[Federal Register Volume 86, Number 87 (Friday, May 7, 2021)]
[Proposed Rules]
[Pages 24560-24562]
[FR Doc No: 2021-08922]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2010-0865; Project Identifier 2010-SW-061-AD]
RIN 2120-AA64

Airworthiness Directives; Bell Textron Canada Limited (Type
Certificate Previously Held by Bell Helicopter Textron Canada Limited)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Supplemental notice of proposed rulemaking (SNPRM).

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SUMMARY: The FAA is revising a notice of proposed rulemaking (NPRM)
that applied to certain Bell Helicopter Textron Canada Limited (now
Bell Textron Canada Limited) Model 206A, 206B, 206L, 206L-1, 206L-3,
and 206L-4 helicopters. This action revises the NPRM by revising the
format, rearranging certain paragraphs, converting a certain table to
paragraph format, and removing certain language. The FAA is proposing
this airworthiness directive (AD) to address the unsafe condition on
these products. Since the NPRM was issued, a significant amount of time
has elapsed requiring the FAA to reopen the comment period to allow the
public a chance to comment on the proposed actions.

DATES: The FAA must receive comments on this SNPRM by June 21, 2021.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this SNPRM, contact Bell
Helicopter Textron Canada Limited, 12,800 Rue de l'Avenir, Mirabel,
Quebec J7J1R4; phone:<PHONE_NUMBER> or<PHONE_NUMBER>; fax: (450) 433-
0272; internet: https://www.bellcustomer.com. You may view this service
information at the FAA, Office of the Regional Counsel, Southwest
Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. For
information on the availability of this material at the FAA, call (817)
222-5110.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2010-0865; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains the NPRM, this SNPRM,
any comments received, and other information. The address for Docket
Operations is U.S. Department of Transportation, Docket Operations, M-
30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue
SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Kathleen Arrigotti, Program Manager,
Large Aircraft Section, International Validation Branch, Compliance &
Airworthiness Division, FAA, 2200 South 216th St., Des Moines, WA
98198; phone and fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2010-0865; Project Identifier
2010-SW-061-AD'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may again
revise this proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this proposed AD.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this SNPRM contain
commercial or financial information that is customarily treated as
private, that you actually treat as private, and that is relevant or
responsive to this SNPRM, it is important that you clearly designate
the submitted comments as CBI. Please mark each page of your submission
containing CBI as ``PROPIN.'' The FAA will treat such marked
submissions as confidential under the FOIA, and they will not be placed
in the public docket of this SNPRM. Submissions containing CBI should
be sent to Kathleen Arrigotti, Program Manager, Large Aircraft Section,
International Validation Branch, Compliance & Airworthiness Division,
FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: (206)
231-3218; email<EMAIL_ADDRESS>Any commentary that the
FAA receives which is not specifically designated as CBI will be placed
in the public docket for this rulemaking.

Background

    The FAA issued an NPRM to amend 14 CFR part 39 by adding an AD that
would apply to certain Bell Helicopter Textron Canada Limited (now Bell
Textron Canada Limited) Model 206A, 206B, 206L, 206L-1, 206L-3, and
206L-4 helicopters. The NPRM published in the Federal Register on
August 30, 2010 (75 FR 52914). In the NPRM, the FAA proposed to require
determining if an

affected part is installed (by doing a maintenance records check or
inspection), and if an affected part is found, replacement with a non-
affected part. The NPRM was prompted by a report that a certain disc
assembly, sold as an alternate part, does not conform to the approved
configuration.
    Transport Canada Civil Aviation (TCCA), which is the aviation
authority for Canada, issued Canadian AD CF-2010-07, dated February 24,
2010 (Canadian AD CF-2010-07), to correct an unsafe condition for
certain Bell Helicopter Textron Canada Limited (now Bell Textron Canada
Limited) Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4
helicopters. TCCA advises that a certain tail rotor disc assembly, sold
through Bell Helicopter Spares beginning March 2009, as an alternate,
does not conform to the approved configuration. TCCA stated operating a
helicopter with the affected tail rotor disc assembly could result in
loss of control of the helicopter.
    Accordingly, the Canadian AD requires determining if an affected
part is installed, and if an affected part is found, replacement with a
non-affected part.

