[Federal Register Volume 78, Number 154 (Friday, August 9, 2013)]
[Notices]
[Pages 48729-48732]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19267]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30640; File No. 812-14155]


Aspiriant Global Equity Trust and Aspiriant, LLC; Notice of 
Application

August 5, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from section 15(a) of 
the Act and rule 18f-2 under the Act, as well as from certain 
disclosure requirements.

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Summary of Application: Applicants request an order that would permit 
them to enter into and materially amend sub-advisory agreements without 
shareholder approval and would grant relief from certain disclosure 
requirements.

Applicants: Aspiriant Global Equity Trust (the ``Trust'') and 
Aspiriant, LLC (the ``Adviser'').

DATES: Filing Dates: The application was filed on May 14, 2013, and 
amended on August 2, 2013.

Hearing or Notification of Hearing:  An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on August 30, 2013, and should be accompanied by proof of service 
on the 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: 
Aspiriant, LLC, 11100 Santa Monica Blvd., Suite 600, Los Angeles, CA, 
90025.

FOR FURTHER INFORMATION CONTACT: Janet M. Grossnickle, Assistant 
Director,

[[Page 48730]]

at (202) 551-6821 (Division of Investment Management, Exemptive 
Applications 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 an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Trust is organized as a Delaware statutory trust and is 
registered under the Act as an open-end management investment company. 
The Trust is currently composed of one series (a ``Fund'').\1\
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    \1\ Applicants also request relief with respect to all existing 
or future series of the Trust and any other existing or future 
registered open-end management investment company or series thereof 
that (a) is advised by the Adviser or an entity controlling, 
controlled by, or under common control with the Adviser or its 
successors (each such entity included in the term ``Adviser''); (b) 
uses the multi-manager structure described in the application; and 
(c) complies with the terms and conditions of the application 
(included in the term ``Funds''). Every existing entity that 
currently intends to rely on the requested order is named as an 
applicant. For purposes of the requested order, ``successor'' is 
limited to an entity or entities that result from a reorganization 
into another jurisdiction or a change in the type of business 
organization. If the name of any Fund contains the name of a Sub-
Adviser (as defined below), the name of the Adviser, or a trademark 
or trade name that is owned by the Adviser, will precede the name of 
the Sub-Adviser.
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    2. The Adviser, a Delaware limited liability company, is registered 
as an investment adviser under the Investment Advisers Act of 1940 (the 
``Advisers Act''). The Adviser serves as the investment adviser to the 
Fund pursuant to an investment advisory agreement with the Trust (the 
``Advisory Agreement''). The Advisory Agreement was approved by the 
Trust's board of trustees (the ``Board''),\2\ including a majority of 
the trustees who are not ``interested persons,'' as defined in section 
2(a)(19) of the Act (the ``Independent Trustees''), and by the initial 
shareholder of the Fund in the manner required by sections 15(a) and 
15(c) of the Act and rule 18f-2 thereunder. Applicants are not seeking 
any exemptions from the provisions of the Act with respect to the 
Advisory Agreement.
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    \2\ The term ``Board'' also includes the board of trustees or 
directors of a future Trust and future Fund, if different.
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    3. Under the terms of the Advisory Agreement, the Adviser, subject 
to the oversight of the Board, manages the investment operations and 
determines the composition of the portfolio of the Fund, including the 
purchase, retention, and disposition of the securities and other 
instruments held by the Fund, and the portion, if any, of the assets of 
the Fund to be held uninvested, in accordance with the Fund's current 
investment objectives, policies, and restrictions. For the services 
that it provides to the Fund, the Adviser receives a fee from the Fund 
as specified in the Advisory Agreement computed as a percentage of the 
Fund's average daily net assets. The Advisory Agreement also authorizes 
the Adviser to retain one or more Sub-Advisers, subject to the approval 
