[Federal Register Volume 84, Number 38 (Tuesday, February 26, 2019)]
[Notices]
[Pages 6183-6184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03311]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 33379; 812-14881]
Monteagle Funds and Nashville Capital Corporation
February 21, 2019.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
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Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``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 in rule 20a-1 under the Act, Item 19(a)(3) of
Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
Schedule 14A under the Securities Exchange Act of 1934, and sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements'').
The requested
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exemption would permit an investment adviser to hire and replace
certain subadvisers without shareholder approval and grant relief from
the Disclosure Requirements as they relate to fees paid to the
subadvisers.
Applicants: Monteagle Funds (the ``Trust''), a Delaware statutory
trust registered under the Act as an open-end management investment
company, and Nashville Capital Corporation (the ``Adviser''), a
Tennessee corporation registered as an investment adviser under the
Investment Advisers Act of 1940 (collectively with the Trust, the
``Applicants'').
Filing Dates: The application was filed on February 27, 2018 and
amended on June 11, 2018, October 23, 2018, and December 21, 2018.
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 March 18, 2019, and should be accompanied by proof of service on the
Applicants, in the form of an affidavit or, for lawyers, a certificate
of service. Pursuant to rule 0-5 under the Act, hearing requests should
state the nature of the writer's interest, any facts bearing upon the
desirability of a hearing on the matter, the reason for the request,
and the issues contested. Persons who wish to be notified of a hearing
may request notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE, Washington, DC 20549-1090. Applicants: Monteagle Funds, 8000
Town Centre Drive, Suite 400, Broadview Heights, OH 44147; Nashville
Capital Corporation, 2506 Winford Avenue, Nashville, TN 37211.
FOR FURTHER INFORMATION CONTACT: Zeena Abdul-Rahman, Senior Counsel, at
(202) 551-4099, or Andrea Ottomanelli Magovern, Branch Chief, at (202)
551-6821 (Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's website by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Summary of the Application
1. The Adviser will serve as the investment adviser to the Funds
pursuant to an investment advisory agreement with the Trust (the
``Advisory Agreement'').\1\ The Adviser will provide each Fund with
overall investment management services and will continuously review,
supervise and administer each Fund's investment program, subject to the
supervision of, and policies established by, each Fund's board of
trustees (``Board''). The Advisory Agreement permits the Adviser,
subject to the approval of the Board, to delegate to one or more
subadvisers (each, a ``Subadviser'' and collectively, the
``Subadvisers'') the responsibility to provide the day-to-day portfolio
investment management of each Fund, subject to the supervision and
direction of the Adviser.\2\ The primary responsibility for managing
the Funds will remain vested in the Adviser. The Adviser will hire,
evaluate, allocate assets to and oversee the Subadvisers, including
determining whether a Subadviser should be terminated, at all times
subject to the authority of the Board.
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\1\ Applicants request relief with respect to any existing or
future series of the Trust or any other registered open-end
management company that: (a) Is advised by the Adviser, or any
person controlling, controlled by or under common control with the
Adviser or its successors (each, an ``Adviser''); (b) uses the
manager of managers structure described in the application; and (c)
complies with the terms and conditions of the requested order (any
such series, a ``Fund'' and collectively, the ``Funds''). For
purposes of the requested order, ``successor'' is limited to an
entity that results from a reorganization into another jurisdiction
or a change in the type of business organization.
\2\ The Trust currently has six series. The Adviser has hired a
Subadviser for each of these Funds in compliance with section 15(a)
of the Act.
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2. Applicants request an exemption to permit the Adviser, subject
to Board approval, to hire certain Subadvisers pursuant to subadvisory
agreements and materially amend existing subadvisory agreements without
obtaining the shareholder approval required under section 15(a) of the
Act and rule 18f-2 under the Act.\3\ Applicants also seek an exemption
from the Disclosure Requirements to permit a Fund to disclose (as both
a dollar amount and a percentage of the Fund's net assets): (a) The
aggregate fees paid to the Adviser and any Affiliated Subadviser; and
(b) the aggregate fees paid to Subadvisers other than Affiliated
Subadvisers. For any Fund that employs an Affiliated Subadviser, the
Fund will provide separate disclosure of any fees paid to the
Affiliated Subadviser.
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\3\ The requested relief will not extend to any Subadviser that
is an affiliated person, as defined in section 2(a)(3) of the Act,
of the Trust, a Fund, or the Adviser, other than solely by reason of
serving as a Subadviser to one or more of the Funds, or as an
adviser or subadviser to any series of the Trust other than the
Funds (``Affiliated Subadviser'').
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3. Applicants agree that any order granting the requested relief
will be subject to the terms and conditions stated in the application.
Such terms and conditions provide for, among other safeguards,
appropriate disclosure to Fund shareholders and notification about
subadvisory changes and enhanced Board oversight to protect the
interests of the Funds' shareholders.
4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction or any class or classes of
persons, securities, or transactions from any provisions of the Act, or
any rule thereunder, if such relief is necessary or appropriate in the
public interest and consistent with the protection of investors and
purposes fairly intended by the policy and provisions of the Act.
Applicants believe that the requested relief meets this standard
because, as further explained in the application, the Advisory
Agreements will remain subject to shareholder approval while the role
of the Subadvisers is substantially similar to that of individual
portfolio managers, so that requiring shareholder approval of
subadvisory agreements would impose unnecessary delays and expenses on
the Funds. Applicants believe that the requested relief from the
Disclosure Requirements meets this standard because it will improve the
Adviser's ability to negotiate fees paid to the Subadvisers that are
more advantageous for the Funds.
For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03311 Filed 2-25-19; 8:45 am]
BILLING CODE 8011-01-P