Actions Since the NPRM Was Issued

    Since the NPRM was issued, the AD format has been revised, and
certain paragraphs have been rearranged. As a result, the corresponding
paragraph identifiers have changed in this proposed AD (in the SNPRM),
as listed in the following table:

------------------------------------------------------------------------
 Requirement in the proposed AD  (in     Corresponding  requirement in
              the NPRM)                 this proposed AD  (in the SNPRM)
------------------------------------------------------------------------
paragraph (f)........................  paragraph (g).
paragraph (f)(1).....................  paragraph (g)(1).
paragraph (f)(2).....................  paragraph (g)(2).
paragraph (f)(3).....................  paragraph (g)(3).
paragraph (f)(4).....................  paragraph (g)(4).
paragraph (f)(5).....................  paragraph (h).
------------------------------------------------------------------------

    The FAA also has removed the table following paragraph (c) of the
proposed AD (in the NPRM), which identified the model and serial
numbers; instead, the model and serial numbers are included in
paragraphs (c)(1) through (6) of this proposed AD (in the SNPRM).
    In addition, the text ``no further action is required'' is removed
from paragraph (g)(3) of this proposed AD (in the SNPRM) as the parts
installation prohibition specified in paragraph (h) of this proposed AD
(in the SNPRM) also applies to helicopters accomplishing the action in
paragraph (g)(3) of this proposed AD (in the SNPRM).
    These changes do not affect the intent of the actions in the
proposed AD (in the NPRM). However, since a significant amount of time
has elapsed since the NPRM, the FAA is reopening the comment period to
allow the public a chance to comment on the proposed actions.

Comments

    The FAA received no comments on the NPRM or on the determination of
the cost.

FAA's Determination

    These helicopters have been approved by the aviation authority of
Canada and are approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with Canada, TCCA, its technical
representative, has notified the FAA of the unsafe condition described
in its AD. The FAA is proposing this AD after determining the unsafe
condition described previously is likely to exist or develop in other
helicopters of the same type design. Certain changes described above
expand the scope of the NPRM. As a result, it is necessary to reopen
the comment period to provide additional opportunity for the public to
comment on this SNPRM.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed the following service information. This service
information specifies procedures to determine if an affected part is
installed, and if an affected part is found, replacement with a non-
affected part. These documents are distinct since they apply to
different helicopter models.
     Bell Helicopter Alert Service Bulletin 206-09-123,
Revision A, dated June 10, 2009.
     Bell Helicopter Alert Service Bulletin 206L-09-157,
Revision A, dated June 10, 2009.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Proposed AD Requirements in This SNPRM

    This proposed AD would require accomplishing the actions specified
in the service information already described.

Costs of Compliance

    The FAA estimates that this proposed AD affects 1,493 helicopters
of U.S. registry. The FAA estimates the following costs to comply with
this proposed AD:

                                      Estimated Costs for Required Actions
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                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
1 work-hour x $85 per hour = $85.............................            $303             $388         $579,284
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Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.

    For the reasons discussed, I certify this proposed regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Would not affect intrastate aviation in Alaska, and
    (3) Would not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

Bell Textron Canada Limited (Type Certificate Previously Held by
Bell Helicopter Textron Canada Limited): Docket No. FAA-2010-0865;
Project Identifier 2010-SW-061-AD.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) action by June 21, 2021.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to the following Bell Textron Canada Limited
(type certificate previously held by Bell Helicopter Textron Canada
Limited) helicopters, certificated in any category:
    (1) Model 206A, serial numbers 004 through 660 inclusive, and
672 through 715 inclusive;
    (2) Model 206B, all serial numbers, including those converted
from Model 206A;
    (3) Model 206L, serial numbers 45004 through 45153 inclusive,
and 46601 through 46617 inclusive;
    (4) Model 206L-1, serial numbers 45154 through 45790 inclusive;
    (5) Model 206L-3, serial numbers 51001 through 51612 inclusive;
and
    (6) Model 206L-4, all serial numbers.