of the Board, including a majority of the Independent Trustees, and the 
shareholders of the Fund (if required by applicable law), for the 
performance of any of the services for which the Adviser is responsible 
under the Advisory Agreement. The Adviser has entered into sub-advisory 
agreements (``Sub-Advisory Agreements'') with various Sub-Advisers to 
provide investment advisory services to the Fund.\3\ Each Sub-Adviser 
is, and each future Sub-Adviser will be, an ``investment adviser,'' as 
defined in section 2(a)(20)(B) of the Act, and is registered, or will 
register, as an investment adviser under the Advisers Act, or not 
subject to such registration. The Adviser will evaluate, select and 
recommend Sub-Advisers to the Board, monitor and evaluate each Sub-
Adviser's investment program and results, and review each Fund's 
compliance with its investment objective, policies and restrictions. 
The Adviser also will recommend to the Board whether Sub-Advisory 
Agreements should be renewed, modified or terminated. The Adviser 
compensates each Sub-Adviser out of the fee paid by a Fund to the 
Adviser under the Advisory Agreement.
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    \3\ All existing Sub-Advisory Agreements comply with sections 
15(a) and (c) of the Act and rule 18f-2 thereunder. Currently, the 
Adviser has entered into Sub-Advisory Agreements with the following 
Sub-Advisers: AQR Capital Management, LLC, Dimensional Fund Advisors 
LP, and Parametric Risk Advisors LLC.
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    4. Applicants request an order to permit the Adviser, subject to 
Board approval, to engage Sub-Advisers to manage all or a portion of 
the assets of a Fund pursuant to a Sub-Advisory Agreement and 
materially amend Sub-Advisory Agreements without obtaining shareholder 
approval. The requested relief will not extend to any sub-adviser that 
is an ``affiliated person,'' as defined in section 2(a)(3) of the Act, 
of a Fund or the Adviser, other than by reason of serving as sub-
adviser to a Fund (``Affiliated Sub-Adviser'').
    5. Applicants also request an order exempting each Fund from 
certain disclosure provisions described below that may require the 
Funds to disclose fees paid by the Adviser to each Sub-Adviser. 
Applicants seek an order to permit each Fund to disclose (as a dollar 
amount and a percentage of a Fund's net assets) only: (a) The aggregate 
fees paid to the Adviser and any Affiliated Sub-Adviser; and (b) the 
aggregate fees paid to Sub-Advisers other than Affiliated Sub-Advisers 
(collectively, the ``Aggregate Fee Disclosure''). A Fund that employs 
an Affiliated Sub-Adviser will provide separate disclosure of any fees 
paid to the Affiliated Sub-Adviser.
    6. The Funds will inform shareholders of the hiring of a new Sub-
Adviser pursuant to the following procedures (``Modified Notice and 
Access Procedures''): (a) Within 90 days after a new Sub-Adviser is 
hired for any Fund, that Fund will send its shareholders either a 
Multi-manager Notice or a Multi-manager Notice and Multi-manager 
Information Statement; \4\ and (b) the Fund will make the Multi-manager 
Information Statement available on the Web site identified in the 
Multi-manager Notice no later than when the Multi-manager Notice (or 
Multi-manager Notice and Multi-manager Information Statement) is first 
sent to shareholders, and will maintain it on that Web site for at 
least 90 days.
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    \4\ A ``Multi-manager Notice'' will be modeled on a Notice of 
Internet Availability as defined in rule 14a-16 under the Securities 
Exchange Act of 1934 (``Exchange Act''), and specifically will, 
among other things: (a) Summarize the relevant information regarding 
the new Sub-Adviser; (b) inform shareholders that the Multi-manager 
Information Statement is available on a Web site; (c) provide the 
Web site address; (d) state the time period during which the Multi-
manager Information Statement will remain available on that Web 
site; (e) provide instructions for accessing and printing the Multi-
manager Information Statement; and (f) instruct the shareholder that 
a paper or email copy of the Multi manager Information Statement may 
be obtained, without charge, by contacting the Funds. A ``Multi-
manager Information Statement'' will meet the requirements of 
Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the 
Exchange Act for an information statement, except as modified by the 
requested order to permit Aggregate Fee Disclosure. Multi-manager 
Information Statements will be filed electronically with the 
Commission via the EDGAR system.
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Applicants' Legal Analysis

