83_FR_54359 83 FR 54151 - Beyond Advisors IC, et al.

83 FR 54151 - Beyond Advisors IC, et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 208 (October 26, 2018)

Page Range54151-54153
FR Document2018-23376

Federal Register, Volume 83 Issue 208 (Friday, October 26, 2018)
[Federal Register Volume 83, Number 208 (Friday, October 26, 2018)]
[Notices]
[Pages 54151-54153]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-23376]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33277; 812-14936]


Beyond Advisors IC, et al.

October 22, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') for an

[[Page 54152]]

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.

Applicants: Beyond Advisors IC (the ``Initial Adviser''), a Jersey 
incorporated cell company that will be registered as an investment 
adviser under the Investment Advisers Act of 1940, ETF Series Solutions 
(the ``Trust''), a Delaware statutory trust registered under the Act as 
an open-end management investment company with multiple series, and 
Quasar Distributors, LLC, a Delaware limited liability company and 
broker-dealer registered under the Securities Exchange Act of 1934 
(``Exchange Act'').

Filing Dates: The application was filed on August 2, 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 November 16, 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, Securities and Exchange Commission, 100 F Street 
NE, Washington, DC 20549-1090; Applicants: Beyond Advisors IC, Digital 
Hub Jersey, Block 3, Ground Floor, Grenville Street, St Helier, Jersey, 
JE2 4UF; ETF Series Solutions, 615 East Michigan Street, Milwaukee, 
Wisconsin 53202; Quasar Distributors, LLC, 777 East Wisconsin Avenue, 
6th Floor, Milwaukee, Wisconsin 53202.

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. 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 Beyond Advisors 
US Vegan Climate ETF (the ``Initial Fund''), a new series of the 
Trust, and any additional series of the Trust, and any other open-
end management investment company or series thereof (``Future 
Funds'' and together with the Initial Fund, ``Funds''), each of 
which will operate as an ETF and will track a specified index 
comprised of domestic and/or foreign equity securities and/or 
domestic and/or foreign fixed income securities (each, an 
``Underlying Index''). Each Fund will (a) be advised by the Initial 
Adviser or an entity controlling, controlled by, or under common 
control with the Initial Adviser (each such entity and any successor 
thereto, an ``Adviser'') and (b) comply with the terms and 
conditions of the application. 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.
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    2. Each Fund will hold investment positions selected to correspond 
generally 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 Trust or a 
Fund, of the 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 website 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 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

[[Page 54153]]

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 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. 2018-23376 Filed 10-25-18; 8:45 am]
 BILLING CODE 8011-01-P



                                                                                      Federal Register / Vol. 83, No. 208 / Friday, October 26, 2018 / Notices                                                                               54151

                                                                                                                                                                                                                                         Estimated
                                                                                                                                                                                                                              Service
                                                                                                         Name of applicant organization                                                                               State              annualized
                                                                                                                                                                                                                               area     2019 funding