(d) Subject

    Joint Aircraft Service Component (JASC) Code: 65, Tail Rotor
Drive.

(e) Unsafe Condition

    This AD was prompted by a report that a certain tail rotor disc
assembly, sold as an alternate part, does not conform to the
approved configuration. The FAA is issuing this AD to address
helicopters operating with a certain tail rotor disc assembly, sold
as an alternate part, that does not conform to the approved
configuration, which could result in loss of control of the
helicopter.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Required Actions

    Do the actions specified in paragraphs (g)(1) through (4) of
this AD, in accordance with Bell Helicopter Alert Service Bulletin
206-09-123, Revision A, dated June 10, 2009; or Bell Helicopter
Alert Service Bulletin 206L-09-157, Revision A, dated June 10, 2009,
as applicable.
    (1) Within 30 days or 100 hours time-in-service (TIS) after the
effective date of this AD, whichever occurs first, review the
helicopter maintenance records to determine if a disc assembly, part
number (P/N) 101584-1 or -2, is installed.
    (2) If, during the maintenance records review required by
paragraph (g)(1) of this AD, you cannot positively determine that
disc assembly P/N 101584-1 or -2 is not installed, within 30 days or
100 hours TIS after the effective date of this AD, whichever occurs
first, inspect the tail rotor driveshaft system to determine if disc
assembly P/N 101584-1 or -2 is installed.
    (3) If, during the maintenance records review required by
paragraph (g)(1) of the this AD or during the inspection required by
paragraph (g)(2) of this AD, you can positively determine that a
disc assembly P/N 101584-1 or -2 is not installed, before further
flight, make an entry in the log book showing compliance with this
AD.
    (4) If, during the maintenance records review required by
paragraph (g)(1) of this AD or during the inspection required by
paragraph (g)(2) of this AD, you can positively determine that a
disc assembly P/N 101584-1 or -2 is installed, within 30 days or 100
hours TIS after the effective date of this AD, whichever occurs
first, replace disc assembly P/N 101584-1 or -2 with disc assembly
P/N 32721-1.

(h) Parts Installation Prohibition

    As of the effective date of this AD, do not install disc
assembly P/N 101584-1 or -2.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, International Validation Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. Send your proposal to:
Manager, International Validation Branch, FAA, 10101 Hillwood Pkwy.,
Fort Worth, TX 76177; telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>Information may be emailed to: a99084e8fffa84e8e0fb849e9a9984e8e4e6eae9cfc8c887cec6df.
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(j) Related Information

    (1) For more information about this AD, contact Kathleen
Arrigotti, Program Manager, Large Aircraft Section, International
Validation Branch, Compliance & Airworthiness Division, FAA, 2200
South 216th St., Des Moines, WA 98198; phone and fax: (206) 231-
3218; email<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact Bell
Helicopter Textron Canada Limited, 12,800 Rue de l'Avenir, Mirabel,
Quebec J7J1R4; phone:<PHONE_NUMBER> or<PHONE_NUMBER>; fax: (450) 433-
0272; internet: https://www.bellcustomer.com. You may view this
referenced service information at the FAA, Office of the Regional
Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort
Worth, TX 76177. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.
    (3) The subject of this AD is addressed in Transport Canada
Civil Aviation (TCCA) Canadian AD CF-2010-07, dated February 24,
2010. You may view the TCCA AD on the internet at https://www.regulations.gov in the AD Docket.

    Issued on April 23, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-08922 Filed 5-6-21; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 177 (Wednesday, September 12, 2018)]
[Notices]
[Pages 46225-46228]
[FR Doc No: 2018-19765]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33219; 812-14767]

PIMCO Flexible Credit Income Fund, et al.

September 6, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and
23(c) of the Act for an exemption from rule 23c-3 under the Act, and
for an order pursuant to section 17(d) of the Act and rule 17d-1 under
the Act.

Summary of Application: Applicants request an order to permit certain
registered closed-end management investment companies to issue multiple
classes of shares and to impose asset-based distribution and/or service
fees and early withdrawal charges (``EWCs'').

