[Federal Register Volume 80, Number 212 (Tuesday, November 3, 2015)]
[Notices]
[Pages 67810-67818]
[FR Doc No: 2015-27907]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31884; File No. 812-14512]

SPDR[supreg] Series Trust, et al.; Notice of Application

October 28, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

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

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Summary of Application: Applicants request an order that would permit
(a) series of certain open-end management investment companies to issue
shares (``Shares'') redeemable in large aggregations only (``Creation
Units''); (b) secondary market transactions in Shares to occur at
negotiated market prices rather than at net asset value (``NAV''); (c)
certain series to pay redemption proceeds, under certain circumstances,
more than seven days after the tender of Creation Units for redemption;
(d) certain affiliated persons of the series to deposit securities
into, and receive securities from, the series 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 series to acquire Shares.

Applicants: SPDR[supreg] Series Trust, SPDR[supreg] Index Shares Funds
(together, the ``Trusts''), SSGA Funds Management, Inc. (``Initial
Adviser'') and State Street Global Markets, LLC (``Distributor'').

Filing Dates: The application was filed on July 13, 2015, and amended
on

September 30, 2015 and October 27, 2015.

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 23, 2015, 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: The Commission: Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants:
One Lincoln Street, Boston, MA 02111.

FOR FURTHER INFORMATION CONTACT: Robert Shapiro, Senior Counsel at
(202) 551-7758, or Mary Kay Frech, 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 Web site 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<PHONE_NUMBER>.

Applicants' Representations

    1. Each Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts and is registered with the Commission as
an open-end management investment company that offers multiple series.
    2. The Initial Adviser will be the investment adviser to the
Initial Fund (defined below). The Initial Adviser is, and any other
Adviser (defined below) will be, registered as an investment adviser
under the Investment Advisers Act of 1940 (the ``Advisers Act''). The
Adviser may enter into sub-advisory agreements with one or more
investment advisers to act as sub-advisers to particular Funds (each, a
``Sub-Adviser''). Any Sub-Adviser will either be registered under the
Advisers Act or will not be required to register thereunder.
    3. The Distributor, a broker-dealer registered under the Securities
Exchange Act of 1934 (``Exchange Act'') and a member of the Financial
Industry Regulatory Authority, serves as the principal underwriter for
the Trusts. The Distributor will not be affiliated with any Exchange
(defined below).
    4. Applicants request that the order apply to a new series, the
Large Cap ETF (``Initial Fund''), and any additional series of a Trust,
and any other open-end management investment company or series thereof,
that may be created in the future (``Future Funds''), each of which
will operate as an exchange traded fund (``ETF'') and will track a
specified Affiliated Index (as defined below) comprised of domestic
and/or foreign equity and/or fixed income securities (each, an
``Underlying Index''). Any Future Fund will (a) be advised by the
Initial Adviser, or an entity controlling, controlled by, or under
common control with the Initial Adviser (each, an ``Adviser'') and (b)
comply with the terms and conditions of the application. The Initial
Fund and Future Funds, together, are the ``Funds.'' \1\
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    \1\ All existing entities that intend to rely on the requested
order have been named as applicants. Any other existing or future
entity that subsequently relies on the order will comply with the
terms and conditions of the order. A Fund of Funds (as defined
below) may rely on the order only to invest in Funds and not in any
other registered investment company.
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    5. Each Fund will hold certain securities, currencies, other assets
and other investment positions (``Portfolio Holdings'') selected to
correspond to the performance of its Underlying Index. Certain of the
Funds will be based on Underlying Indexes that will be comprised of
equity and/or fixed income securities issued by one or more of the
following categories of issuers: (i) Domestic issuers and (ii) non-
domestic issuers meeting the requirements for trading in U.S. markets.
Other Funds will be based on Underlying Indexes that will be comprised
of foreign and domestic, or solely foreign, equity and/or fixed income
securities (``Foreign Funds'').
    6. Applicants represent that each Fund will invest at least 80% of
its assets (excluding securities lending collateral) in the component
securities of its respective Underlying Index (``Component
Securities'') and TBA Transactions,\2\ and in the case of Foreign
Funds, Component Securities and Depositary Receipts \3\ representing
Component Securities. Each Fund may also invest up to 20% of its assets
in certain index futures, options, options on index futures, swap
contracts or other derivatives, as related to its respective Underlying
Index and its Component Securities, cash and cash equivalents, other
investment companies, as well as in securities and other instruments
not included in its Underlying Index but which the Adviser believes
will help the Fund track its Underlying Index. A Fund may also engage
in short sales in accordance with its investment objective.
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    \2\ A ``to-be-announced transaction'' or ``TBA Transaction'' is
a method of trading mortgage-backed securities. In a TBA
Transaction, the buyer and seller agree upon general trade
parameters such as agency, settlement date, par amount and price.
The actual pools delivered generally are determined two days prior
to settlement date.
    \3\ Depositary receipts representing foreign securities
(``Depositary Receipts'') include American Depositary Receipts and
Global Depositary Receipts. The Funds may invest in Depositary
Receipts representing foreign securities in which they seek to
invest. Depositary Receipts are typically issued by a financial
institution (a ``depositary bank'') and evidence ownership interests
in a security or a pool of securities that have been deposited with
the depositary bank. A Fund will not invest in any Depositary
Receipts that the Adviser or any Sub-Adviser deems to be illiquid or
for which pricing information is not readily available. No
affiliated person of a Fund, the Adviser or any Sub-Adviser will
serve as the depositary bank for any Depositary Receipts held by a
Fund.
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    7. A Fund will utilize either a replication or representative
sampling strategy to track its Underlying Index. A Fund using a
replication strategy will invest in the Component Securities of its
Underlying Index in the same approximate proportions as in such
Underlying Index. A Fund using a representative sampling strategy will
hold some, but not necessarily all, of the Component Securities of its
Underlying Index. Applicants state that a Fund using a representative
sampling strategy will not be expected to track the performance of its
Underlying Index with the same degree of accuracy as would an
investment vehicle that invested in every Component Security of the
Underlying Index with the same weighting as the Underlying Index.
Applicants expect that each Fund will have an annual tracking error
relative to the performance of its Underlying Index of less than 5%.
    8. The Funds will be entitled to use their Underlying Indexes
pursuant to either a licensing agreement with the entity that compiles,
creates, sponsors or maintains an Underlying Index (each, an ``Index
Provider'') or a sub-licensing arrangement with the Adviser, which has
or will have a licensing agreement with such Index Provider.\4\ An
affiliated