                                               Legal Aid Services of Oregon ................................................................................................................................          OR      MOR            535,226
                                               Legal Aid Services of Oregon ................................................................................................................................          OR      NOR–1          202,768
                                               Legal Aid Services of Oregon ................................................................................................................................          OR      OR–6         3,896,236
                                               Philadelphia Legal Assistance Center ....................................................................................................................              PA      MPA            214,797
                                               Philadelphia Legal Assistance Center ....................................................................................................................              PA      PA–1         3,204,335
                                               Southwestern Pennsylvania Legal Services ..........................................................................................................                    PA      PA–11          424,853
                                               Legal Aid of Southeastern Pennsylvania ...............................................................................................................                 PA      PA–23        1,365,547
                                               North Penn Legal Services .....................................................................................................................................        PA      PA–24        2,037,974
                                               MidPenn Legal Services .........................................................................................................................................       PA      PA–25        2,644,519
                                               Northwestern Legal Services ..................................................................................................................................         PA      PA–26          747,015
                                               Laurel Legal Services .............................................................................................................................................    PA      PA–5           684,616
                                               Neighborhood Legal Services Association .............................................................................................................                  PA      PA–8         1,433,575
                                               Puerto Rico Legal Services ....................................................................................................................................        PR      MPR             64,688
                                               Puerto Rico Legal Services ....................................................................................................................................        PR      PR–1        11,818,285
                                               Community Law Office ...........................................................................................................................................       PR      PR–2           215,933
                                               Rhode Island Legal Services ..................................................................................................................................         RI      RI–1           967,489
                                               South Carolina Legal Services ...............................................................................................................................          SC      MSC            155,528
                                               South Carolina Legal Services ...............................................................................................................................          SC      SC–8         6,038,140
                                               Dakota Plains Legal Services .................................................................................................................................         SD      NSD–1        1,025,591
                                               East River Legal Services ......................................................................................................................................       SD      SD–2           430,728
                                               Dakota Plains Legal Services .................................................................................................................................         SD      SD–4           467,961
                                               Legal Aid Society of Middle TN and the Cumberlands ..........................................................................................                          TN      TN–10        3,125,749
                                               Memphis Area Legal Services ................................................................................................................................           TN      TN–4         1,550,924
                                               West Tennessee Legal Services ............................................................................................................................             TN      TN–7           714,802
                                               Legal Aid of East Tennessee .................................................................................................................................          TN      TN–9         2,523,870
                                               Texas RioGrande Legal Aid ...................................................................................................................................          TX      MSX–2        1,943,157
                                               Texas RioGrande Legal Aid ...................................................................................................................................          TX      NTX–1           34,378
                                               Lone Star Legal Aid ................................................................................................................................................   TX      TX–13       12,034,312
                                               Legal Aid of NorthWest Texas ...............................................................................................................................           TX      TX–14        9,145,325
                                               Texas RioGrande Legal Aid ...................................................................................................................................          TX      TX–15       11,501,517
                                               Utah Legal Services ...............................................................................................................................................    UT      MUT             92,972
                                               Utah Legal Services ...............................................................................................................................................    UT      NUT–1           90,366
                                               Utah Legal Services ...............................................................................................................................................    UT      UT–1         2,349,840
                                               Central Virginia Legal Aid Society ..........................................................................................................................          VA      MVA            187,615
                                               Southwest Virginia Legal Aid Society .....................................................................................................................             VA      VA–15          867,059
                                               Legal Aid Society of Eastern Virginia .....................................................................................................................            VA      VA–16        1,570,775
                                               Virginia Legal Aid Society .......................................................................................................................................     VA      VA–17          808,012
                                               Central Virginia Legal Aid Society ..........................................................................................................................          VA      VA–18        1,310,918
                                               Blue Ridge Legal Services .....................................................................................................................................        VA      VA–19          861,283
                                               Legal Services of Northern Virginia ........................................................................................................................           VA      VA–20        1,597,692
                                               Legal Services of the Virgin Islands .......................................................................................................................           VI      VI–1           194,590
                                               Legal Services Law Line of Vermont .....................................................................................................................               VT      VT–1           521,364
                                               Northwest Justice Project .......................................................................................................................................      WA      MWA            707,725
                                               Northwest Justice Project .......................................................................................................................................      WA      NWA–1          312,902
                                               Northwest Justice Project .......................................................................................................................................      WA      WA–1         5,899,908
                                               Legal Action of Wisconsin ......................................................................................................................................       WI      MWI            400,274
                                               Wisconsin Judicare .................................................................................................................................................   WI      NWI–1          170,387
                                               Wisconsin Judicare .................................................................................................................................................   WI      WI–2         1,009,735
                                               Legal Action of Wisconsin ......................................................................................................................................       WI      WI–5         3,858,281
                                               Legal Aid of West Virginia ......................................................................................................................................      WV      WV–5         2,770,204
                                               Legal Aid of Wyoming ............................................................................................................................................      WY      NWY–1          189,810
                                               Legal Aid of Wyoming ............................................................................................................................................      WY      WY–4           527,640



                                                 These grants will be awarded under                                     delivered to LSC within 30 days from                                     SECURITIES AND EXCHANGE
                                               the authority conferred on LSC by                                        the date of publication of this notice.                                  COMMISSION
                                               section 1006(a)(1) of the Legal Services                                   Dated: October 22, 2018.
                                               Corporation Act, 42 U.S.C. 2996e(a)(l).                                                                                                           [Investment Company Act Release No.
                                                                                                                        Stefanie Davis,
                                               Awards will be made so that each                                                                                                                  33277; 812–14936]
                                                                                                                        Assistant General Counsel.
                                               service area is served, although no listed
                                               organization is guaranteed an award.                                     [FR Doc. 2018–23406 Filed 10–25–18; 8:45 am]                             Beyond Advisors IC, et al.
                                               Grants will become effective and grant                                   BILLING CODE 7050–01–P
                                                                                                                                                                                                 October 22, 2018.
khammond on DSK30JT082PROD with NOTICES