Applicants: PIMCO Flexible Credit Income Fund (the ``Credit Fund'') and
PIMCO Flexible Municipal Income Fund (the ``Municipal Fund'') (the
Credit Fund and the Municipal Fund together the ``Initial Funds''),
Pacific Investment Management Company LLC (the ``Investment Manager'')
and PIMCO Investments LLC (the ``Distributor'').

Filing Dates: The application was filed on April 25, 2017 and amended
on December 4, 2017 and August 20, 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 October 1, 2018, and should be accompanied by proof of
service on the applicants, in the form of an affidavit, or, for
lawyers, a certificate of service. Pursuant to rule 0-5 under the Act,
hearing requests should state the nature of the writer's interest, any
facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE, Washington, DC 20549-1090; Applicants: PIMCO Flexible Credit
Income Fund, PIMCO Flexible Municipal Income Fund, Pacific Investment
Management Company LLC and PIMCO Investments LLC, c/o David C.
Sullivan, Esq., Ropes & Gray LLP, 800 Boylston St., Boston, MA 02199 .

FOR FURTHER INFORMATION CONTACT: Rachel Loko, Senior Counsel or Aaron
Gilbride, Branch Chief, at<PHONE_NUMBER> (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 or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Credit Fund is a Massachusetts business trust that is
registered under the Act as a non-diversified, closed-end management
investment company. The Credit Fund seeks to provide attractive risk-
adjusted returns and current income. The Credit Fund seeks to achieve
its investment objectives by investing, under normal circumstances, at
least 80% of its net assets (plus any borrowings for investment
purposes) in a portfolio of debt instruments of varying maturities. The
Municipal Fund is a Massachusetts business trust registered under the
Act as a non-diversified, closed-end management investment company. The
Municipal Fund seeks to provide high current income exempt from federal
income tax. Capital appreciation is a secondary objective. The
Municipal Fund seeks to achieve these objectives by investing at least
80% of its net assets (plus any borrowings for investment purposes) in
a portfolio of municipal bonds and other municipal securities, the
interest from which, in the opinion of bond counsel for the issuer at
the time of issuance (or on the basis of other authority believed by
PIMCO to be reliable), is exempt from federal income tax. To a lesser
extent, the Municipal Fund also expects to invest in a full range of
preferred securities, with an emphasis on preferred securities that, at
the time of issuance, are eligible to pay dividends that qualify for
certain favorable federal income tax treatment.
    2. The Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended. The Investment
Manager serves as investment adviser to the Initial Funds.
    3. The applicants seek an order to permit the Initial Funds to
issue multiple classes of shares and to impose asset-based distribution
and/or service fees and EWCs.
    4. Applicants request that the order also apply to any continuously
offered registered closed-end management investment company that has
been previously organized or that may be organized in the future for
which the Investment Manager or Distributor, or any entity controlling,
controlled by, or under common control with the Investment Manager or
Distributor, or any successor in interest to any such entity,\1\ acts
as investment manager, adviser or principal underwriter and which
operates as an interval fund pursuant to rule 23c-3 under the Act or
provides periodic liquidity with respect to its shares pursuant to rule
13e-4 under the Securities Exchange Act of 1934 (``Exchange Act'')
(each, a ``Future Fund'' and together with the Initial Funds, the
``Funds'').\2\
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    \1\ A successor in interest is limited to an entity that results
from a reorganization into another jurisdiction or a change in the
type of business organization.
    \2\ Any Fund relying on this relief in the future will do so in
a manner consistent with the terms and conditions of the
application. Applicants represent that each entity presently
intending to rely on the requested relief is listed as an applicant.
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    5. The Credit Fund continuously offers, and the Municipal Fund will
continuously offer, common shares to the public. Applicants state that
additional offerings by any Fund relying on the order may be on a
private placement or public offering basis. Shares of the Funds will
not be listed on any securities exchange nor quoted on any quotation
medium. The Funds do not expect there to be a secondary trading market
for their shares.
    6. If the requested relief is granted, the Credit Fund intends to
commence a continuous offering of one or more additional classes of
shares. If the relief requested herein is granted, it is currently
expected that the Municipal Fund will initially offer two share
classes. It is currently expected that one share class will not be
subject to a front-end sales load, a distribution fee or a service fee.
The other share class may be subject to a front-end sales load, a
distribution fee and/or a service fee. The Funds may in the future
offer additional classes of shares and/or another sales charges
structure. Because of the different distribution fees, services and any
other class expenses that may be attributable to the each class of
shares, the net income attributable to, and the dividends payable on,
each class of shares may differ from each other.
    7. Applicants state that, from time to time, the Funds may create
additional classes of shares, the terms of which may differ from the
initial class in the following respects: (i) The amount of fees
permitted by different distribution plans or different service fee
arrangements; (ii) voting rights with respect to a distribution plan of
a class; (iii) different class designations; (iv) any differences in
dividends and net asset value resulting from differences in fees under
a distribution or service fee arrangement or in class expenses; (v) any
EWC or other sales load structure; and (vi) exchange or conversion
privileges of the classes as permitted under the Act.

