[Federal Register Volume 78, Number 99 (Wednesday, May 22, 2013)]
[Notices]
[Pages 30371-30372]
[FR Doc No: 2013-12164]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69594; File No. SR-CBOE-2013-051]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule

May 16, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 8, 2013, Chicago Board Options Exchange, Incorporated (the
``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Fees Schedule. The text of the
proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's
Office of the Secretary, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Footnote 13 of the Exchange Fees Schedule places caps on
transaction fees for transactions involving a number of different
trading strategies, and states that, to qualify transactions for such
caps, a rebate request with supporting documentation must be submitted
to the Exchange within 3 business days of the transactions.\3\ Footnote
6 of the Exchange Fees Schedule states that the Marketing Fee will not
apply to transactions resulting from any of the strategies identified
and/or defined in Footnote 13. However, Footnote 6 does not explicitly
state that, in order for a strategy transaction identified/defined in
Footnote 13 to gain exemption from being assessed the Marketing Fee, a
rebate request must be submitted. Without the submission of such a
request, the Exchange is unable to identify that a transaction involved
one of the strategies, and therefore is unable to apply the caps
described in Footnote 13 or exempt the transaction from the Marketing
Fee pursuant to Footnote 6. These requests are submitted under Footnote
13, though, and when such requests are submitted, the Exchange also
uses such requests to determine a strategy transaction's exemption from
the Marketing Fee (pursuant to Footnote 6). However, to clarify that
such requests must be submitted in order to gain such exemption, the
Exchange proposes to amend Footnote 6 to state that the Marketing Fee
will not apply to transactions resulting from any of the strategies
identified and/or defined in Footnote 13 of the Fees Schedule (provided
that a rebate request with supporting documentation is submitted to the
Exchange within 3 business days of the transaction).
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    \3\ See Footnote 13 for further descriptions of these caps, as
well as the list and definitions of the qualifying strategies.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\4\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \5\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitation transactions in securities, to remove impediments to and
perfect the mechanism of a free and

open market and a national market system, and, in general, to protect
investors and the public interest. Clarifying the manner in which the
Marketing Fee exemption for strategy transactions can be accomplished
will eliminate any confusion and provide a clear procedure for
applicants to get such an exemption for their strategy transactions,
thereby removing impediments to and perfecting the mechanism of a free
and open market.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that the proposed rule change will impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because the proposed change does not change to whom
the Marketing Fee exemption for strategy executions applies; it merely
states the manner for those executing such transactions to receive the
exemption. The Exchange does not believe that the proposed rule change
will impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act because the
proposed change because only applies to trading on CBOE and does not
amend any fees, or to whom such fees apply. To the extent that the more
clear explanation of the manner by which a market participant executing
a strategy transaction may apply for such transaction's exemption from
the Marketing Fee may be attractive to market participants on other
exchanges, such market participants may elect to become market
participants on CBOE.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \6\ and paragraph (f) of Rule 19b-4 \7\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2013-051 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2013-051. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CBOE-2013-051 and should be
submitted on or before June 12, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-12164 Filed 5-21-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 122 (Tuesday, June 27, 2023)]
[Notices]
[Pages 41712-41713]
[FR Doc No: 2023-13644]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2010-0051]

Caltrain's Request for Approval To Begin Field Testing on Its
Positive Train Control Network

AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).

ACTION: Notice of availability and request for comments.

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SUMMARY: This document provides the public with notice that, on June
14, 2023, Caltrain (PCMZ) submitted a request to field test its Stadler
KISS Electric Multiple Units (EMUs) that have been equipped with PCMZ's
Interoperable Electronic Train Management System (I-ETMS) technology.
FRA is publishing this notice and inviting public comment on PCMZ's
request to test its positive train control (PTC) system.

DATES: FRA will consider comments received by July 19, 2023. FRA may
consider comments received after that date to the extent practicable
and without delaying implementation of valuable or necessary
modifications to a PTC system.

ADDRESSES:
    Comments: Comments may be submitted by going to https://www.regulations.gov and following the online instructions for
submitting comments.
    Instructions: All submissions must include the agency name and the
applicable docket number. The relevant PTC docket number for this host
railroad is Docket No. FRA-2010-0051. For convenience, all active PTC
dockets are hyperlinked on FRA's website at https://railroads.dot.gov/research-development/program-areas/train-control/ptc/railroads-ptc-dockets. All comments received will be posted without change to https://www.regulations.gov; this includes any personal information.