                                               funds will be distributed on or about                                                                                                             AGENCY: Securities and Exchange
                                               January 1, 2019.                                                                                                                                  Commission (‘‘Commission’’).
                                                 This notice is issued pursuant to 42                                                                                                            ACTION: Notice.
                                               U.S.C. 2996f(f). Comments and
                                               recommendations concerning potential                                                                                                                Notice of an application for an order
                                               grantees are invited and should be                                                                                                                under section 6(c) of the Investment
                                                                                                                                                                                                 Company Act of 1940 (the ‘‘Act’’) for an


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                                               54152                         Federal Register / Vol. 83, No. 208 / Friday, October 26, 2018 / Notices

                                               exemption from sections 2(a)(32),                       hearing may request notification by                       Underlying Index. In the case of Self-
                                               5(a)(1), 22(d), and 22(e) of the Act and                writing to the Commission’s Secretary.                    Indexing Funds, an affiliated person, as
                                               rule 22c–1 under the Act, under                         ADDRESSES: Secretary, Securities and                      defined in section 2(a)(3) of the Act
                                               sections 6(c) and 17(b) of the Act for an               Exchange Commission, 100 F Street NE,                     (‘‘Affiliated Person’’), or an affiliated
                                               exemption from sections 17(a)(1) and                    Washington, DC 20549–1090;                                person of an Affiliated Person (‘‘Second-
                                               17(a)(2) of the Act, and under section                  Applicants: Beyond Advisors IC, Digital                   Tier Affiliate’’), of the Trust or a Fund,
                                               12(d)(1)(J) for an exemption from                       Hub Jersey, Block 3, Ground Floor,                        of the Adviser, of any sub-adviser to or
                                               sections 12(d)(1)(A) and 12(d)(1)(B) of                 Grenville Street, St Helier, Jersey, JE2                  promoter of a Fund, or of the Distributor
                                               the Act. The requested order would                      4UF; ETF Series Solutions, 615 East                       will compile, create, sponsor or
                                               permit (a) index-based series of certain                Michigan Street, Milwaukee, Wisconsin                     maintain the Underlying Index.2
                                               open-end management investment                          53202; Quasar Distributors, LLC, 777                         3. Shares will be purchased and
                                               companies (‘‘Funds’’) to issue shares                   East Wisconsin Avenue, 6th Floor,                         redeemed in Creation Units and
                                               redeemable in large aggregations only                   Milwaukee, Wisconsin 53202.                               generally on an in-kind basis. Except
                                               (‘‘Creation Units’’); (b) secondary market              FOR FURTHER INFORMATION CONTACT:                          where the purchase or redemption will
                                               transactions in Fund shares to occur at                 Bruce R. MacNeil, Senior Counsel, at                      include cash under the limited
                                               negotiated market prices rather than at                 (202) 551–6817, or Kaitlin C. Bottock,                    circumstances specified in the
                                               net asset value (‘‘NAV’’); (c) certain                  Branch Chief, at (202) 551–6825                           application, purchasers will be required
                                               Funds to pay redemption proceeds,                       (Division of Investment Management,                       to purchase Creation Units by
                                               under certain circumstances, more than                  Chief Counsel’s Office).                                  depositing specified instruments
                                               seven days after the tender of shares for               SUPPLEMENTARY INFORMATION: The                            (‘‘Deposit Instruments’’), and
                                               redemption; (d) certain affiliated                      following is a summary of the                             shareholders redeeming their shares
                                               persons of a Fund to deposit securities                 application. The complete application                     will receive specified instruments
                                               into, and receive securities from, the                  may be obtained via the Commission’s                      (‘‘Redemption Instruments’’). The
                                               Fund in connection with the purchase                    website by searching for the file                         Deposit Instruments and the
                                               and redemption of Creation Units; and                   number, or for an applicant using the                     Redemption Instruments will each
                                               (e) certain registered management                       Company name box, at http://                              correspond pro rata to the positions in
                                               investment companies and unit                           www.sec.gov/search/search.htm or by                       the Fund’s portfolio (including cash
                                               investment trusts outside of the same                   calling (202) 551–8090.                                   positions) except as specified in the
                                               group of investment companies as the                                                                              application.
                                               Funds (‘‘Funds of Funds’’) to acquire                   Summary of the Application
                                                                                                                                                                    4. Because shares will not be
                                               shares of the Funds.                                       1. Applicants request an order that                    individually redeemable, applicants
                                               APPLICANTS:   Beyond Advisors IC (the                   would allow Funds to operate as index                     request an exemption from section