    8. Applicants state that the Initial Funds have each adopted a
fundamental policy to repurchase a specified percentage of its shares
(no less than 5%) at net asset value on a quarterly basis. Such
repurchase offers will be conducted pursuant to rule 23c-3 under the
Act. Each of the other Funds will likewise adopt fundamental investment
policies and make periodic repurchase offers to its shareholders in
compliance with rule 23c-3 or will provide periodic liquidity with
respect to its shares pursuant to rule 13e-4 under the Exchange Act.\3\
Any repurchase offers made by the Funds will be made to all holders of
shares of each such Fund.
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    \3\ Applicants submit that rule 23c-3 and Regulation M under the
Exchange Act permit an interval fund to make repurchase offers to
repurchase its shares while engaging in a continuous offering of its
shares pursuant to Rule 415 under the Securities Act of 1933, as
amended.
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    9. Applicants represent that any asset-based service and/or
distribution fees for each class of shares of the Funds will comply
with the provisions of FINRA Rule 2341(d) (``FINRA Sales Charge
Rule'').\4\ Applicants also represent that each Fund will disclose in
its prospectus the fees, expenses and other characteristics of each
class of shares offered for sale by the prospectus, as is required for
open-end multiple class funds under Form N-1A. As is required for open-
end funds, each Fund will disclose its expenses in shareholder reports,
and describe any arrangements that result in breakpoints in or
elimination of sales loads in its prospectus.\5\ In addition,
applicants will comply with applicable enhanced fee disclosure
requirements for fund of funds, including registered funds of hedge
funds.\6\
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    \4\ Any reference to the FINRA Sales Charge Rule includes any
successor or replacement to the FINRA Sales Charge Rule.
    \5\ See Shareholder Reports and Quarterly Portfolio Disclosure
of Registered Management Investment Companies, Investment Company
Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring
open-end investment companies to disclose fund expenses in
shareholder reports); and Disclosure of Breakpoint Discounts by
Mutual Funds, Investment Company Act Release No. 26464 (June 7,
2004) (adopting release) (requiring open-end investment companies to
provide prospectus disclosure of certain sales load information).
    \6\ Fund of Funds Investments, Investment Company Act Rel. Nos.
26198 (Oct. 1, 2003) (proposing release) and 27399 (Jun. 20, 2006)
(adopting release). See also Rules 12d1-1, et seq. of the Act.
---------------------------------------------------------------------------