person, as defined in section 2(a)(3) of the Act (an ``Affiliated
Person''), or an affiliated person of an Affiliated Person (a ``Second-
Tier Affiliate''), of a Trust or a Fund, of an Adviser, of any Sub-
Adviser to or promoter of a Fund, or of the Distributor (each, an
``Affiliated Index Provider'') \5\ will serve as the Index Provider to
each Fund. An Affiliated Index Provider will create a proprietary,
rules-based methodology to create Underlying Indexes (each an
``Affiliated Index'').\6\
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    \4\ The licenses for the Funds will specifically state that the
Affiliated Index Provider (or in case of a sub-licensing agreement,
the Adviser) must provide the use of the Underlying Indexes and
related intellectual property at no cost to the Trusts and the
Funds.
    \5\ In the event that an Adviser or Sub-Adviser serves as the
Affiliated Index Provider for a Fund, the terms ``Affiliated Index
Provider'' or ``Index Provider,'' with respect to that Fund, will be
limited to the employees of the applicable Adviser or Sub-Adviser
that are responsible for creating, compiling and maintaining the
relevant Underlying Index.
    \6\ The Affiliated Indexes may be made available to registered
investment companies, as well as separately managed accounts of
institutional investors and privately offered funds that are not
deemed to be ``investment companies'' in reliance on section 3(c)(1)
or 3(c)(7) of the Act for which the Adviser acts as adviser or
subadviser (``Affiliated Accounts'') as well as other such
registered investment companies, separately managed accounts and
privately offered funds for which it does not act either as adviser
or subadviser (``Unaffiliated Accounts''). The Affiliated Accounts
and the Unaffiliated Accounts, like the Funds, would seek to track
the performance of one or more Underlying Index(es) by investing in
the constituents of such Underlying Indexes or a representative
sample of such constituents of the Underlying Index. Consistent with
the relief requested from section 17(a), the Affiliated Accounts
will not engage in Creation Unit transactions with a Fund.
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    9. Applicants recognize that the Funds could raise concerns
regarding the ability of the Affiliated Index Provider to manipulate
the Underlying Index to the benefit or detriment of a Fund. Applicants
further recognize the potential for conflicts that may arise with
respect to the personal trading activity of personnel of the Affiliated
Index Provider who have knowledge of changes to an Underlying Index
prior to the time that information is publicly disseminated.
    10. Applicants propose that each day that the Trust, the NYSE and
the national securities exchange (as defined in section 2(a)(26) of the
Act) (an ``Exchange'') on which the Fund's Shares are primarily listed
(``Listing Exchange'') are open for business, including any day that a
Fund is required to be open under section 22(e) of the Act (a
``Business Day''), each Fund will post on its Web site, before
commencement of trading of Shares on the Exchange, the identities and
quantities of the Portfolio Holdings that will form the basis for the
Fund's calculation of its NAV at the end of the Business Day.\7\
Applicants believe that requiring the Funds to maintain full portfolio
transparency will provide an additional effective mechanism for
addressing any such potential conflicts of interest.
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    \7\ Under accounting procedures followed by each Fund, trades
made on the prior Business Day (``T'') will be booked and reflected
in NAV on the current Business Day (T+1). Accordingly, the Funds
will be able to disclose at the beginning of the Business Day the
portfolio that will form the basis for the NAV calculation at the
end of the Business Day.
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    11. In addition, applicants do not believe the potential for
conflicts of interest raised by the Adviser's use of the Underlying
Indexes in connection with the management of Funds and the Affiliated
Accounts will be substantially different from the potential conflicts
presented by an adviser managing two or more registered funds. Both the
Act and the Advisers Act contain various protections to address
conflicts of interest where an adviser is managing two or more
registered funds and these protections will also help address these
conflicts with respect to the Funds.
    12. Each Adviser and any Sub-Adviser has adopted or will adopt,
pursuant to rule 206(4)-7 under the Advisers Act, written policies and
procedures designed to prevent violations of the Advisers Act and the
rules thereunder. These include policies and procedures designed to
minimize potential conflicts of interest among the Funds and the
Affiliated Accounts, such as cross trading policies, as well as those
designed to ensure the equitable allocation of portfolio transactions
and brokerage commissions. In addition, the Initial Adviser has adopted
policies and procedures as required under section 204A of the Advisers
Act, which are reasonably designed in light of the nature of its
business to prevent the misuse, in violation of the Advisers Act or the
Exchange Act or the rules thereunder, of material non-public
information by the Initial Adviser or associated persons (``Inside
Information Policy''). Any other Adviser and/or Sub-Adviser will be
required to adopt and maintain a similar Inside Information Policy. In
accordance with the Code of Ethics \8\ and Inside Information Policy of
each Adviser and Sub-Advisers, personnel of those entities with
knowledge about the composition of a Portfolio Deposit \9\ will be
prohibited from disclosing such information to any other person, except
as authorized in the course of their employment, until such information
is made public. In addition, an Index Provider will not provide any
information relating to changes to an Underlying Index's methodology
for the inclusion of component securities, the inclusion or exclusion
of specific component securities, or methodology for the calculation or
the return of component securities, in advance of a public announcement
of such changes by the Index Provider. The Adviser will also include
under Item 10.C. of Part 2 of its Form ADV a discussion of its
relationship to any Affiliated Index Provider and any material
conflicts of interest resulting therefrom, regardless of whether the
Affiliated Index Provider is a type of affiliate specified in Item 10.
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    \8\ The Initial Adviser has also adopted (and any other Adviser
has adopted or will adopt) a code of ethics pursuant to rule 17j-1
under the Act and rule 204A-1 under the Advisers Act, which contains
provisions reasonably necessary to prevent Access Persons (as
defined in rule 17j-1) from engaging in any conduct prohibited in
rule 17j-1 (``Code of Ethics'').
    \9\ The instruments and cash that the purchaser is required to
deliver in exchange for the Creation Units it is purchasing is
referred to as the ``Portfolio Deposit.''
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    13. To the extent the Funds transact with an Affiliated Person of
an Adviser or Sub-Adviser, such transactions will comply with the Act,
the rules thereunder and the terms and conditions of the requested
order. In this regard, each Fund's board of directors or trustees
(``Board'') will periodically review the Fund's use of an Affiliated
Index Provider. Subject to the approval of the Fund's Board, the
Adviser, Affiliated Persons of the Adviser (``Adviser Affiliates'') and
Affiliated Persons of any Sub-Adviser (``Sub-Adviser Affiliates'') may
be authorized to provide custody, fund accounting and administration
and transfer agency services to the Funds. Any services provided by the
Adviser, Adviser Affiliates, Sub-Adviser and Sub-Adviser Affiliates
will be performed in accordance with the provisions of the Act, the
rules under the Act and any relevant guidelines from the staff of the
Commission.
    14. The Shares of each Fund 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 below, purchasers will be required to purchase
Creation Units by making an in-kind deposit of specified instruments
(``Deposit Instruments''), and shareholders redeeming their Shares will
receive an in-kind transfer of specified instruments (``Redemption
Instruments'').\10\ On any given Business