FOR FURTHER INFORMATION CONTACT: Gabe Neal, Staff Director, Signal,
Train Control, and Crossings Division, telephone:<PHONE_NUMBER>, email:
[email protected].

SUPPLEMENTARY INFORMATION: In general, Title 49 United States Code
(U.S.C.) Section 20157(h) requires FRA to certify that a host
railroad's PTC system complies with Title 49 Code of Federal
Regulations (CFR) part 236, subpart I, before the technology may be
operated in revenue service. On December 17, 2020, FRA certified PCMZ's
I-ETMS PTC system under 49 CFR 236.1015 and 49 U.S.C. 20157(h).
Pursuant to 49 CFR 236.1035, a railroad must obtain FRA's approval
before field testing an uncertified PTC system, or a product of an
uncertified PTC system, or any regression testing of a certified PTC
system on the general rail system. See 49 CFR 236.1035(a). PCMZ's test
request, including a complete description of PCMZ's Concept of
Operations and its specific test procedures, including the measures
that will be taken to ensure safety during testing, are available for
review online at https://www.regulations.gov in Docket No. FRA-2010-
0051.
    Interested parties are invited to comment on PCMZ's Test Request by
submitting written comments or data. During its review of the test
request, FRA will consider any comments or data submitted within the
timeline specified in this notice and to the extent practicable,
without delaying testing of valuable or necessary modifications to a
PTC system. See 49 CFR 236.1035. FRA, however, may elect not to respond
to any particular comment, and, under 49 CFR 236.1035, FRA maintains
the authority to approve, approve with conditions, or deny the test
request at its sole discretion.

Privacy Act Notice

    In accordance with 49 CFR 211.3, FRA solicits comments from the
public to better inform its decisions. DOT posts these comments,
without edit, including any personal information the commenter
provides, to https://www.regulations.gov, as described in the system of
records notice (DOT/ALL-14 FDMS), which can be reviewed at https://www.transportation.gov/privacy. See https://www.regulations.gov/privacy-notice for the privacy notice of regulations.gov. To facilitate
comment tracking, we encourage commenters to provide their name, or the
name of their organization; however, submission of names is completely
optional. If you wish to provide comments containing proprietary or
confidential information, please contact FRA for alternate submission
instructions.

    Issued in Washington, DC.
Carolyn R. Hayward-Williams,
Director, Office of Railroad Systems and Technology.
[FR Doc. 2023-13644 Filed 6-26-23; 8:45 am]
BILLING CODE 4910-06-P


[Federal Register: May 12, 2006 (Volume 71, Number 92)]
[Notices]
[Page 27746-27750]
[DOCID:fr12my06-108]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-27315; 812-13167]

Phoenix Life Insurance Company, et al.; Notice of Application

May 8, 2006.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under section 12(d)(1)(J) of
the Investment Company Act of 1940 (``Act'') for an exemption from
sections 12(d)(1)(A) and (B) of the Act and under sections 6(c) and
17(b) of the Act for an exemption from section 17(a) of the Act.

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Summary of Application: The order would permit certain registered open-
end management investment companies to acquire shares of other
registered open-end management investment companies and unit investment
trusts (``UITs'') both within and outside the same group of investment
companies.

Applicants: (a) Phoenix Life Insurance Company (``Phoenix''), PHL
Variable Insurance Company (``PHL Variable'') and Phoenix Life and
Annuity Company (``PLAC,'' and together with Phoenix, PHL Variable and
any insurance company controlling, controlled by or under common
control with Phoenix, PHL Variable or PLAC, the ``Insurance
Companies''); (b) Phoenix Edge Series Fund (the ``Insurance-Dedicated
Fund''), including the currently existing series and all future series
thereof; (c) Phoenix Pholios (the ``Retail Fund,'' and together with
the Insurance-Dedicated Fund, the ``Phoenix Funds'') including the
currently existing series and all future series thereof; (d) any
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
Phoenix Funds, and are, or will be, advised by either Phoenix
Investment Counsel, Inc. or Phoenix Variable Advisors, Inc.
(collectively, the ``Manager'') \1\ or any entity controlling,
controlled by or under common control with the Manager (included in the
term, ``Phoenix Funds''); and (e) the Manager.\2\
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    \1\ The Manager, together with any existing or future entity
controlling, controlled by or under common control with the Manager
are referred to collectively as the ``Manager.''
    \2\ All entities that currently intend to rely on the requested
order are named as applicants. Any other entity that relies on the
order in the future will comply with the terms and conditions of the
application.