    10. Each of the Funds will comply with any requirements that the
Commission or FINRA may adopt regarding disclosure at the point of sale
and in transaction confirmations about the costs and conflicts of
interest arising out of the distribution of open-end investment company
shares, and regarding prospectus disclosure of sales loads and revenue
sharing arrangements, as if those requirements applied to the Fund. In
addition, each Fund will contractually require that any distributor of
the Fund's shares comply with such requirements in connection with the
distribution of such Fund's shares.
    11. Each Fund will allocate all expenses incurred by it among the
various classes of shares based on the net assets of that Fund
attributable to each class, except that the net asset value and
expenses of each class will reflect the expenses associated with the
distribution plan of that class, service fees attributable to that
class (if any), including transfer agency fees, and any other
incremental expenses of that class. Expenses of a Fund allocated to a
particular class of shares will be borne on a pro rata basis by each
outstanding share of that class. Applicants state that each Fund will
comply with the provisions of rule 18f-3 under the Act as if it were an
open-end investment company.
    12. Applicants state that each Fund may impose an EWC on shares
submitted for repurchase that have been held less than a specified
period and may waive the EWC for certain categories of shareholders or
transactions to be established from time to time. Applicants state that
each Fund will apply the EWC (and any waivers or scheduled variations,
or elimination of the EWC) uniformly to all shareholders in a given
class and consistently with the requirements of rule 22d-1 under the
Act as if the Funds were open-end investment companies.
    13. Each Fund operating as an interval fund pursuant to rule 23c-3
under the Act may offer its shareholders an exchange feature under
which the shareholders of the Fund may, in connection with such Fund's
periodic repurchase offers, exchange their shares of the Fund for
shares of the same class of (i) registered open-end investment
companies or (ii) other registered closed-end investment companies that
comply with rule 23c-3 under the Act or Rule 13e-4 under the Exchange
Act and continuously offer their shares at net asset value, that are in
the Fund's group of investment companies (collectively, ``Other
Funds''). Shares of a Fund operating pursuant to rule 23c-3 that are
exchanged for shares of Other Funds will be included as part of the
amount of the repurchase offer amount for such Fund as specified in
rule 23c-3 under the Act. Any exchange option will comply with rule
11a-3 under the Act, as if the Fund were an open-end investment company
subject to rule 11a-3. In complying with rule 11a-3, each Fund will
treat an EWC as if it were a contingent deferred sales load (``CDSL'').

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(a)(2) of the Act provides that a closed-end
investment company may not issue or sell a senior security that is a
stock unless certain requirements are met. Applicants state that the
creation of multiple classes of shares of the Funds may violate section
18(a)(2) because the Funds may not meet such requirements with respect
to a class of shares that may be a senior security.
    2. Section 18(c) of the Act provides, in relevant part, that a
closed-end investment company may not issue or sell any senior security
if, immediately thereafter, the company has outstanding more than one
class of senior security. Applicants state that the creation of
multiple classes of shares of the Funds may be prohibited by section
18(c), as a class may have priority over another class as to payment of
dividends because shareholders of different classes would pay different
fees and expenses.
    3. Section 18(i) of the Act provides that each share of stock
issued by a registered management investment company will be a voting
stock and have equal voting rights with every other outstanding voting
stock. Applicants state that multiple classes of shares of the Funds
may violate section 18(i) of the Act because each class would be
entitled to exclusive voting rights with respect to matters solely
related to that class.
    4. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction or any class or classes of persons,
securities or transactions from any provision of the Act, or from any
rule or regulation under the Act, if and to the extent 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. Applicants request an exemption under
section 6(c) from sections 18(a)(2), 18(c) and 18(i) to permit the
Funds to issue multiple classes of shares.
    5. Applicants submit that the proposed allocation of expenses
relating to distribution and voting rights among multiple classes is
equitable and will not discriminate against any group or class of
shareholders. Applicants submit that the proposed arrangements would
permit a Fund to facilitate the distribution of its securities and
provide

investors with a broader choice of shareholder services. Applicants
assert that the proposed closed-end investment company multiple class
structure does not raise the concerns underlying section 18 of the Act
to any greater degree than open-end investment companies' multiple
class structures that are permitted by rule 18f-3 under the Act.
Applicants state that each Fund will comply with the provisions of rule
18f-3 as if it were an open-end investment company.