Day, the names and quantities of the instruments that constitute the
Deposit Instruments and the names and quantities of the instruments
that constitute the Redemption Instruments will be identical, unless
the Fund is Rebalancing (as defined below). In addition, the Deposit
Instruments and the Redemption Instruments will each correspond pro
rata to the positions in the Fund's portfolio (including cash
positions) \11\ except: (a) In the case of bonds, for minor differences
when it is impossible to break up bonds beyond certain minimum sizes
needed for transfer and settlement; (b) for minor differences when
rounding is necessary to eliminate fractional shares or lots that are
not tradeable round lots; \12\ (c) TBA Transactions, short positions,
derivatives and other positions that cannot be transferred in kind \13\
will be excluded from the Deposit Instruments and the Redemption
Instruments; \14\ (d) to the extent the Fund determines, on a given
Business Day, to use a representative sampling of the Fund's portfolio;
\15\ or (e) for temporary periods, to effect changes in the Fund's
portfolio as a result of the rebalancing of its Underlying Index (any
such change, a ``Rebalancing''). If there is a difference between the
NAV attributable to a Creation Unit and the aggregate market value of
the Deposit Instruments or Redemption Instruments exchanged for the
Creation Unit, the party conveying instruments with the lower value
will also pay to the other an amount in cash equal to that difference
(the ``Cash Amount'').
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    \10\ The Funds must comply with the federal securities laws in
accepting Deposit Instruments and satisfying redemptions with
Redemption Instruments, including that the Deposit Instruments and
Redemption Instruments are sold in transactions that would be exempt
from registration under the Securities Act of 1933 (``Securities
Act''). In accepting Deposit Instruments and satisfying redemptions
with Redemption Instruments that are restricted securities eligible
for resale pursuant to rule 144A under the Securities Act, the Funds
will comply with the conditions of rule 144A.
    \11\ The portfolio used for this purpose will be the same
portfolio used to calculate the Fund's NAV for the Business Day.
    \12\ A tradeable round lot for a security will be the standard
unit of trading in that particular type of security in its primary
market.
    \13\ This includes instruments that can be transferred in kind
only with the consent of the original counterparty to the extent the
Fund does not intend to seek such consents.
    \14\ Because these instruments will be excluded from the Deposit
Instruments and the Redemption Instruments, their value will be
reflected in the determination of the Cash Amount (as defined
below).
    \15\ A Fund may only use sampling for this purpose if the
sample: (i) Is designed to generate performance that is highly
correlated to the performance of the Fund's portfolio; (ii) consists
entirely of instruments that are already included in the Fund's
portfolio; and (iii) is the same for all Authorized Participants (as
defined below) on a given Business Day.
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    15. Purchases and redemptions of Creation Units may be made in
whole or in part on a cash basis, rather than in kind, solely under the
following circumstances: (a) To the extent there is a Cash Amount; (b)
if, on a given Business Day, the Fund announces before the open of
trading that all purchases, all redemptions or all purchases and
redemptions on that day will be made entirely in cash; (c) if, upon
receiving a purchase or redemption order from an Authorized
Participant, the Fund determines to require the purchase or redemption,
as applicable, to be made entirely in cash; \16\ (d) if, on a given
Business Day, the Fund requires all Authorized Participants purchasing
or redeeming Shares on that day to deposit or receive (as applicable)
cash in lieu of some or all of the Deposit Instruments or Redemption
Instruments, respectively, solely because: (i) Such instruments are not
eligible for transfer through either the NSCC or DTC (defined below);
or (ii) in the case of Foreign Funds holding non-U.S. investments, such
instruments are not eligible for trading due to local trading
restrictions, local restrictions on securities transfers or other
similar circumstances; or (e) if the Fund permits an Authorized
Participant to deposit or receive (as applicable) cash in lieu of some
or all of the Deposit Instruments or Redemption Instruments,
respectively, solely because: (i) Such instruments are, in the case of
the purchase of a Creation Unit, not available in sufficient quantity;
(ii) such instruments are not eligible for trading by an Authorized
Participant or the investor on whose behalf the Authorized Participant
is acting; or (iii) a holder of Shares of a Foreign Fund holding non-
U.S. investments would be subject to unfavorable income tax treatment
if the holder receives redemption proceeds in kind.\17\
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    \16\ In determining whether a particular Fund will sell or
redeem Creation Units entirely on a cash or in-kind basis (whether
for a given day or a given order), the key consideration will be the
benefit that would accrue to the Fund and its investors. For
instance, in bond transactions, the Adviser may be able to obtain
better execution than Share purchasers because of the Adviser's
size, experience and potentially stronger relationships in the fixed
income markets. Purchases of Creation Units either on an all cash
basis or in-kind are expected to be neutral to the Funds from a tax
perspective. In contrast, cash redemptions typically require selling
portfolio holdings, which may result in adverse tax consequences for
the remaining Fund shareholders that would not occur with an in-kind
redemption. As a result, tax consideration may warrant in-kind
redemptions.
    \17\ A ``custom order'' is any purchase or redemption of Shares
made in whole or in part on a cash basis in reliance on clause
(e)(i) or (e)(ii).
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    16. Creation Units will consist of specified large aggregations of
Shares, e.g., at least 25,000 Shares, and it is expected that the
initial price of a Creation Unit will range from $1 million to $10
million. All orders to purchase Creation Units must be placed with the
Distributor by or through an ``Authorized Participant'' which is either
(1) a ``Participating Party,'' i.e., a broker-dealer or other
participant in the Continuous Net Settlement System of the NSCC, a
clearing agency registered with the Commission, or (2) a participant in
The Depository Trust Company (``DTC'') (``DTC Participant''), which, in
either case, has signed a participant agreement with the Distributor.
The Distributor will be responsible for transmitting the orders to the
Funds and will furnish to those placing such orders confirmation that
the orders have been accepted, but applicants state that the
Distributor may reject any order which is not submitted in proper form.
    17. Each Business Day, before the open of trading on the Listing
Exchange, each Fund will cause to be published through the NSCC the
names and quantities of the instruments comprising the Deposit
Instruments and the Redemption Instruments, as well as the estimated
Cash Amount (if any), for that day. The list of Deposit Instruments and
Redemption Instruments will apply until a new list is announced on the
following Business Day, and there will be no intra-day changes to the
list except to correct errors in the published list. Each Listing
Exchange or other major market data provider will disseminate, every 15
seconds during regular Exchange trading hours, through the facilities
of the Consolidated Tape Association or other widely disseminated
means, an amount for each Fund stated on a per individual Share basis
representing the sum of (i) the estimated Cash Amount and (ii) the
current value of the Deposit Instruments.
    18. Transaction expenses, including operational processing and
brokerage costs, will be incurred by a Fund when investors purchase or
redeem Creation Units in-kind and such costs have the potential to
dilute the interests of the Fund's existing shareholders. Each Fund
will impose purchase or redemption transaction fees (``Transaction
Fees'') in connection with effecting such purchases or redemptions of
Creation Units. In all cases, such Transaction Fees will be limited in
accordance with requirements of the Commission applicable to management
investment companies offering redeemable securities. Since the
Transaction Fees are intended to defray the transaction expenses as
well as to prevent possible shareholder dilution resulting from the
purchase or redemption of Creation Units, the