DATES: Filing Dates: The application was filed on February 14, 2005 and
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amended on January 6, 2006 and May 1, 2006.

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. June 2, 2006, and should be accompanied by proof of service on
applicants, in the form of an affidavit, or for lawyers, a certificate
of service. Hearing requests should state the nature of the writer's
interest, 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, Phoenix, PHL
Variable, PLAC, and Phoenix Variable Advisors, Inc., One American Row,
Hartford, CT 06102; the Retail Fund and the Insurance-Dedicated Fund,
101 Munson Street, Greenfield, MA 01301; Phoenix Investment Counsel,
Inc., 56 Prospect Street, Hartford, CT 06115.

FOR FURTHER INFORMATION CONTACT: John Yoder, Senior Counsel, at (202)
551-6878, or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER> (Division
of Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Public Reference Desk, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington DC 20549-0102 (telephone<PHONE_NUMBER>).

Applicants' Representations

    1. Phoenix is a New York life insurance company and an indirect
wholly-owned subsidiary of The Phoenix Companies, Inc. (``The Phoenix
Companies''), a publicly traded Delaware corporation. PHL Variable is a
Connecticut life insurance company and an indirect wholly-owned
subsidiary of

Phoenix. PLAC is a Connecticut life insurance company and an indirect
wholly-owned subsidiary of The Phoenix Companies. The Insurance
Companies issue group and individual variable annuity contracts and
variable life insurance policies (collectively, the ``Contracts'') that
offer opportunities to invest in the Insurance-Dedicated Fund through
separate accounts registered under the Act (``Registered Separate
Accounts'') and separate accounts exempt from registration under the
Act (``Unregistered Separate Accounts,'' and together with the
Registered Separate Accounts, the ``Separate Accounts'').
    2. The Insurance-Dedicated Fund is a Massachusetts business trust
registered under the Act as an open-end management investment company.
The Retail Fund is a Delaware statutory trust registered under the Act
as a diversified open-end management investment company. The Insurance-
Dedicated Fund and the Retail Fund currently offer 26 and 7 series,
respectively (each series is referred to as a ``Fund,'' and
collectively, as ``Funds''). Except for organizational seed capital for
certain of the Funds invested by the Manager or an affiliate, shares of
the Insurance-Dedicated Fund are sold exclusively to the Insurance
Companies on behalf of their Separate Accounts to fund benefits under
the Contracts. Shares of the Insurance-Dedicated Fund may also be
offered in the future to unaffiliated insurance companies to fund
benefits under variable annuity contracts and variable life insurance
policies issued by the unaffiliated insurance companies, and directly
to certain qualified pension and profit sharing plans pursuant to an
order granted by the Commission.\3\ Shares of the Retail Fund are sold
directly to the public.
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    \3\ The Phoenix Edge Series Fund, Investment Company Act Release
Nos. 25687 (July 26, 2002) (notice) and 25703 (August 20, 2002)
(order).
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    3. The Manager is an affiliated person of the Insurance Companies
and is registered under the Investment Advisers Act of 1940. The
Manager serves as investment adviser to the Funds.
    4. Applicants request relief to permit certain Funds (each a ``Fund
of Funds'') to invest in: (a) Other Funds in the same group of
investment companies as the Fund of Funds (``Affiliated Funds''), and/
or (b) registered open-end management investment companies and UITs
that are not part of the same group of investment companies as the Fund
of Funds (``Unaffiliated Funds,'' and together with the Affiliated
Funds, the ``Underlying Funds''). The Unaffiliated Funds may include
UITs (``Unaffiliated Underlying Trusts'') and open-end management
investment companies registered under the Act (``Unaffiliated
Underlying Funds''). Certain of the Unaffiliated Funds may be
``exchange-traded funds'' that are registered under the Act as UITs or
open-end management investment companies and have received exemptive
relief to sell their shares on a national securities exchange at
negotiated prices (``ETFs''). Each Fund of Funds may also make
investments in government securities, domestic and foreign common and
preferred stock, fixed income securities, futures transactions, options
on the foregoing and in other securities that are not issued by
registered investment companies and which are consistent with its
investment objective, including money market instruments (the ``Other
Securities''). Applicants state that the requested relief will provide
an efficient and simple method of allowing investors to create a
comprehensive asset allocation program.

