset values of the consistent with the protection of the places specified in Item IV below.
Underlying Funds. investors and the purposes fairly The self-regulatory organization has
2. Applicants agree that any order intended by the policy and provisions of prepared summaries, set forth in
granting the requested relief will be the Act. Sections A, B, and C below, of the most
subject to the terms and conditions For the Commission, by the Division of significant aspects of such statements.
stated in the application. Such terms Investment Management, pursuant to
and conditions are designed to, among A. Self-Regulatory Organization’s
delegated authority.
other things, help prevent any potential Statement of the Purpose of, and
Eduardo A. Aleman,
(i) undue influence over an Underlying Statutory Basis for, the Proposed Rule
Assistant Secretary. Change
Fund that is not in the same ‘‘group of [FR Doc. 2018–18776 Filed 8–29–18; 8:45 am]
investment companies’’ as the Fund of 1. Purpose
BILLING CODE 8011–01–P
Funds through control or voting power,
or in connection with certain services, The purpose of this filing is to reflect
transactions, and underwritings, (ii) a non-substantive name change in the
SECURITIES AND EXCHANGE Market’s governing documents. On July
excessive layering of fees, and (iii) COMMISSION
overly complex fund structures, which 13, 2018, the BOX Market LLC Board of
are the concerns underlying the limits [Release No. 34–83949; File No. SR–BOX– Directors approved that the name of
in sections 12(d)(1)(A), (B), and (C) of 2018–26] BOX Market LLC be changed to ‘‘BOX
the Act. Options Market LLC’’ and that each
Self-Regulatory Organizations; BOX officer of the Company be, and hereby
3. Section 12(d)(1)(J) of the Act
Options Exchange LLC; Notice of is, authorized and directed to undertake
provides that the Commission may
Filing and Immediate Effectiveness of any actions required or advisable to
exempt any person, security, or
a Proposed Rule Change To Reflect a carry out the name change, including
transaction, or any class or classes of
Non-Substantive Name Change in the with respect to the SEC and any
persons, securities, or transactions, from
Market’s Governing Documents governmental or third parties. The
any provision of section 12(d)(1) if the
exemption is consistent with the public August 27, 2018. Exchange intends for these changes to
Pursuant to Section 19(b)(1) of the be effective upon filing.
3 Applicants are not requesting relief for a Fund Securities Exchange Act of 1934 As proposed, references to the
of Funds to invest in BDCs and registered closed- (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Market’s name will be deleted and
end investment companies that are not listed and
notice is hereby given that on August revised to state the new name, as
traded on a national securities exchange. described more fully below. No other
4 A Fund of Funds generally would purchase and 15, 2018, BOX Options Exchange LLC
sell shares of an Underlying Fund that operates as (the ‘‘Exchange’’) filed with the substantive changes are being proposed
an ETF or closed-end fund through secondary Securities and Exchange Commission in this filing. The Exchange represents
market transactions rather than through principal
(‘‘Commission’’) the proposed rule that these changes are concerned solely
transactions with the Underlying Fund. Applicants with the administration of the Market, a
nevertheless request relief from sections 17(a)(1) change as described in Items I, II, and
and (2) to permit each ETF or closed-end fund that III below, which Items have been facility of the Exchange, and do not
is an affiliated person, or an affiliated person of an prepared by the self-regulatory affect the meaning, administration, or
affiliated person, as defined in section 2(a)(3) of the
organization. The Commission is enforcement of any rules of the
Act, of a Fund of Funds, to sell shares to or redeem Exchange or the rights, obligations, or
shares from the Fund of Funds. This includes, in publishing this notice to solicit
the case of sales and redemptions of shares of ETFs, comments on the proposed rule from privileges of Exchange members or their
the in-kind transactions that accompany such sales interested persons. associated persons is any way.
and redemptions. Applicants are not seeking relief Accordingly, this filing is being
from section 17(a) for, and the requested relief will I. Self-Regulatory Organization’s submitted under Rule 19b–4(f)(3). In
amozie on DSK3GDR082PROD with NOTICES1

not apply to, transactions where an ETF, BDC or Statement of the Terms of Substance of
closed-end fund could be deemed an affiliated
lieu of providing a copy of the marked
person, or an affiliated person of an affiliated
the Proposed Rule Change name changes for all corporate
person, of a Fund of Funds because an investment The Exchange proposes to reflect a documents, the Exchange represents
adviser to the ETF, BDC or closed-end fund or an that it will make the necessary non-
entity controlling, controlled by or under common
non-substantive name change in the
control with the investment adviser to the ETF,
substantive revisions described below to
BDC or closed-end fund, is also an investment 1 15 U.S.C. 78s(b)(1). the applicable corporate governance
adviser to the Fund of Funds. 2 17 CFR 240.19b–4. documents and post updated versions of

VerDate Sep<11>2014 17:25 Aug 29, 2018 Jkt 244001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 E:\FR\FM\30AUN1.SGM 30AUN1
Document Created: 2018-08-30 01:20:31
Document Modified: 2018-08-30 01:20:31
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 31, 2017, and amended on May 1, 2018.
Contact		Christine Y. Greenlees, Senior Counsel, at (202) 551-6879, or Andrea Ottomanelli Magovern, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		83 FR 44374