                                               ‘‘Initial Adviser’’), a Jersey incorporated             exchange traded funds (‘‘ETFs’’).1 Fund                   5(a)(1) and section 2(a)(32) of the Act
                                               cell company that will be registered as                 shares will be purchased and redeemed                     that would permit the Funds to register
                                               an investment adviser under the                         at their NAV in Creation Units only. All                  as open-end management investment
                                               Investment Advisers Act of 1940, ETF                    orders to purchase Creation Units and                     companies and issue shares that are
                                               Series Solutions (the ‘‘Trust’’), a                     all redemption requests will be placed                    redeemable in Creation Units only.
                                               Delaware statutory trust registered                     by or through an ‘‘Authorized                                5. Applicants also request an
                                               under the Act as an open-end                            Participant’’, which will have signed a                   exemption from section 22(d) of the Act
                                               management investment company with                      participant agreement with the                            and rule 22c–1 under the Act as
                                               multiple series, and Quasar Distributors,               Distributor. Shares will be listed and                    secondary market trading in shares will
                                               LLC, a Delaware limited liability                       traded individually on a national                         take place at negotiated prices, not at a
                                               company and broker-dealer registered                    securities exchange, where share prices                   current offering price described in a
                                               under the Securities Exchange Act of                    will be based on the current bid/offer                    Fund’s prospectus, and not at a price
                                               1934 (‘‘Exchange Act’’).                                market. Any order granting the                            based on NAV. Applicants state that (a)
                                                                                                       requested relief would be subject to the                  secondary market trading in shares does
                                               FILING DATES:The application was filed                  terms and conditions stated in the
                                               on August 2, 2018.                                                                                                not involve a Fund as a party and will
                                                                                                       application.                                              not result in dilution of an investment
                                               HEARING OR NOTIFICATION OF HEARING:      An                2. Each Fund will hold investment                      in shares, and (b) to the extent different
                                               order granting the requested relief will                positions selected to correspond                          prices exist during a given trading day,
                                               be issued unless the Commission orders                  generally to the performance of an                        or from day to day, such variances occur
                                               a hearing. Interested persons may                                                                                 as a result of third-party market forces,
                                                                                                          1 Applicants request that the order apply to
                                               request a hearing by writing to the                                                                               such as supply and demand. Therefore,
                                                                                                       Beyond Advisors US Vegan Climate ETF (the
                                               Commission’s Secretary and serving                      ‘‘Initial Fund’’), a new series of the Trust, and any     applicants assert that secondary market
                                               applicants with a copy of the request,                  additional series of the Trust, and any other open-       transactions in shares will not lead to
                                               personally or by mail. Hearing requests                 end management investment company or series               discrimination or preferential treatment
                                               should be received by the Commission                    thereof (‘‘Future Funds’’ and together with the
                                                                                                       Initial Fund, ‘‘Funds’’), each of which will operate      among purchasers. Finally, applicants
                                               by 5:30 p.m. on November 16, 2018 and                   as an ETF and will track a specified index                represent that share market prices will
                                               should be accompanied by proof of                       comprised of domestic and/or foreign equity               be disciplined by arbitrage
                                               service on applicants, in the form of an                securities and/or domestic and/or foreign fixed           opportunities, which should prevent
                                               affidavit, or for lawyers, a certificate of             income securities (each, an ‘‘Underlying Index’’).
khammond on DSK30JT082PROD with NOTICES




                                                                                                       Each Fund will (a) be advised by the Initial Adviser
                                               service. Pursuant to rule 0–5 under the                 or an entity controlling, controlled by, or under           2 Each Self-Indexing Fund will post on its website
                                               Act, hearing requests should state the                  common control with the Initial Adviser (each such        the identities and quantities of the investment
                                               nature of the writer’s interest, any facts              entity and any successor thereto, an ‘‘Adviser’’) and     positions that will form the basis for the Fund’s
                                               bearing upon the desirability of a                      (b) comply with the terms and conditions of the           calculation of its NAV at the end of the day.
                                                                                                       application. For purposes of the requested Order,         Applicants believe that requiring Self-Indexing
                                               hearing on the matter, the reason for the               ‘‘successor’’ is limited to an entity that results from   Funds to maintain full portfolio transparency will
                                               request, and the issues contested.                      a reorganization into another jurisdiction or a           help address, together with other protections,
                                               Persons who wish to be notified of a                    change in the type of business organization.              conflicts of interest with respect to such Funds.



