[Federal Register Volume 72, Number 220 (Thursday, November 15, 2007)]
[Notices]
[Pages 64253-64255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22204]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28045; 812-12984]


BTOP50 Managed Futures Fund and Asset Alliance Advisors, Inc.; 
Notice of Application

November 8, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under section 6(c) of the 
Investment Company Act of 1940 (``Act'') for an exemption from sections 
18(c) and 18(i) of the Act.

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Summary of Application: Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of shares.

Applicants: BTOP50 Managed Futures Fund (``Trust'') and Asset Alliance 
Advisors, Inc. (``Advisor'').

Filing Dates: The application was filed on June 9, 2003 and amended on 
December 9, 2003 and November 6, 2007.

Hearing or Notification of Hearing: An order granting the requested 
relief will

[[Page 64254]]

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 
December 3, 2007, and should be accompanied by proof of service on 
applicants, in the form of an affidavit or, for lawyers, a certificate 
of service. Hearing requests should state the nature of the writer's 
interest, the reason for the request, and the issues contested. Persons 
who wish to be notified of a hearing may request notification by 
writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants, 800 Third Avenue, 
New York, NY 10022.

FOR FURTHER INFORMATION CONTACT: Julia Kim Gilmer, Branch Chief, or 
Nadya B. Roytblat, Assistant Director, at (202) 551-6821 (Division of 
Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
Commission's Public Reference Desk, 100 F Street, NE., Washington, DC 
20549-0102 (tel. 202-551-5850).

Applicants' Representations

    1. The Trust is a closed-end management investment company 
registered under the Act and organized as a Delaware statutory trust. 
After the completion of its initial offering, the Trust expects to 
continuously offer its shares to the public pursuant to rule 415 under 
the Securities Act of 1933 at net asset value plus any applicable sales 
charge. The Advisor is registered as an investment adviser under the 
Investment Advisers Act of 1940 and serves as investment adviser to the 
Trust. Applicants request that the requested relief also extend to any 
other registered closed-end management investment companies that 
continuously offer their shares that now or in the future are advised 
by the Advisor, or any entity controlling, controlled by or under 
common control with the Adviser (such investment companies, together 
with the Trust, the ``Funds'').\1\
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    \1\ Any Fund relying on this relief in the future will comply 
with the terms and conditions of the application. The Trust is the 
only investment company that currently intends to rely on the 
requested order.
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    2. The shares of the Trust will not be listed on any national stock 
exchange and the Trust will not arrange for the quotation of its shares 
on any over-the-counter market. The Trust does not expect that any 
secondary market will develop for its shares. The Trust intends to make 
monthly repurchase offers for up to 15% of its outstanding shares at 
net asset value, up to a maximum of 25% in any three consecutive 
months, pursuant to rule 13e-4 of the Securities Exchange Act of 1934.
    3. The Funds seek the flexibility to be structured as multiple 
class funds.The Trust intends to initially offer a single class of 
shares (``Class A Shares'') without a service fee or an early 
withdrawal charge (``EWC''). If the requested relief is granted, the 
Trust may also offer Class B, C, D and E shares with an annual service 
fee of 2%, 1.5%, 1% and .5% of net asset value, respectively. Class B, 
C, D and E shares also will be subject to an EWC of 2%, 1.5%. 1% and 
.5% of the purchase price, which will decline over approximately a 12-
month period. The Funds will not waive, schedule a variation in or 
eliminate any EWCs established for a particular class of shares. The 
Funds may in the future offer additional classes of shares and/or 
another sales charge structure.
    4. Applicants represent that any asset-based service and 
distribution fees will comply with the provisions of rule 2830(d) of 
the Conduct Rules of the National Association of Securities Dealers, 
Inc. (``NASD''). 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 disclose any arrangements that result in breakpoints in or 
elimination of sales loads in its prospectus.\2\ Each Fund and 
principal underwriter of Fund shares will also comply with any 
requirements that may be adopted by the Commission 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 and the principal underwriter of the Fund's shares.\3 \
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    \2\ 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).
    \3\ Confirmation Requirements and Point of Sale Disclosure 
Requirements for Transactions in Certain Mutual Funds and Other 
Securities, and Other Confirmation Requirement Amendments, and 
Amendments to the Registration Form for Mutual Funds, Investment 
Company Act Release Nos. 26341 (Jan. 29, 2004) (proposing release) 
and 26778 (Feb. 28, 2005) (re-opening the comment period for the 
proposed rules and requesting additional comments).
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    5. The Trust will allocate all expenses incurred by it among the 
various classes of shares based on the net assets of the Trust 
attributable to each class, except that the net asset value and 
expenses of each class will reflect the expenses associated with the 
service and/or distribution plan of the class and any other incremental 
expenses of that class. Expenses of the Trust 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 that rule applied to 
the Funds. The Funds will not offer exchange privileges.

Applicants' Legal Analysis

    1. 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).
    2. 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 permitting 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.
    3. 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 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)

[[Page 64255]]

from sections 18(c) and 18(i) to permit the Funds to issue multiple 
classes of shares.
    4. Applicants submit that the proposed allocation of expenses and 
voting rights among multiple classes is equitable and will not 
discriminate against any group of shareholders. Applicants submit that 
the proposed arrangements would permit a Fund to facilitate the 
distribution of its shares 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.
    5. Applicants also state that because the Funds, like open-end 
investment companies, will continuously offer their shares and offer 
investors a variety of distribution channels and service fees, they 
will comply with rule 12b-1 and 6c-10 under the Act as if those rules 
applied to the Funds.

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 and 18f-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 NASD Conduct Rule 2830(d), 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.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-22204 Filed 11-14-07; 8:45 am]
BILLING CODE 8011-01-P