    1. Section 15(a) of the Act provides, in relevant part, that it is 
unlawful for any person to act as an investment adviser to a registered 
investment company except pursuant to a written contract that has been 
approved by the vote of a majority of the company's outstanding voting 
securities. Rule 18f-2 under the Act provides that each series or class 
of stock in a series investment company affected by a matter must 
approve that matter if the Act requires shareholder approval.

[[Page 48731]]

    2. Form N-1A is the registration statement used by open-end 
investment companies. Item 19(a)(3) of Form N-1A requires disclosure of 
the method and amount of the investment adviser's compensation.
    3. Rule 20a-1 under the Act requires proxies solicited with respect 
to a registered investment company to comply with Schedule 14A under 
the Exchange Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 
22(c)(9) of Schedule 14A, taken together, require a proxy statement for 
a shareholder meeting at which the advisory contract will be voted upon 
to include the ``rate of compensation of the investment adviser,'' the 
``aggregate amount of the investment adviser's fees,'' a description of 
the ``terms of the contract to be acted upon,'' and, if a change in the 
advisory fee is proposed, the existing and proposed fees and the 
difference between the two fees.
    4. Regulation S-X sets forth the requirements for financial 
statements required to be included as part of a registered investment 
company's registration statement and shareholder reports filed with the 
Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require 
a registered investment company to include in its financial statement 
information about the investment advisory fees.
    5. 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 thereunder, if such exemption is necessary or appropriate 
in the public interest and consistent with the protection of investors 
and the purposes fairly intended by the policy and provisions of the 
Act. Applicants state that the requested relief meets this standard for 
the reasons discussed below.
    6. Applicants assert that the shareholders expect the Adviser, 
subject to the review and approval of the Board, to select the Sub-
Advisers who are best suited to achieve the Fund's investment 
objective. Applicants assert that, from the perspective of the 
shareholder, the role of the Sub-Adviser is substantially equivalent to 
the role of the individual portfolio managers employed by traditional 
investment company advisory firms. Applicants state that requiring 
shareholder approval of each Sub-Advisory Agreement would impose 
unnecessary delays and expenses on the Funds, and may preclude the Fund 
from acting promptly when the Board and the Adviser believe that a 
change would benefit a Fund and its shareholders. Applicants note that 
the Advisory Agreement and any sub-advisory agreement with an 
Affiliated Sub-Adviser (if any) will continue to be subject to the 
shareholder approval requirements of section 15(a) of the Act and rule 
18f-2 under the Act.
    7. Applicants assert that the requested disclosure relief would 
benefit shareholders of the Funds because it would improve the 
Adviser's ability to negotiate the fees paid to Sub-Advisers. 
Applicants state that the Adviser may be able to negotiate rates that 
are below a Sub-Adviser's ``posted'' amounts, if the Adviser is not 
required to disclose the Sub-Advisers' fees to the public. Applicants 
submit that the requested relief will encourage Sub-Advisers to 
negotiate lower Sub-Advisory fees with the Adviser if the lower fees 
are not required to be made public.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions: \5\
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    \5\ Applicants will only comply with conditions 9, 10, 11, and 
12 if they rely on the fee disclosure relief that would allow them 
to provide Aggregate Fee Disclosure.
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    1. Before a Fund may rely on the order, the operation of the Fund 
in the manner described in the application will be approved by a 
majority of the Fund's outstanding voting securities, as defined in the 
Act, or, in the case of a Fund whose public shareholders purchase 
shares on the basis of a prospectus containing the disclosure 
contemplated by condition 2 below, by the initial shareholder(s) before 
offering the Fund's shares to the public.
    2. Each Fund relying on the order will disclose in its prospectus 
the existence, substance, and effect of the order granted pursuant to 
this application. Each Fund relying on the order will hold itself out 
to the public as utilizing the manager of managers structure described 
in the application. The prospectus will prominently disclose that the 
Adviser has ultimate responsibility (subject to oversight by the Board) 
to oversee the Sub-Advisers and recommend their hiring, termination, 
and replacement.
    3. Each Fund will inform shareholders of the hiring of a new Sub-
Adviser within 90 days after the hiring of the new Sub-Adviser pursuant 
to the Modified Notice and Access Procedures.
    4. The Adviser will not enter into a sub-advisory agreement with 
any Affiliated Sub-Adviser without such agreement, including the 
compensation to be paid thereunder, being approved by the shareholders 
of the applicable Fund.
    5. At all times, at least a majority of the Board will be 
Independent Trustees, and the nomination of new or additional 
Independent Trustees will be at the discretion of the then-existing 
Independent Trustees.
    6. Whenever a sub-adviser change is proposed for a Fund with an 
Affiliated Sub-Adviser, the Board, including a majority of the 
Independent Trustees, will make a separate finding, reflected in the 
applicable Board minutes, that such change is in the best interests of 
the Fund and its shareholders, and does not involve a conflict of 
interest from which the Adviser or an Affiliated Sub-Adviser derives an 
inappropriate advantage.
    7. The Adviser will provide general management services to each 
Fund relying on the order, including overall supervisory responsibility 
for the general management and investment of the Fund's assets and, 
subject to review and approval by the Board, will: (a) Set each Fund's 
overall investment strategies; (b) evaluate, select and recommend Sub-
Advisers to manage all or a portion of a Fund's assets; (c) allocate 
and, when appropriate, reallocate the Fund's assets among multiple Sub-
Advisers; (d) monitor and evaluate the Sub-Advisers' performance; and 
(e) implement procedures reasonably designed to ensure that Sub-
Adviser(s) comply with the relevant Fund's investment objectives, 
policies and restrictions.
    8. No trustee or officer of a Fund relying on the order, or 
director, manager, or officer of the Adviser will own directly or 
indirectly (other than through a pooled investment vehicle that is not 
controlled by such person) any interest in a Sub-Adviser except for (a) 
ownership of interests in the Adviser or any entity that controls, is 
controlled by, or is under common control with the Adviser; or (b) 
ownership of less than 1% of the outstanding securities of any class of 
equity or debt of a publicly traded company that is either a Sub-
Adviser or an entity that controls, is controlled by or is under common 
control with a Sub-Adviser.
    9. Each Fund relying on the order will disclose in its registration 
statement the Aggregate Fee Disclosure.
    10. Independent legal counsel, as defined in rule 0-1(a)(6) under 
the Act, will be engaged to represent the Independent Trustees. The 
selection of such counsel will be within the discretion of the then-
existing Independent Trustees.
    11. The Adviser will provide the Board, no less frequently than 
quarterly, with information about the profitability of the Adviser on a 
per-Fund basis for

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each Fund relying on the order. The information will reflect the impact 
on profitability of the hiring or termination of any Sub-Adviser during 
the applicable quarter.
    12. Whenever a Sub-Adviser is hired or terminated, the Adviser will 
provide the Board with information showing the expected impact on the 
profitability of the Adviser.
    13. In the event the Commission adopts a rule under the Act 
providing substantially similar relief to that requested in the 
application, the requested order will expire on the effective date of 
that rule.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19267 Filed 8-8-13; 8:45 am]
BILLING CODE 8011-01-P