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                                                                              Federal Register / Vol. 83, No. 208 / Friday, October 26, 2018 / Notices                                                  54153

                                               shares from trading at a material                        The purchase of Creation Units by a                   to Section 19(b)(1) of the Securities
                                               discount or premium from NAV.                            Fund of Funds directly from a Fund will               Exchange Act of 1934 (‘‘Act’’) 1 and Rule
                                                  6. With respect to Funds that effect                  be accomplished in accordance with the                19b–4 thereunder,2 a proposed rule
                                               creations and redemptions of Creation                    policies of the Fund of Funds and will                change to continue listing and trading
                                               Units in kind and that are based on                      be based on the NAVs of the Funds.                    shares of the Natixis Loomis Sayles
                                               certain Underlying Indexes that include                     9. Section 6(c) of the Act permits the             Short Duration Income ETF under NYSE
                                               foreign securities, applicants request                   Commission to exempt any persons or                   Arca Rule 8.600–E, Managed Fund
                                               relief from the requirement imposed by                   transactions from any provision of the                Shares.3 The proposed rule change was
                                               section 22(e) in order to allow such                     Act if such exemption is necessary or                 published for comment in the Federal
                                               Funds to pay redemption proceeds                         appropriate in the public interest and                Register on May 3, 2018.4 On June 5,
                                               within fifteen calendar days following                   consistent with the protection of                     2018, pursuant to Section 19(b)(2) of the
                                               the tender of Creation Units for                         investors and the purposes fairly                     Act,5 the Commission designated
                                               redemption. Applicants assert that the                   intended by the policy and provisions of              August 1, 2018 as the date by which to
                                               requested relief would not be                            the Act. Section 12(d)(1)(J) of the Act               approve the proposed rule change,
                                               inconsistent with the spirit and intent of               provides that the Commission may                      disapprove the proposed rule change, or
                                               section 22(e) to prevent unreasonable,                   exempt any person, security, or                       institute proceedings to determine
                                               undisclosed or unforeseen delays in the                  transaction, or any class or classes of               whether to disapprove the proposed
                                               actual payment of redemption proceeds.                   persons, securities, or transactions, from            rule change.6 On June 6, 2018, the
                                                  7. Applicants request an exemption to                 any provision of section 12(d)(1) if the              Exchange filed Amendment No. 1 to the
                                               permit Funds of Funds to acquire Fund                    exemption is consistent with the public               proposed rule change.7 On July 27,
                                               shares beyond the limits of section                      interest and the protection of investors.             2018, the Commission instituted
                                               12(d)(1)(A) of the Act; and the Funds,                   Section 17(b) of the Act authorizes the               proceedings to determine whether to
                                               and any principal underwriter for the                    Commission to grant an order                          approve or disapprove the proposed
                                               Funds, and/or any broker or dealer                       permitting a transaction otherwise                    rule change.8 The Commission has
                                               registered under the Exchange Act, to                    prohibited by section 17(a) if it finds               received no comments on the proposed
                                               sell shares to Funds of Funds beyond                     that (a) the terms of the proposed                    rule change.
                                               the limits of section 12(d)(1)(B) of the                 transaction are fair and reasonable and                 Section 19(b)(2) of the Act 9 provides
                                               Act. The application’s terms and                         do not involve overreaching on the part               that, after initiating disapproval
                                               conditions are designed to, among other                  of any person concerned; (b) the                      proceedings, the Commission shall issue
                                               things, help prevent any potential (i)                   proposed transaction is consistent with               an order approving or disapproving the
                                               undue influence over a Fund through                      the policies of each registered                       proposed rule change not later than 180
                                               control or voting power, or in                           investment company involved; and (c)                  days after the date of publication of
                                               connection with certain services,                        the proposed transaction is consistent                notice of filing of the proposed rule
                                               transactions, and underwritings, (ii)                    with the general purposes of the Act.                 change. The Commission may extend
                                               excessive layering of fees, and (iii)                                                                          the period for issuing an order
                                               overly complex fund structures, which                      For the Commission, by the Division of
                                                                                                        Investment Management, under delegated                approving or disapproving the proposed
                                               are the concerns underlying the limits                   authority.                                            rule change, however, by not more than
                                               in sections 12(d)(1)(A) and (B) of the                                                                         60 days if the Commission determines
                                                                                                        Eduardo A. Aleman,
                                               Act.                                                                                                           that a longer period is appropriate and
                                                  8. Applicants request an exemption                    Assistant Secretary.
                                                                                                                                                              publishes the reasons for such
                                               from sections 17(a)(1) and 17(a)(2) of the               [FR Doc. 2018–23376 Filed 10–25–18; 8:45 am]
                                                                                                                                                              determination. The proposed rule
                                               Act to permit persons that are Affiliated                BILLING CODE 8011–01–P
                                                                                                                                                              change was published for notice and
                                               Persons, or Second-Tier Affiliates, of the                                                                     comment in the Federal Register on
                                               Funds, solely by virtue of certain                                                                             May 3, 2018. October 30, 2018 is 180
                                               ownership interests, to effectuate                       SECURITIES AND EXCHANGE
                                                                                                        COMMISSION                                            days from that date, and December 29,
                                               purchases and redemptions in-kind. The                                                                         2018 is 240 days from that date.
                                               deposit procedures for in-kind                           [Release No. 34–84462; File No. SR–                     The Commission finds it appropriate
                                               purchases of Creation Units and the                      NYSEArca–2018–25]                                     to designate a longer period within
                                               redemption procedures for in-kind                                                                              which to issue an order approving or
                                               redemptions of Creation Units will be                    Self-Regulatory Organizations; NYSE
                                               the same for all purchases and                           Arca, Inc.; Notice of Designation of a                  1 15  U.S.C. 78s(b)(1).
                                               redemptions and Deposit Instruments                      Longer Period for Commission Action                     2 17  CFR 240.19b–4.
                                               and Redemption Instruments will be                       on Proceedings To Determine Whether                      3 Currently, the Exchange lists and trades the