Transaction Fees will be borne only by such purchasers or
redeemers.\18\ The Distributor will be responsible for delivering the
Fund's prospectus to those persons acquiring Shares in Creation Units
and for maintaining records of both the orders placed with it and the
confirmations of acceptance furnished by it. In addition, the
Distributor will maintain a record of the instructions given to the
applicable Fund to implement the delivery of its Shares.
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    \18\ Where a Fund permits an in-kind purchaser to substitute
cash-in-lieu of depositing one or more of the requisite Deposit
Instruments, the purchaser may be assessed a higher Transaction Fee
to cover the cost of purchasing such Deposit Instruments.
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    19. Shares of each Fund will be listed and traded individually on
an Exchange. It is expected that one or more member firms of an
Exchange will be designated to act as a market maker (each, a ``Market
Maker'') and maintain a market for Shares trading on the Exchange.
Prices of Shares trading on an Exchange will be based on the current
bid/offer market. Transactions involving the sale of Shares on an
Exchange will be subject to customary brokerage commissions and
charges.
    20. Applicants expect that purchasers of Creation Units will
include institutional investors and arbitrageurs. Market Makers, acting
in their roles to provide a fair and orderly secondary market for the
Shares, may from time to time find it appropriate to purchase or redeem
Creation Units. Applicants expect that secondary market purchasers of
Shares will include both institutional and retail investors.\19\ The
price at which Shares trade will be disciplined by arbitrage
opportunities created by the option continually to purchase or redeem
Shares in Creation Units, which should help prevent Shares from trading
at a material discount or premium in relation to their NAV.
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    \19\ Shares will be registered in book-entry form only. DTC or
its nominee will be the record or registered owner of all
outstanding Shares. Beneficial ownership of Shares will be shown on
the records of DTC or the DTC Participants.
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    21. Shares will not be individually redeemable, and owners of
Shares may acquire those Shares from the Fund, or tender such Shares
for redemption to the Fund, in Creation Units only. To redeem, an
investor must accumulate enough Shares to constitute a Creation Unit.
Redemption requests must be placed through an Authorized Participant. A
redeeming investor may pay a Transaction Fee, calculated in the same
manner as a Transaction Fee payable in connection with purchases of
Creation Units.
    22. Neither a Trust nor any Fund will be advertised or marketed or
otherwise held out as a traditional open-end investment company or a
``mutual fund.'' Instead, each Fund will be marketed as an ``ETF.'' All
marketing materials that describe the features or method of obtaining,
buying or selling Creation Units, or Shares traded on an Exchange, or
refer to redeemability, will prominently disclose that Shares are not
individually redeemable and will disclose that the owners of Shares may
acquire those Shares from the Fund or tender such Shares for redemption
to the Fund in Creation Units only. The Funds will provide copies of
their annual and semi-annual shareholder reports to DTC Participants
for distribution to beneficial owners of Shares.

Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act for an
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 section 12(d)(1)(J) of the 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 sections
17(a)(1) and 17(a)(2) of the Act.
    2. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction, or any class of persons,
securities or transactions, from any provision of the Act, if and to
the extent that 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 17(b) of the Act authorizes the Commission to exempt a proposed
transaction from section 17(a) of the Act if evidence establishes that
the terms of the transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and the proposed transaction is
consistent with the policies of the registered investment company and
the general 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 provisions of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.

Sections 5(a)(1) and 2(a)(32) of the Act

    3. Section 5(a)(1) of the Act defines an ``open-end company'' as a
management investment company that is offering for sale or has
outstanding any redeemable security of which it is the issuer. Section
2(a)(32) of the Act defines a redeemable security as any security,
other than short-term paper, under the terms of which the owner, upon
its presentation to the issuer, is entitled to receive approximately a
proportionate share of the issuer's current net assets, or the cash
equivalent. Because Shares will not be individually redeemable,
applicants request an order that would permit the Funds to register as
open-end management investment companies and issue Shares that are
redeemable in Creation Units only. Applicants state that investors may
purchase Shares in Creation Units and redeem Creation Units from each
Fund. Applicants further state that because Creation Units may always
be purchased and redeemed at NAV, the price of Shares on the secondary
market should not vary materially from NAV.

Section 22(d) of the Act and Rule 22c-1 Under the Act

    4. Section 22(d) of the Act, among other things, prohibits a dealer
from selling a redeemable security that is currently being offered to
the public by or through an underwriter, except at a current public
offering price described in the prospectus. Rule 22c-1 under the Act
generally requires that a dealer selling, redeeming or repurchasing a
redeemable security do so only at a price based on its NAV. Applicants
state that 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. Thus, purchases and
sales of Shares in the secondary market will not comply with section
22(d) of the Act and rule 22c-1 under the Act. Applicants request an
exemption under section 6(c) from these provisions.
    5. Applicants assert that the concerns sought to be addressed by
section 22(d) of the Act and rule 22c-1 under the Act with respect to
pricing are equally satisfied by the proposed method of pricing Shares.
Applicants maintain that while there is little legislative history
regarding section 22(d), its provisions, as well as those of rule 22c-
1, appear to have been designed to (a) prevent dilution caused by
certain riskless-trading schemes by principal underwriters and contract
dealers, (b) prevent unjust discrimination or preferential treatment
among buyers, and (c) ensure an orderly distribution of investment
company shares by eliminating price competition from dealers offering
shares at less than the published sales price and repurchasing

shares at more than the published redemption price.
    6. Applicants believe that none of these purposes will be thwarted
by permitting Shares to trade in the secondary market at negotiated
prices. 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 contend that the price at which Shares
trade will be disciplined by arbitrage opportunities created by the
option continually to purchase or redeem Shares in Creation Units,
which should help prevent Shares from trading at a material discount or
premium in relation to their NAV.

Section 22(e)

    7. Section 22(e) of the Act generally prohibits a registered
investment company from suspending the right of redemption or
postponing the date of payment of redemption proceeds for more than
seven days after the tender of a security for redemption. Applicants
state that settlement of redemptions for Foreign Funds will be
contingent not only on the settlement cycle of the United States
market, but also on current delivery cycles in local markets for the
underlying foreign securities held by a Foreign Fund. Applicants state
that the delivery cycles currently practicable for transferring
Redemption Instruments to redeeming investors, coupled with local
market holiday schedules, may require a delivery process of up to
fourteen (14) calendar days. Accordingly, with respect to Foreign Funds
only, applicants hereby request relief under section 6(c) from the
requirement imposed by section 22(e) to allow Foreign Funds to pay
redemption proceeds within fourteen (14) calendar days following the
tender of Creation Units for redemption.\20\
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    \20\ Applicants acknowledge that no relief obtained from the
requirements of section 22(e) will affect any obligations applicants
may otherwise have under rule 15c6-1 under the Exchange Act
requiring that most securities transactions be settled within three
business days of the trade date.
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    8. Applicants believe that Congress adopted section 22(e) to
prevent unreasonable, undisclosed or unforeseen delays in the actual
payment of redemption proceeds. Applicants propose that allowing
redemption payments for Creation Units of a Foreign Fund to be made
within fourteen calendar days would not be inconsistent with the spirit
and intent of section 22(e). Applicants suggest that a redemption
payment occurring within fourteen calendar days following a redemption
request would adequately afford investor protection.
    9. Applicants are not seeking relief from section 22(e) with
respect to Foreign Funds that do not effect creations and redemptions
of Creation Units in-kind.

Section 12(d)(1)

