[Federal Register Volume 84, Number 107 (Tuesday, June 4, 2019)]
[Notices]
[Pages 25862-25863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11584]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 33495; 812-14791]
Columbia Funds Series Trust, et al.
May 30, 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 exemption would permit an investment adviser to hire and
replace certain sub-advisers without shareholder approval and grant
relief from the Disclosure Requirements as they relate to fees paid to
the sub-advisers. The requested order would supersede a prior order.\1\
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\1\ AXP Market Advantage Series, Inc., et al., Investment
Company Act Release Nos. 25619 (June 19, 2002) (notice) and 25664
(July 16, 2002) (order).
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Applicants: Columbia Funds Series Trust, Columbia Funds Series
Trust I, Columbia Funds Series Trust II, Columbia Funds Variable
Insurance Trust, Columbia Funds Variable Series Trust II, Columbia ETF
Trust, Columbia ETF Trust I, and Columbia ETF Trust II (each, a
``Trust'' and collectively, the ``Trusts''), each a Delaware statutory
trust or a Massachusetts business trust registered under the Act as an
open-end management investment company with multiple series (each a
``Series''), and Columbia Management Investment Advisers, LLC (the
``Adviser''), a Minnesota limited liability company registered as an
investment adviser under the Investment Advisers Act of 1940.
Filing Dates: The application was filed on June 28, 2017 and
amended on December 11, 2017, September 28, 2018, March 7, 2019, and
May 17, 2019.
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 June 25, 2019, 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: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE, Washington, DC 20549-1090. Applicants: Ryan C. Larrenaga,
Esq., Columbia Management Investment Advisers, LLC, 225 Franklin
Street, Boston, MA 02110.
FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at
(202) 551-3038, or Trace W. Rakestraw, 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 for 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 serves as the investment adviser to each Series,
pursuant to an investment management agreement with the applicable
Trust (``Investment Management Agreement'').\2\ Under the terms of the
Investment Management Agreement, the Adviser, subject to the
supervision of the board of trustees of the applicable Trust
(``Board''), provides continuous investment management of the assets of
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each Subadvised Series. Consistent with the terms of the Investment
Management Agreement, the Adviser may, subject to the approval of the
Board, delegate portfolio management responsibilities of all or a
portion of the assets of a Subadvised Series to one or more Sub-
Advisers.\3\ The Adviser will continue to have overall responsibility
for the management and investment of the assets of each Subadvised
Series. The Adviser will evaluate, select, and recommend Sub-Advisers
to manage the assets of a Subadvised Series and will oversee, monitor
and review the Sub-Advisers and their performance and recommend the
removal or replacement of Sub-Advisers.
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\2\ Applicants request relief with respect to the named
Applicants, as well as to any future Series, and any other existing
or future registered open-end management investment company or
series thereof that, in each case, (i) is advised by the Adviser or
any entity controlling, controlled by, or under common control with,
the Adviser or its successors (each, also an ``Adviser''), (ii) uses
the multi-manager structure described in the application, and (iii)
complies with the terms and conditions set forth in the application
(each, a ``Subadvised Series''). 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. Future Subadvised Series may be operated as a
master-feeder structure pursuant to section 12(d)(1)(E) of the Act.
In such a structure, certain series of the applicable Trust (each, a
``Feeder Fund'') may invest substantially all of their assets in a
Subadvised Series (a ``Master Fund'') pursuant to section
12(d)(1)(E) of the Act. No Feeder Fund will engage any sub-advisers
other than through approving the engagement of one or more of the
Master Fund's sub-advisers.
\3\ As used herein, a ``Sub-Adviser'' for a Subadvised Series is
(1) an indirect or direct ``wholly owned subsidiary'' (as such term
is defined in the Act) of the Adviser for that Subadvised Series, or
(2) a sister company of the Adviser for that Subadvised Series that
is an indirect or direct ``wholly-owned subsidiary'' of the same
company that, indirectly or directly, wholly owns the Adviser (each
of (1) and (2) a ``Wholly-Owned Sub-Adviser'' and collectively, the
``Wholly-Owned Sub-Advisers''), or (3) not an ``affiliated person''
(as such term is defined in section 2(a)(3) of the Act) of the
Subadvised Series, any Feeder Fund invested in a Master Fund, any
Trust, or the Adviser, except to the extent that an affiliation
arises solely because the Sub-Adviser serves as a sub-adviser to a
Subadvised Series (``Non-Affiliated Sub-Advisers'').
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2. Applicants request an order to permit the Adviser, subject to
the approval of the Board, to enter into investment sub-advisory
agreements with the Sub-Advisers (each, a ``Sub-Advisory Agreement'')
and materially amend such Sub-Advisory Agreements without obtaining the
shareholder approval required under section 15(a) of the Act and rule
18f-2 under the Act.\4\ Applicants also seek an exemption from the
Disclosure Requirements to permit a Subadvised Series to disclose (as
both a dollar amount and a percentage of the Subadvised Series' net
assets): (a) The aggregate fees paid to the Adviser and any Wholly-
Owned Sub-Adviser; (b) the aggregate fees paid to Non-Affiliated Sub-
Advisers; and (c) the fee paid to each Affiliated Sub-Adviser
(collectively, Aggregate Fee Disclosure'').\5\
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\4\ The requested relief will not extend to any sub-adviser,
other than a Wholly-Owned Sub-Adviser, who is an affiliated person,
as defined in section 2(a)(3) of the Act, of the Subadvised Series,
of any Feeder Fund, or of the Adviser, other than by reason of
serving as a sub-adviser to one or more of the Subadvised Series
(``Affiliated Sub-Adviser'').
\5\ For any Subadvised Series that is a Master Fund, the relief
would also permit any Feeder Fund invested in that Master Fund to
disclose Aggregate Fee Disclosure.
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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 Subadvised Series' shareholders and
notification about sub-advisory changes and enhanced Board oversight to
protect the interests of the Subadvised Series' 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 Investment
Management Agreements will remain subject to shareholder approval,
while the role of the Sub-Advisers is substantially equivalent to that
of individual portfolio managers, so that requiring shareholder
approval of Sub-Advisory Agreements would impose unnecessary delays and
expenses on the Subadvised Series. 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 Sub-Advisers that are more advantageous for the Subadvised Series.
For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11584 Filed 6-3-19; 8:45 am]
BILLING CODE 8011-01-P