                                               valued in the same manner as those                       To Approve or Disapprove a Proposed                   shares pursuant to NYSE Arca Rule 8.600–E. As
                                                                                                        Rule Change, as Modified by                           discussed in Amendment No. 1, infra note 7, the
                                               investment positions currently held by                                                                         Exchange submitted this proposed rule change to
                                               the Funds. Applicants also seek relief                   Amendment No. 1, Regarding the                        permit the fund’s portfolio to deviate from two of
                                               from the prohibitions on affiliated                      Continued Listing and Trading of                      the ‘‘generic’’ listing requirements applicable to
                                               transactions in section 17(a) to permit a                Shares of the Natixis Loomis Sayles                   Managed Fund Shares.
                                                                                                                                                                 4 See Securities Exchange Act Release No. 83122
                                               Fund to sell its shares to and redeem its                Short Duration Income ETF
                                                                                                                                                              (April 27, 2018), 83 FR 19578.
                                               shares from a Fund of Funds, and to                      October 22, 2018.                                        5 15 U.S.C. 78s(b)(2).
                                               engage in the accompanying in-kind                          On April 16, 2018, NYSE Arca, Inc.                    6 See Securities Exchange Act Release No. 83385,
khammond on DSK30JT082PROD with NOTICES




                                               transactions with the Fund of Funds.3                    (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed                 83 FR 27034 (June 11, 2018).
                                                                                                                                                                 7 Amendment No. 1, which amended and

                                                 3 The requested relief would apply to direct sales
                                                                                                        with the Securities and Exchange                      replaced the proposed rule change in its entirety,
                                               of shares in Creation Units by a Fund to a Fund of       Commission (‘‘Commission’’), pursuant                 is available at: https://www.sec.gov/comments/sr-
                                               Funds and redemptions of those shares. Applicants                                                              nysearca-2018-25/nysearca201825-3795048-
                                               are not seeking relief from section 17(a) for, and the   Funds because an Adviser or an entity controlling,    162717.pdf.
                                                                                                                                                                 8 See Securities Exchange Act Release No. 83733,
                                               requested relief will not apply to, transactions         controlled by or under common control with an
                                               where a Fund could be deemed an Affiliated               Adviser provides investment advisory services to      83 FR 37831 (August 2, 2018).
                                               Person, or a Second-Tier Affiliate, of a Fund of         that Fund of Funds.                                      9 15 U.S.C. 78s(b)(2).




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Document Created: 2018-10-26 02:27:47
Document Modified: 2018-10-26 02:27:47
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 2, 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 54151 

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