    10. Section 12(d)(1)(A) of the Act prohibits a registered
investment company from acquiring securities of an investment company
if such 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 other broker-dealer from knowingly selling the investment company's
shares 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.
    11. Applicants request an exemption to permit registered management
investment companies and unit investment trusts (``UITs'') that are not
advised or sponsored by the Adviser and are not part of the same
``group of investment companies,'' as defined in section
12(d)(1)(G)(ii) of the Act as the Funds (such management investment
companies are referred to as ``Investing Management Companies,'' such
UITs are referred to as ``Investing Trusts,'' and Investing Management
Companies and Investing Trusts are collectively referred to as ``Funds
of Funds''), to acquire 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 registered under the Exchange Act, to sell Shares to
Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act.
    12. Each Investing Management Company will be advised by an
investment adviser within the meaning of section 2(a)(20)(A) of the Act
(the ``Fund of Funds Adviser'') and may be sub-advised by investment
advisers within the meaning of section 2(a)(20)(B) of the Act (each a
``Fund of Funds Sub-Adviser''). Any investment adviser to an Investing
Management Company will be registered under the Advisers Act. Each
Investing Trust will be sponsored by a sponsor (``Sponsor'').
    13. Applicants submit that the proposed conditions to the requested
relief adequately address the concerns underlying the limits in
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. Applicants believe that the
requested exemption is consistent with the public interest and the
protection of investors.
    14. Applicants believe that neither a Fund of Funds nor a Fund of
Funds Affiliate would be able to exert undue influence over a Fund.\21\
To limit the control that a Fund of Funds may have over a Fund,
applicants propose a condition prohibiting a Fund of Funds Adviser or
Sponsor, any person controlling, controlled by, or under common control
with a Fund of Funds Adviser or Sponsor, and any investment company and
any issuer that would be an investment company but for sections 3(c)(1)
or 3(c)(7) of the Act that is advised or sponsored by a Fund of Funds
Adviser or Sponsor, or any person controlling, controlled by, or under
common control with a Fund of Funds Adviser or Sponsor (``Fund of Funds
Advisory Group'') from controlling (individually or in the aggregate) a
Fund within the meaning of section 2(a)(9) of the Act. The same
prohibition would apply to any Fund of Funds Sub-Adviser, any person
controlling, controlled by or under common control with the Fund of
Funds Sub-Adviser, and any investment company or issuer that would be
an investment company but for sections 3(c)(1) or 3(c)(7) of the Act
(or portion of such investment company or issuer) advised or sponsored
by the Fund of Funds Sub-Adviser or any person controlling, controlled
by or under common control with the Fund of Funds Sub-Adviser (``Fund
of Funds Sub-Advisory Group'').
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    \21\ A ``Fund of Funds Affiliate'' is a Fund of Funds Adviser,
Fund of Funds Sub-Adviser, Sponsor, promoter, and principal
underwriter of a Fund of Funds, and any person controlling,
controlled by, or under common control with any of those entities. A
``Fund Affiliate'' is an investment adviser, promoter, or principal
underwriter of a Fund and any person controlling, controlled by or
under common control with any of these entities.
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    15. Applicants propose other conditions to limit the potential for
undue influence over the Funds,

including that no Fund of Funds or Fund of Funds Affiliate (except to
the extent it is acting in its capacity as an investment adviser to a
Fund) will cause a Fund to purchase a security in an offering of
securities during the existence of an underwriting or selling syndicate
of which a principal underwriter is an Underwriting Affiliate
(``Affiliated Underwriting''). An ``Underwriting Affiliate'' is a
principal underwriter in any underwriting or selling syndicate that is
an officer, director, member of an advisory board, Fund of Funds
Adviser, Fund of Funds Sub-Adviser, employee or Sponsor of the Fund of
Funds, or a person of which any such officer, director, member of an
advisory board, Fund of Funds Adviser or Fund of Funds Sub-Adviser,
employee or Sponsor is an affiliated person (except that any person
whose relationship to the Fund is covered by section 10(f) of the Act
is not an Underwriting Affiliate).
    16. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. The board of directors or trustees
of any Investing Management Company, including a majority of the
directors or trustees who are not ``interested persons'' within the
meaning of section 2(a)(19) of the Act (``disinterested directors or
trustees''), will find that the advisory fees charged under the
contract are based on services provided that will be in addition to,
rather than duplicative of, services provided under the advisory
contract of any Fund in which the Investing Management Company may
invest. In addition, under condition B.5., a Fund of Funds Adviser, or
a Fund of Funds' trustee or Sponsor, as applicable, will waive fees
otherwise payable to it by the Fund of Funds in an amount at least
equal to any compensation (including fees received pursuant to any plan
adopted by a Fund under rule 12b-1 under the Act) received from a Fund
by the Fund of Funds Adviser, trustee or Sponsor or an affiliated
person of the Fund of Funds Adviser, trustee or Sponsor, other than any
advisory fees paid to the Fund of Funds Adviser, trustee or Sponsor or
its affiliated person by a Fund, in connection with the investment by
the Fund of Funds in the Fund. Applicants state that any sales charges
and/or service fees charged with respect to shares of a Fund of Funds
will not exceed the limits applicable to a fund of funds as set forth
in NASD Conduct Rule 2830.\22\
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    \22\ Any references to NASD Conduct Rule 2830 include any
successor or replacement FINRA rule to NASD Conduct Rule 2830.
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    17. Applicants submit that the proposed arrangement will not create
an overly complex fund structure. Applicants note that no Fund will
acquire 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) of the Act, except to the extent permitted by
exemptive relief from the Commission permitting the Fund to purchase
shares of other investment companies for short-term cash management
purposes. To ensure a Fund of Funds is aware of the terms and
conditions of the requested order, the Fund of Funds will enter into an
agreement with the Fund (``FOF Participation Agreement''). The FOF
Participation Agreement will include an acknowledgement from the Fund
of Funds that it may rely on the order only to invest in the Funds and
not in any other investment company.
    18. Applicants also note that a Fund may choose to reject a direct
purchase of Shares in Creation Units by a Fund of Funds. To the extent
that a Fund of Funds purchases Shares in the secondary market, a Fund
would still retain its ability to reject any initial investment by a
Fund of Funds in excess of the limits of section 12(d)(1)(A) by
declining to enter into a FOF Participation Agreement with the Fund of
Funds.

Sections 17(a)(1) and (2) of the Act

    19. Sections 17(a)(1) and (2) of the Act generally prohibit an
affiliated person of a registered investment company, or an affiliated
person of such a person, from selling any security to or purchasing any
security from the company. Section 2(a)(3) of the Act defines
``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
the 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. Section 2(a)(9) of the Act defines ``control'' as the
power to exercise a controlling influence over the management or
policies of a company, and provides that a control relationship will be
presumed where one person owns more than 25% of a company's voting
securities. The Funds may be deemed to be controlled by the Adviser or
an entity controlling, controlled by or under common control with the
Adviser and hence affiliated persons of each other. In addition, the
Funds may be deemed to be under common control with any other
registered investment company (or series thereof) advised by an Adviser
or an entity controlling, controlled by or under common control with an
Adviser (an ``Affiliated Fund''). Any investor, including Market
Makers, owning 5% or holding in excess of 25% of the Trust or such
Funds, may be deemed affiliated persons of the Trust or such Funds. In
addition, an investor could own 5% or more, or in excess of 25% of the
outstanding shares of one or more Affiliated Funds making that investor
a Second-Tier Affiliate of the Funds.
    20. Applicants request an exemption from sections 17(a)(1) and
17(a)(2) of the Act pursuant to sections 6(c) and 17(b) of the Act to
permit persons that are Affiliated Persons of the Funds, or Second-Tier
Affiliates of the Funds, solely by virtue of one or more of the
following: (a) Holding 5% or more, or in excess of 25%, of the
outstanding Shares of one or more Funds; (b) an affiliation with a
person with an ownership interest described in (a); or (c) holding 5%
or more, or more than 25%, of the shares of one or more Affiliated
Funds, to effectuate purchases and redemptions ``in-kind.''
    21. Applicants assert that no useful purpose would be served by
prohibiting such affiliated persons from making ``in-kind'' purchases
or ``in-kind'' redemptions of Shares of a Fund in Creation Units. Both
the deposit procedures for ``in-kind'' purchases of Creation Units and
the redemption procedures for ``in-kind'' redemptions of Creation Units
will be effected in exactly the same manner for all purchases and
redemptions, regardless of size or number. There will be no
discrimination between purchasers or redeemers. Deposit Instruments and
Redemption Instruments for each Fund will be valued in the identical
manner as those Portfolio Holdings currently held by such Fund and the
valuation of the Deposit Instruments and Redemption Instruments will be
made in an identical manner regardless of the identity of the purchaser
or redeemer. Applicants do not believe that ``in-kind'' purchases and
redemptions will result in abusive self-dealing or overreaching, but
rather assert that such procedures will be implemented consistently
with each Fund's objectives and with the general purposes of the Act.
Applicants believe that ``in-kind'' purchases and redemptions will be
made on terms reasonable to applicants and any affiliated persons
because they will be valued pursuant to verifiable objective standards.
The method of valuing