Applicants' Legal Analysis

A. Section 12(d)(1)

    1. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring shares of an investment company if the
securities represent more than 3% of the total outstanding voting stock
of the acquired company, more than 5% of the total assets of the
acquiring company, or, together with the securities of any other
investment companies, more than 10% of the total assets of the
acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter and
any broker or dealer from selling the shares of the investment company
to another investment company if the sale will cause the acquiring
company to own more than 3% of the acquired company's voting stock, or
if the sale will cause more than 10% of the acquired company's voting
stock to be owned by investment companies generally.
    2. Section 12(d)(1)(G) provides, in relevant part, that section
12(d)(1) will not apply to securities of a registered open-end
investment company or registered UIT if the acquired company and the
acquiring company are part of the same group of investment companies,
provided that certain other requirements contained in section
12(d)(1)(G) are met. Applicants state that, while the Funds of Funds
currently rely on section 12(d)(1)(G) with respect to their investments
in Affiliated Funds, if the Funds of Funds wish to invest in
Unaffiliated Funds and Other Securities in addition to Affiliated
Funds, they cannot then rely on section 12(d)(1)(G).
    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. Applicants seek an exemption under section
12(d)(1)(J) to permit the Funds of Funds to acquire shares of
Affiliated and Unaffiliated Funds and to permit the Affiliated and
Unaffiliated Funds, their principal underwriters and any broker or
dealer to sell shares to the Funds of Funds beyond the limits set forth
in sections 12(d)(1)(A) and (B) of the Act.
    4. Applicants state that the proposed arrangement will not give
rise to the policy concerns underlying sections 12(d)(1)(A) and (B),
which include concerns about undue influence by a fund of funds over
underlying funds, excessive layering of fees, and overly complex fund
structures. Accordingly, applicants believe that the requested
exemption is consistent with the public interest and the protection of
investors.
    5. Applicants state that the proposed arrangement will not result
in undue influence by a Fund of Funds or its affiliated persons over
the Unaffiliated Funds. To limit the control that a Fund of Funds may
have over an Unaffiliated Fund, applicants propose a condition
prohibiting: (a) The Manager and any person controlling, controlled by
or under common control with the Manager, and any investment company
and any issuer that would be an investment company but for section
3(c)(1) or section 3(c)(7) of the Act advised or sponsored by the
Manager or any person controlling, controlled by or under common
control with the Manager (collectively, the ``Group''), and (b) any
investment adviser within the meaning of section 2(a)(20)(B) of the Act
(``Sub-Adviser'') to a Fund of Funds, any person controlling,
controlled by or under common control with the Sub-Adviser, and any
investment company or issuer that would be an investment company but
for section 3(c)(1) or 3(c)(7) of the Act (or portion of such
investment company or issuer) advised by the Sub-Adviser or any person
controlling, controlled by or under common control with the Sub-Adviser
(collectively, the ``Sub-Adviser Group'') from controlling an
Unaffiliated Fund within the meaning of section 2(a)(9) of the Act.
    6. Applicants also propose conditions to preclude a Fund of Funds
and its affiliated entities from taking advantage