Early Withdrawal Charges

    1. Section 23(c) of the Act provides, in relevant part, that no
registered closed-end investment company shall purchase securities of
which it is the issuer, except: (a) On a securities exchange or other
open market; (b) pursuant to tenders, after reasonable opportunity to
submit tenders given to all holders of securities of the class to be
purchased; or (c) under other circumstances as the Commission may
permit by rules and regulations or orders for the protection of
investors.
    2. Rule 23c-3 under the Act permits an ``interval fund'' to make
repurchase offers of between five and twenty-five percent of its
outstanding shares at net asset value at periodic intervals pursuant to
a fundamental policy of the interval fund. Rule 23c-3(b)(1) under the
Act permits an interval fund to deduct from repurchase proceeds only a
repurchase fee, not to exceed two percent of the proceeds, that is paid
to the interval fund and is reasonably intended to compensate the fund
for expenses directly related to the repurchase.
    3. Section 23(c)(3) provides that the Commission may issue an order
that would permit a closed-end investment company to repurchase its
shares in circumstances in which the repurchase is made in a manner or
on a basis that does not unfairly discriminate against any holders of
the class or classes of securities to be purchased.
    4. Applicants request relief under section 6(c), discussed above,
and section 23(c)(3) from rule 23c-3 to the extent necessary for the
Funds to impose EWCs on shares of the Funds submitted for repurchase
that have been held for less than a specified period.
    5. Applicants state that the EWCs they intend to impose are
functionally similar to CDSLs imposed by open-end investment companies
under rule 6c-10 under the Act. Rule 6c-10 permits open-end investment
companies to impose CDSLs, subject to certain conditions. Applicants
note that rule 6c-10 is grounded in policy considerations supporting
the employment of CDSLs where there are adequate safeguards for the
investor and state that the same policy considerations support
imposition of EWCs in the interval fund context. In addition,
applicants state that EWCs may be necessary for the distributor to
recover distribution costs. Applicants represent that any EWC imposed
by the Funds will comply with rule 6c-10 under the Act as if the rule
were applicable to closed-end investment companies. The Funds will
disclose EWCs in accordance with the requirements of Form N-1A
concerning CDSLs.

Asset-Based Distribution and/or Service Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
an affiliated person of a registered investment company, or an
affiliated person of such person, acting as principal, from
participating in or effecting any transaction in connection with any
joint enterprise or joint arrangement in which the investment company
participates unless the Commission issues an order permitting the
transaction. In reviewing applications submitted under section 17(d)
and rule 17d-1, the Commission considers whether the participation of
the investment company in a joint enterprise or joint arrangement is
consistent with the provisions, policies and purposes of the Act, and
the extent to which the participation is on a basis different from or
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section
17(d) and rule 17d-1 to permit open-end investment companies to enter
into distribution arrangements pursuant to rule 12b-1 under the Act.
Applicants request an order under section 17(d) and rule 17d-1 under
the Act to the extent necessary to permit the Fund to impose asset-
based distribution and/or service fees. Applicants have agreed to
comply with rules 12b-1 and 17d-3 as if those rules applied to closed-
end investment companies, which they believe will resolve any concerns
that might arise in connection with a Fund financing the distribution
of its shares through asset-based distribution fees.
    3. For the reasons stated above, applicants submit that the
exemptions requested under section 6(c) are necessary and appropriate
in the public interest and are consistent with the protection of
investors and the purposes fairly intended by the policy and provisions
of the Act. Applicants further submit that the relief requested
pursuant to section 23(c)(3) will be consistent with the protection of
investors and will insure that applicants do not unfairly discriminate
against any holders of the class of securities to be purchased.
Finally, applicants state that the Funds' imposition of asset-based
distribution and/or service fees is consistent with the provisions,
policies and purposes of the Act and does not involve participation on
a basis different from or less advantageous than that of other
participants.

Applicants' Condition

    Applicants agree that any order granting the requested relief will
be subject to the following condition:
    Each Fund relying on the order will comply with the provisions of
rules 6c-10, 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3
under the Act, as amended from time to time, as if those rules applied
to closed-end management investment companies, and will comply with the
FINRA Sales Charge Rule, as amended from time to time, as if that rule
applied to all closed-end management investment companies.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-19765 Filed 9-11-18; 8:45 am]
 BILLING CODE 8011-01-P