Portfolio Holdings held by a Fund is identical to that used for
calculating ``in-kind'' purchase or redemption values and therefore
creates no opportunity for affiliated persons or Second-Tier Affiliates
of applicants to effect a transaction detrimental to the other holders
of Shares of that Fund. Similarly, applicants submit that, by using the
same standards for valuing Portfolio Holdings held by a Fund as are
used for calculating ``in-kind'' redemptions or purchases, the Fund
will ensure that its NAV will not be adversely affected by such
securities transactions. Applicants also note that the ability to take
deposits and make redemptions ``in-kind'' will help each Fund to track
closely its Underlying Index and therefore aid in achieving the Fund's
objectives.
    22. Applicants also seek relief under sections 6(c) and 17(b) from
section 17(a) to permit a Fund that is an affiliated person, or an
affiliated person of an affiliated person, of a Fund of Funds 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.\23\
Applicants state that the terms of the transactions are fair and
reasonable and do not involve overreaching. Applicants note that any
consideration paid by a Fund of Funds for the purchase or redemption of
Shares directly from a Fund will be based on the NAV of the Fund.\24\
Applicants believe that any proposed transactions directly between the
Funds and Funds of Funds will be consistent with the policies of each
Fund of Funds. The purchase of Creation Units by a Fund of Funds
directly from a Fund will be accomplished in accordance with the
investment restrictions of any such Fund of Funds and will be
consistent with the investment policies set forth in the Fund of Funds'
registration statement. Applicants also state that the proposed
transactions are consistent with the general purposes of the Act and
are appropriate in the public interest.
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    \23\ Although applicants believe that most Funds of Funds will
purchase Shares in the secondary market and will not purchase
Creation Units directly from a Fund, a Fund of Funds might seek to
transact in Creation Units directly with a Fund that is an
affiliated person of a Fund of Funds. To the extent that purchases
and sales of Shares occur in the secondary market and not through
principal transactions directly between a Fund of Funds and a Fund,
relief from section 17(a) would not be necessary. However, 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 an affiliated person of an
affiliated person 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.
    \24\ Applicants acknowledge that the receipt of compensation by
(a) an affiliated person of a Fund of Funds, or an affiliated person
of such person, for the purchase by the Fund of Funds of Shares of a
Fund or (b) an affiliated person of a Fund, or an affiliated person
of such person, for the sale by the Fund of its Shares to a Fund of
Funds, may be prohibited by section 17(e)(1) of the Act. The FOF
Participation Agreement also will include this acknowledgment.
---------------------------------------------------------------------------

Applicants' Conditions

    Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:

A. ETF Relief

    1. The requested relief will expire on the effective date of any
Commission rule under the Act that provides relief permitting the
operation of affiliated index-based ETFs.
    2. As long as a Fund operates in reliance on the requested order,
Shares of such Fund will be listed on an Exchange.
    3. Neither a Trust nor any Fund will be advertised or marketed as
an open-end investment company or a mutual fund. Any advertising
material that describes the purchase or sale of Creation Units or
refers to redeemability will prominently disclose that Shares are not
individually redeemable and that owners of Shares may acquire those
Shares from the Fund and tender those Shares for redemption to a Fund
in Creation Units only.
    4. The Web site, which is and will be publicly accessible at no
charge, will contain, on a per Share basis for each Fund, the prior
Business Day's NAV and the market closing price or the midpoint of the
bid/ask spread at the time of the calculation of such NAV (``Bid/Ask
Price''), and a calculation of the premium or discount of the market
closing price or Bid/Ask Price against such NAV.
    5. Each Fund will post on the Web site on each Business Day, before
commencement of trading of Shares on the Exchange, the Fund's Portfolio
Holdings.
    6. No Adviser or any Sub-Adviser to a Fund, directly or indirectly,
will cause any Authorized Participant (or any investor on whose behalf
an Authorized Participant may transact with the Fund) to acquire any
Deposit Instrument for the Fund through a transaction in which the Fund
could not engage directly.

B. Section 12(d)(1) Relief

    1. The members of a Fund of Funds' Advisory Group will not control
(individually or in the aggregate) a Fund within the meaning of section
2(a)(9) of the Act. The members of a Fund of Funds' Sub-Advisory Group
will not control (individually or in the aggregate) a 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 a Fund, the Fund of Funds'
Advisory Group or the Fund of Funds' Sub-Advisory Group, each in the
aggregate, becomes a holder of more than 25 percent of the outstanding
voting securities of a Fund, it will vote its Shares of the Fund in the
same proportion as the vote of all other holders of the Fund's Shares.
This condition does not apply to the Fund of Funds' Sub-Advisory Group
with respect to a Fund for which the Fund of Funds' Sub-Adviser or a
person controlling, controlled by or under common control with the Fund
of Funds' Sub-Adviser acts as the investment adviser within the meaning
of section 2(a)(20)(A) of the Act.
    2. No Fund of Funds or Fund of Funds Affiliate will cause any
existing or potential investment by the Fund of Funds in a Fund to
influence the terms of any services or transactions between the Fund of
Funds or Fund of Funds Affiliate and the Fund or a Fund Affiliate.
    3. The board of directors or trustees of an Investing Management
Company, including a majority of the disinterested directors or
trustees, will adopt procedures reasonably designed to ensure that the
Fund of Funds Adviser and Fund of Funds Sub-Adviser are conducting the
investment program of the Investing Management Company without taking
into account any consideration received by the Investing Management
Company or a Fund of Funds Affiliate from a Fund or Fund Affiliate in
connection with any services or transactions.
    4. Once an investment by a Fund of Funds in the securities of a
Fund exceeds the limits in section 12(d)(1)(A)(i) of the Act, the Board
of the Fund including a majority of the directors or trustees who are
not ``interested persons'' within the meaning of section 2(a)(19) of
the Act (``non-interested Board members''), will determine that any
consideration paid by the Fund to the Fund of Funds or a Fund of Funds
Affiliate in connection with any services or transactions: (i) Is fair
and reasonable in relation to the nature and quality of the services
and benefits received by the Fund; (ii) is within the range of
consideration that the Fund would be required to pay to another
unaffiliated entity in connection with the same services or
transactions; and (iii) does not involve overreaching on the part of
any person concerned.