of an Unaffiliated Fund. Under condition 2, no consideration will be
received by a Fund of Funds or its Manager, Sub-Adviser, promoter,
principal underwriter and any person controlling, controlled by or
under common control with any of these entities (each, a ``Fund of
Funds Affiliate'') from an Unaffiliated Fund or its investment
adviser(s), sponsor, promoter, principal underwriter and any person
controlling, controlled by or under common control with any of these
entities (each, an ``Unaffiliated Fund Affiliate'') in connection with
any services, transactions or the investment by the Fund of Funds in
the Unaffiliated Fund. Condition 3 precludes a Fund of Funds and Fund
of Funds Affiliate (except to the extent it is acting in its capacity
as an investment adviser to an Unaffiliated Underlying Fund or sponsor
to an Unaffiliated Underlying Trust) from causing an Unaffiliated Fund
to purchase a security in an offering of securities during the
existence of any underwriting or selling syndicate of which a principal
underwriter is an officer, director, member of an advisory board,
Manager, Sub-Adviser, or employee of the Fund of Funds, or a person of
which any such officer, director, member of an advisory board, Manager,
Sub-Adviser, or employee is an affiliated person (each, an
``Underwriting Affiliate,'' except any person whose relationship to the
Unaffiliated Fund is covered by section 10(f) of the Act is not an
Underwriting Affiliate). An offering of securities during the existence
of any underwriting or selling syndicate of which a principal
underwriter is an Underwriting Affiliate is an ``Affiliated
Underwriting.''
    7. As an additional assurance that an Unaffiliated Underlying Fund
understands the implications of an investment by a Fund of Funds under
the requested order, prior to a Fund of Funds' investment in an
Unaffiliated Underlying Fund in excess of the limit in section
12(d)(1)(A)(i), condition 6 requires that the Fund of Funds and
Unaffiliated Underlying Fund execute an agreement stating, without
limitation, that their boards of directors or trustees and their
investment advisers understand the terms and conditions of the order
and agree to fulfill their responsibilities under the order. Applicants
note that an Unaffiliated Fund (other than an ETF whose shares are
purchased by a Fund of Funds in the secondary market) will retain the
right to reject an investment by a Fund of Funds.\4\
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    \4\ An Unaffiliated Fund, including an ETF, would retain its
right to reject any initial investment by a Fund of Funds in excess
of the limit in section 12(d)(1)(A)(i) of the Act by declining to
execute the agreement with the Fund of Funds.
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    8. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. With respect to investment advisory
fees, applicants state that, prior to reliance on the requested order
and subsequently in connection with the approval of any investment
advisory contract under section 15 of the Act, the board of directors
or trustees (``Board'') of each Fund of Funds, including a majority of
the directors or trustees who are not ``interested persons,'' as
defined in section 2(a)(19) of the Act (``Disinterested Trustees''),
will find that the investment advisory fees charged under a Fund of
Fund's investment advisory contract(s) are based on services provided
that are in addition to, rather than duplicative of, services provided
pursuant to any Affiliated Fund's and Unaffiliated Underlying Fund's
advisory contract(s).
    9. Applicants state that the proposed arrangement will not create
an overly complex fund structure. Applicants note that an Underlying
Fund will be prohibited from acquiring securities of any investment
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in
excess of the limits contained in section 12(d)(1)(A), except to the
extent that such Underlying Fund: (a) Receives securities of another
investment company as a dividend or as a result of a plan of
reorganization of a company (other than a plan devised for the purpose
of evading section 12(d)(1) of the Act); or (b) acquires (or is deemed
to have acquired) securities of another investment company pursuant to
exemptive relief from the Commission permitting such Underlying Fund
to: (i) Acquire securities of one or more affiliated investment
companies for short-term cash management purposes, or (ii) engage in
interfund borrowing and lending transactions. Applicants also represent
that a Fund of Funds' prospectus and sales literature will contain
concise, ``plain English'' disclosure designed to inform investors of
the unique characteristics of the proposed Fund of Funds structure,
including, but not limited to, its expense structure and the additional
expenses of investing in Underlying Funds.

B. Section 17(a)

    6. Section 17(a) of the Act generally prohibits sales or purchases
of securities between a registered investment company and any
affiliated person of the company. Section 2(a)(3) of the Act defines an
``affiliated person'' of another person to include (a) Any person
directly or indirectly owning, controlling, or holding with power to
vote, 5% or more of the outstanding voting securities of the other
person; (b) any person 5% or more of whose outstanding voting
securities are directly or indirectly owned, controlled, or held with
power to vote by the other person; and (c) any person directly or
indirectly controlling, controlled by, or under common control with the
other person.
    7. Applicants state that the Funds of Funds and the Affiliated
Funds might be deemed to be under common control of the Manager and
therefore affiliated persons of one another. Applicants also state that
the Funds of Funds and the Underlying Funds might be deemed to be
affiliated persons of one another if a Fund of Funds acquires 5% or
more of an Underlying Fund's outstanding voting securities. In light of
these possible affiliations, section 17(a) could prevent an Underlying
Fund from selling shares to and redeeming shares from a Fund of Funds.
    8. 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 person 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.
    9. Applicants submit that the proposed arrangement satisfies the
standards for relief under sections 17(b) and 6(c) of the Act.
Applicants state that the terms of the arrangement are fair and
reasonable and do not involve overreaching. Applicants note that the
terms upon which an Underlying Fund will sell its shares to or purchase
its shares from a Fund of Funds will be based on the net asset value of
each Underlying Fund.\5\ Applicants state that