This condition does not apply with respect to any services or
transactions between a Fund and its investment adviser(s), or any
person controlling, controlled by or under common control with such
investment adviser(s).
    5. The Fund of Funds Adviser, or trustee or Sponsor of an Investing
Trust, as applicable, will waive fees otherwise payable to it by the
Fund of Funds in an amount at least equal to any compensation
(including fees received pursuant to any plan adopted by a Fund under
rule 12b-l under the Act) received from a Fund by the Fund of Funds
Adviser, or trustee or Sponsor of the Investing Trust, or an affiliated
person of the Fund of Funds Adviser, or trustee or Sponsor of the
Investing Trust, other than any advisory fees paid to the Fund of Funds
Adviser, trustee or Sponsor of an Investing Trust, or its affiliated
person by the Fund in connection with the investment by the Fund of
Funds in the Fund. Any Fund of Funds Sub-Adviser will waive fees
otherwise payable to the Fund of Funds Sub-Adviser, directly or
indirectly, by the Investing Management Company in an amount at least
equal to any compensation received from a Fund by the Fund of Funds
Sub-Adviser, or an affiliated person of the Fund of Funds Sub-Adviser,
other than any advisory fees paid to the Fund of Funds Sub-Adviser or
its affiliated person by the Fund in connection with the investment by
the Investing Management Company in the Fund made at the direction of
the Fund of Funds Sub-Adviser. In the event that the Fund of Funds Sub-
Adviser waives fees, the benefit of the waiver will be passed through
to the Investing Management Company.
    6. No Fund of Funds or Fund of Funds Affiliate (except to the
extent it is acting in its capacity as an investment adviser to a Fund)
will cause a Fund to purchase a security in any Affiliated
Underwriting.
    7. The Board of a Fund, including a majority of the non-interested
Board members, will adopt procedures reasonably designed to monitor any
purchases of securities by the Fund in an Affiliated Underwriting, once
an investment by a Fund of Funds in the securities of the 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 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 Fund. The Board will consider, among other
things: (i) Whether the purchases were consistent with the investment
objectives and policies of the Fund; (ii) 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 (iii) whether the
amount of securities purchased by the Fund in Affiliated Underwritings
and the amount purchased directly from an Underwriting Affiliate have
changed significantly from prior years. The Board will take any
appropriate actions based on its review, including, if appropriate, the
institution of procedures designed to ensure that purchases of
securities in Affiliated Underwritings are in the best interest of
shareholders of the Fund.
    8. Each 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 in an Affiliated
Underwriting occurred, the first two years in an easily accessible
place, a written record of each purchase of securities in Affiliated
Underwritings once an investment by a Fund of Funds in the securities
of the 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 Board's determinations were
made.
    9. Before investing in a Fund in excess of the limit in section
12(d)(1)(A), a Fund of Funds and the relevant Trust will execute a FOF
Participation Agreement stating without limitation that their
respective boards of directors or trustees and their investment
advisers, or trustee and Sponsor, as applicable, understand the terms
and conditions of the order, and agree to fulfill their
responsibilities under the order. At the time of its investment in
Shares of a Fund in excess of the limit in section 12(d)(1)(A)(i), a
Fund of Funds will notify the Fund of the investment. At such time, the
Fund of Funds will also transmit to the Fund a list of the names of
each Fund of Funds Affiliate and Underwriting Affiliate. The Fund of
Funds will notify the Fund of any changes to the list of the names as
soon as reasonably practicable after a change occurs. The Fund and the
Fund of Funds will maintain and preserve a copy of the order, the FOF
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.
    10. Before approving any advisory contract under section 15 of the
Act, the board of directors or trustees of each Investing Management
Company, including a majority of the disinterested directors or
trustees, will find that the advisory fees charged under such contract
are based on services provided that will be in addition to, rather than
duplicative of, the services provided under the advisory contract(s) of
any Fund in which the Investing Management Company may invest. These
findings and their basis will be fully recorded in the minute books of
the appropriate Investing Management Company.
    11. Any sales charges and/or service fees charged with respect to
shares of a Fund of Funds will not exceed the limits applicable to a
fund of funds as set forth in NASD Conduct Rule 2830.
    12. No Fund will acquire securities of an 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 the Fund acquires securities of another investment company
pursuant to exemptive relief from the Commission permitting the Fund to
acquire securities of one or more investment companies for short-term
cash management purposes.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-27907 Filed 11-2-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: August 14, 2009 (Volume 74, Number 156)]
[Rules and Regulations]
[Page 41045-41047]
[DOCID:fr14au09-7]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2009-0524]
RIN 1625-AA00

Safety Zone; MS Harborfest Tugboat Races in Casco Bay, ME

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a temporary safety zone for
the MS Harborfest Tugboat Races in Casco Bay, Maine. This temporary
safety zone is necessary to provide for the safety of life on the
navigable waters by prohibiting spectators, vessels, and other users of
the waterway from entering the area surrounding the tugboat races due
to the hazards associated with the tugboat races.

DATES: This rule is effective from 11 a.m. until 4 p.m. on August 16,
2009.

ADDRESSES: Documents indicated in this preamble as being available in
the docket are part of docket USCG-2009-0524 and are available online
by going to http://www.regulations.gov, selecting the Advanced Docket
Search option on the right side of the screen, inserting USCG-2009-0524
in the ``Keyword'' box, and then clicking ``Search.'' They are also
available for inspection or copying at the Docket Management Facility
(M-30), U.S. Department of Transportation, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary rule, call or e-mail Chief Petty Officer Randy Bucklin, Coast
Guard Sector Northern New England, Waterways Management Division;
telephone<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>If you have
questions on viewing the docket, call Renee V. Wright, Program Manager,
Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Regulatory Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because a notice and comment period would be
impracticable due to the time constraints resulting from the immediacy
of the upcoming event. The Coast Guard did not receive notification of
the exact location or proposed date for the boating event in sufficient
time

to issue a NPRM and hold a comment period for this rulemaking. The
expeditious implementation of this rule is in the public interest
because it will help ensure the safety of those involved in the tugboat
races, the spectators, and users of the waterway during the boating
event. Finally, a delay or cancellation of the tugboat races in order
to accommodate a notice and comment period is contrary to the public's
interest in this event occurring as scheduled.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Any delay in the effective date of
this regulation would be contrary to the public interest as immediate
action is necessary to protect the maritime community from the hazards
associated with tugboat races. A delay or cancellation of the MS
Harborfest tugboat races to accommodate a 30 day comment period would
be contrary to public interest.

Background and Purpose

    The MS Harborfest is an annual marine boating event held in the
month of August, in Casco Bay, Maine.
    These regulations will establish a fixed safety zone around the
perimeter of the tugboat race course located in Casco Bay. The tugboat
race involves several heavy vessels that are limited in their ability
to quickly maneuver if an unexpected vessel were to enter the race
area. Hazards also include the potential risks to persons and property
that could come in contact with the tugboats, their wakes, or their
gear. There is also a potential risk to the tugboats and their crew
should they come into contact with unauthorized vessels traversing
through the safety zone. Therefore this safety zone is designed to
protect spectators and vessels from the hazards associated with the
tugboat races, and to protect the race participants from the dangers of
nearby vessel traffic by preventing entry into the zone during the
enforcement time. Entry into the safety zone is prohibited unless prior
authorization is received by the Coast Guard Captain of the Port Sector
Northern New England.

Discussion of Rule

    The Coast Guard is establishing a safety zone for the MS Harborfest
Tugboat Races. The safety zone is being established by reference to
geographical coordinates as follows: All navigable waters of Casco Bay
bounded by a line connecting the following geographic coordinates:
Latitude 43[deg]40'24'' N, longitude 070[deg]14'20'' W, to latitude
43[deg]40'36'' N, longitude 070[deg]13'56'' W, to latitude
43[deg]39'58'' N, longitude 070[deg]13'21'' W, to latitude
43[deg]39'46'' N, longitude 070[deg]13'51'' W.
    During the effective time of the safety zone, all vessels and
persons are prohibited from entering, anchoring, remaining within or
transiting in the zone unless specifically authorized by the Captain of
the Port Sector Northern New England, or his designated
representatives.
    The Coast Guard has determined that the safety zone will not have a
significant impact on commercial vessel traffic due to the temporary
nature of the zone's time and scope. The zone has been limited to the
area surrounding the event and it will be enforced only during the time
of the tugboat races. Public notifications will be made via marine
information broadcasts during the effective period of this safety zone.

Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on 13 of these statutes or executive orders.

Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, and does not
require an assessment of potential costs and benefits under section
6(a)(3) of that Order. The Office of Management and Budget has not
reviewed it under that Order.
    The Coast Guard determined that this rule is not a significant
regulatory action for the following reasons: The safety zone will be of
limited duration, cover only a small portion of the navigable waterway,
and the event is designed to avoid, to the extent practicable, deep
draft, fishing, and recreational boating traffic routes. In addition,
vessels may be authorized to transit the zone with permission of the
Captain of the Port Sector Northern New England and maritime advisories
will be broadcast during the duration of the enforcement periods.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. The term ``small entities''
comprises small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with populations of less than 50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact on a substantial number of small
entities. This rule will affect the following entities, some of which
may be small entities: The owners or operators of vessels intending to
transit or anchor in the designated safety zone during the enforcement
period stated above.
    The safety zone will not have a significant economic impact on a
substantial number of small entities for the following reasons: The
safety zone is of limited size and of short duration and vessels that
can safely do so may navigate in all other portions of the waterway
except for the area designated as a safety zone. Additionally, before
the enforcement period, the Coast Guard will issue maritime advisories
via marine broadcasts and advisories.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small
entities in understanding the rule so that they can better evaluate its
effects on them and participate in the rulemaking process.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations, to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this rule under
that Order and have determined that it does not have implications for
federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 or more in any
one year. Though this rule will not result in such an expenditure, we
do discuss the effects of this rule elsewhere in this preamble.

Taking of Private Property

    This rule will not effect a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b) (2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through the Office of Management and Budget, with an explanation of why
using these standards would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) that are developed or adopted by voluntary consensus
standards bodies.
    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded
this action is one of a category of actions which do not individually
or cumulatively have a significant effect on the human environment.
This rule is categorically excluded, under figure 2-1, paragraph
(34)(g), of the Instruction. This rule involves the establishment of a
safety zone. An environmental analysis checklist and a categorical
exclusion determination will be available for review in the docket
where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, and Waterways.

0
For the reasons discussed in the preamble, the Coast Guard amends 33
CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  33 U.S.C. 1226, 1231; 46 U.S.C. 701, 3306, 3703; 50
U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Public Law
107-295, 116 Stat. 2064; Department of Homeland Security Delegation
No. 0170.1.

0
2. Add Sec.  165.T01-0524 to read as follows:

Sec.  165.T01-0524  Safety Zone; MS Harborfest Tugboat Races in Casco
Bay, ME.

    (a) Location: all navigable waters of Casco Bay in the vicinity of
Fish Point and Diamond Island Ledge that are bounded by a line
connecting the following geographic coordinates: Latitude
43[deg]40'24'' N, longitude 070[deg]14'20'' W, to latitude
43[deg]40'36'' N, longitude 070[deg]13'56'' W, to latitude
43[deg]39'58'' N, longitude 070[deg]13'21'' W, to latitude
43[deg]39'46'' N, longitude 070[deg]13'51'' W.
    (b) Effective Period: This Safety Zone is effective on August 16,
2009, from 11 a.m. to 4 p.m.
    (c) Regulations.
    (1) The general regulations in 33 CFR 165.23 apply.
    (2) This safety zone is closed to all vessel traffic. Entry into,
transiting, remaining within or anchoring in this safety zone is
prohibited unless authorized by the Captain of the Port Sector Northern
New England or his designated representatives.
    (3) The ``designated representative'' is any Coast Guard
commissioned, warrant, or petty officer who has been designated by the
Captain of the Port Sector Northern New England to act on his behalf.
The designated representative will be aboard either a Coast Guard or
Coast Guard Auxiliary vessel.
    (4) Vessel operators desiring to enter or operate within the safety
zones shall contact the Captain of the Port Sector Northern New England
or his designated representative via VHF Channel 16 to obtain
permission to do so.
    (5) Vessel operators given permission to enter or operate in the
safety zones must comply with all directions given to them by the
Captain of the Port Sector Northern New England or his designated
representatives.

    Dated: August 4, 2009.
J.B. McPherson,
Captain, U.S. Coast Guard, Captain of the Port, Sector Northern New
England.
[FR Doc. E9-19549 Filed 8-13-09; 8:45 am]

BILLING CODE 4910-15-P


[Federal Register Volume 79, Number 74 (Thursday, April 17, 2014)]
[Notices]
[Pages 21831-21832]
[FR Doc No: 2014-08765]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Notice of Applications for Certificates of Public Convenience and
Necessity and Foreign Air Carrier Permits Filed Under Subpart B
(Formerly Subpart Q) During the Week Ending April 5, 2014

    The following Applications for Certificates of Public Convenience
and Necessity and Foreign Air Carrier Permits were filed under Subpart
B (formerly Subpart Q) of the Department of Transportation's Procedural
Regulations (See 14 CFR 301.201 et. seq.). The due date for Answers,
Conforming Applications, or Motions to Modify Scope are set forth below
for each application. Following the Answer period DOT may process the
application by expedited procedures. Such procedures may consist of the
adoption of a show-cause order, a tentative order, or in appropriate
cases a final order without further proceedings.
    Docket Number: DOT-OST-2014-0046.
    Date Filed: April 2, 2014.
    Due Date for Answers, Conforming Applications, or Motion To Modify
Scope: April 23, 2014.
    Description: Application of Eurolot S.A. (``Eurolot'') requesting a
foreign air carrier permit to enable Eurolot, consistent with the open
skies, U.S.- European Union (``EU'') Air Transport Agreement, to
provide: (i) Foreign scheduled and charter air transportation of
persons, property, and mail from any point or points behind any Member
State of the European Union, via any point or points in any Member
State and via intermediate points to any point or points in the United
States and beyond;

(ii) foreign scheduled and charter air transportation of persons,
property, and mail between any point or points in the United States and
any point or points in any member of the European Common Aviation Area;
(iii) foreign scheduled and charter cargo air transportation between
any point or points in the United States and any other point or points;
(iv) other charters pursuant to the prior approval requirements; (v)
and transportation authorized by any additional route rights made
available to European Union carriers in the future. Eurolot also
requests: (i) Exemption authority, to the extent necessary and for an
initial period of two years or until the requested permit is issued, to
enable it to hold out and provide the service described above; and (ii)
such additional or other relief as the Department may deem necessary or
appropriate.
    Docket Number: DOT-OST-2014-0050.
    Date Filed: April 4, 2014.
    Due Date for Answers, Conforming Applications, or Motion To Modify
Scope: April 25, 2014.
    Description: Application of Compania de Servicios de Transporte
Aereo Amaszonas S.A. requesting a foreign air carrier permit to engage
in charter air transportation from Viru Viru International to Miami
International as well as other destinations within the United States.

Barbara J. Hairston,
Supervisory Dockets Officer, Docket Operations, Federal Register
Liaison.
[FR Doc. 2014-08765 Filed 4-16-14; 8:45 am]
BILLING CODE 4910-9X-P