the proposed arrangement will be consistent with the policies of each
Fund of Funds and Underlying Fund, and with the general purposes of the
Act.
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    \5\ Applicants note that a Fund of Funds generally would
purchase and sell shares of an Underlying Fund that operates as an
ETF through secondary market transactions at market prices rather
than through principal transactions with the Underlying Fund at net
asset value. Applicants would not rely on the requested relief from
section 17(a) for such secondary market transactions.
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Applicants' Conditions

    Applicants agree that the order granting the requested relief shall
be subject to the following conditions:
    1. The members of the Group will not control (individually or in
the aggregate) an Unaffiliated Fund within the meaning of section
2(a)(9) of the Act. The members of the Sub-Adviser Group will not
control (individually or in the aggregate) an Unaffiliated Fund within
the meaning of section 2(a)(9) of the Act. If, as a result of a
decrease in the outstanding voting securities of an Unaffiliated Fund,
the Group or the Sub-Adviser Group, each in the aggregate, becomes a
holder of more than 25% of the outstanding voting securities of the
Unaffiliated Fund, it (except for any member of the Group or the Sub-
Adviser Group that is a Separate Account) will vote its shares of the
Unaffiliated Fund in the same proportion as the vote of all other
holders of the Unaffiliated Fund's shares. A Registered Separate
Account will seek voting instructions from its Contract holders and
will vote its shares of an Unaffiliated Fund in accordance with the
instructions received and will vote those shares for which no
instructions were received in the same proportion as the shares for
which instructions were received. An Unregistered Separate Account will
either: (i) Vote its shares of the Unaffiliated Fund in the same
proportion as the vote of all other holders of the Unaffiliated Fund's
shares; or (ii) seek voting instructions from its Contract holders and
vote its shares in accordance with the instructions received and vote
those shares for which no instructions were received in the same
proportion as the shares for which instructions were received. This
condition will not apply to the Sub-Adviser Group with respect to an
Unaffiliated Fund for which the Sub-Adviser or a person controlling,
controlled by, or under common control with the Sub-Adviser acts as the
investment adviser within the meaning section 2(a)(20)(A) of the Act
(in the case of an Unaffiliated Underlying Fund) or as the sponsor (in
the case of an Unaffiliated Underlying Trust).
    2. No consideration will be received by a Fund of Funds or a Fund
of Funds Affiliate from an Unaffiliated Fund or an Unaffiliated Fund
Affiliate in connection with any services, transactions or the
investment by the Fund of Funds in the Unaffiliated Fund.
    3. No Fund of Funds or Fund of Funds Affiliate (except to the
extent it is acting in its capacity as an investment adviser to an
Unaffiliated Underlying Fund or sponsor to an Unaffiliated Underlying
Trust) will cause an Unaffiliated Fund to purchase a security in any
Affiliated Underwriting.
    4. The Board of an Unaffiliated Underlying Fund, including a
majority of the Disinterested Trustees, will adopt procedures
reasonably designed to monitor any purchases of securities by the
Unaffiliated Underlying Fund in an Affiliated Underwriting, once an
investment by a Fund of Funds in the securities of the Unaffiliated
Underlying Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act,
including any purchases made directly from an Underwriting Affiliate.
The Board of the Unaffiliated Underlying Fund will review these
purchases periodically, but no less frequently than annually, to
determine whether the purchases were influenced by the investment by
the Fund of Funds in the Unaffiliated Underlying Fund. The Board of the
Unaffiliated Underlying Fund will consider, among other things: (a)
Whether the purchases were consistent with the investment objectives
and policies of the Unaffiliated Underlying Fund; (b) how the
performance of securities purchased in an Affiliated Underwriting
compares to the performance of comparable securities purchased during a
comparable period of time in underwritings other than Affiliated
Underwritings or to a benchmark such as a comparable market index; and
(c) whether the amount of securities purchased by the Unaffiliated
Underlying Fund in Affiliated Underwritings and the amount purchased
directly from an Underwriting Affiliate have changed significantly from
prior years. The Board of the Unaffiliated Underlying Fund will take
any appropriate actions based on its review, including, if appropriate,
the institution of procedures designed to assure that purchases of
securities in Affiliated Underwritings are in the best interests of
shareholders.
    5. Each Unaffiliated Underlying Fund will maintain and preserve
permanently in an easily accessible place a written copy of the
procedures described in the preceding condition, and any modifications
to such procedures, and will maintain and preserve for a period of not
less than six years from the end of the fiscal year in which any
purchase from an Affiliated Underwriting occurred, the first two years
in an easily accessible place, a written record of each purchase of
securities in an Affiliated Underwriting once an investment by a Fund
of Funds in the securities of an Unaffiliated Underlying Fund exceeds
the limit of section 12(d)(1)(A)(i) of the Act, setting forth from whom
the securities were acquired, the identity of the underwriting
syndicate's members, the terms of the purchase, and the information or
materials upon which the determinations of the Board of the
Unaffiliated Underlying Fund were made.
    6. Prior to its investment in shares of an Unaffiliated Underlying
Fund in excess of the limit in section 12(d)(1)(A)(i) of the Act, the
Fund of Funds and the Unaffiliated Underlying Fund will execute an
agreement stating, without limitation, that their boards of directors
or trustees and their investment advisers understand the terms and
conditions of the order and agree to fulfill their responsibilities
under the order (``Participation Agreement''). At the time of its
investment in shares of an Unaffiliated Underlying Fund in excess of
the limit in section 12(d)(1)(A)(i), a Fund of Funds will notify the
Unaffiliated Underlying Fund of the investment. At such time, the Fund
of Funds will also transmit to the Unaffiliated Underlying Fund a list
of the names of each Fund of Funds Affiliate and Underwriting
Affiliate. The Fund of Funds will notify the Unaffiliated Underlying
Fund of any changes to the list as soon as reasonably practicable after
a change occurs. The Unaffiliated Underlying Fund and the Fund of Funds
will maintain and preserve a copy of the order, the Participation
Agreement, and the list with any updated information for the duration
of the investment and for a period of not less than six years
thereafter, the first two years in an easily accessible place.
    7. Before approving any advisory contract under section 15 of the
Act, the Board of each Fund of Funds, including a majority of the
Disinterested Trustees, shall find that the advisory fees charged under
the advisory contract are based on services provided that are in
addition to, rather than duplicative of, services provided under the
advisory contract(s) of any Underlying Fund in which the Fund of Funds
may invest. Such finding, and the basis upon which the finding was
made, will be recorded fully

in the minute books of the appropriate Fund of Funds.
    8. With respect to Registered Separate Accounts that invest in a
Fund of Funds, no sales load will be charged at the Fund of Funds level
or at the Underlying Fund level. Other sales charges and service fees,
as defined in NASD Conduct Rule 2830, if any, will only be charged at
the Fund of Funds level or at the Underlying Fund level, not both. With
respect to other investments in a Fund of Funds, any sales charges and/
or service fees charged with respect to shares of a Fund of Funds will
not exceed the limits applicable to funds of funds set forth in NASD
Conduct Rule 2830.
    9. No Underlying Fund will acquire securities of any other
investment company or company relying on section 3(c)(1) or 3(c)(7) of
the Act in excess of the limits contained in section 12(d)(1)(A) of the
Act, except to the extent that such Underlying Fund: (a) Receives
securities of another investment company as a dividend or as a result
of a plan of reorganization of a company (other than a plan devised for
the purpose of evading section 12(d)(1) of the Act); or (b) acquires
(or is deemed to have acquired) securities of another investment
company pursuant to exemptive relief from the Commission permitting
such Underlying Fund to: (i) Acquire securities of one or more
affiliated investment companies for short-term cash management
purposes, or (ii) engage in interfund borrowing and lending
transactions.
    10. The Board of any Fund of Funds will satisfy the fund governance
standards as defined in rule 0-1(a)(7) under the Act (``Governance
Standards'') by the earlier of the date of reliance on the order or the
date on which the Fund of Funds executes a Participation Agreement.
    The Board of any Unaffiliated Fund will satisfy the Governance
Standards by the date on which the Unaffiliated Fund executes a
Participation Agreement.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-7259 Filed 5-11-06; 8:45 am]

BILLING CODE 8010-01-P