[Federal Register Volume 86, Number 187 (Thursday, September 30, 2021)]
[Notices]
[Pages 54267-54269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21321]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34386; 812-15183]


Optimum Fund Trust, et al.; Notice of Application

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(c) of 
the Act.

Applicants: Optimum Fund Trust, Delaware Group Adviser Funds, Delaware 
Group Cash Reserve, Delaware Group Equity Funds I, Delaware Group 
Equity Funds II, Delaware Group Equity Funds IV, Delaware Group Equity 
Funds V, Delaware Group Foundation Funds, Delaware Group Global & 
International Funds, Delaware Group Government Fund, Delaware Group 
Income Funds, Delaware Group Limited-Term Government Funds, Delaware 
Group State Tax-Free Income Trust, Delaware Group Tax Free Fund, 
Delaware Pooled Trust, Delaware VIP Trust, Voyageur Insured Funds, 
Voyageur Intermediate Tax Free Funds, Voyageur Mutual Funds, Voyageur 
Mutual Funds II, Voyageur Mutual Funds III, and Voyageur Tax Free Funds 
(each, a ``Trust''), each a Delaware statutory trust registered under 
the Act as an open-end management investment company

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offering one or more series, and Delaware Management Company, a series 
of Macquarie Investment Management Business Trust, a Delaware statutory 
trust registered as an investment adviser under the Investment Advisers 
Act of 1940 (``Adviser'') that serves an investment adviser to such 
series (collectively the ``Applicants'').

Summary of Application: The requested exemption would permit each 
Trust's board of trustees (the ``Board'') to approve new sub-advisory 
agreements and material amendments to existing sub-advisory agreements 
for the Subadvised Series (as defined below), without complying with 
the in-person meeting requirement of Section 15(c) of the Act.

Filing Dates: The application was filed on December 10, 2021 and 
amended on May 14, 2021.

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 emailing the Commission's 
Secretary at [email protected] and serving Applicants with a 
copy of the request by email. Hearing requests should be received by 
the Commission by 5:30 p.m. on October 22, 2021, 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 emailing the Commission's Secretary.

ADDRESSES: The Commission: [email protected]. Applicants: Bruce 
G. Leto, Esq. at [email protected] and Michael W. Mundt, Esq., at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Keri E. Riemer, Senior Counsel, at 
(202) 551-8695, or Marc Mehrespand, Branch Chief, at (202) 551-6825 
(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.

I. Requested Exemptive Relief

    1. Applicants request an exemption from Section 15(c) of the Act to 
permit the Board,\1\ including the Independent Board Members, \2\ to 
approve an agreement (each a ``Sub-Advisory Agreement'') pursuant to 
which a sub-adviser manages all or a portion of the assets of one or 
more of the series, or a material amendment thereto (a ``Sub-Adviser 
Change''), without complying with the in-person meeting requirement of 
Section 15(c).\3\ Under the requested relief, the Independent Board 
Members could instead approve a Sub-Adviser Change at a meeting at 
which members of the Board participate by any means of communication 
that allows them to hear each other simultaneously during the meeting.
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    \1\ The term ``Board'' also includes the board of trustees or 
directors of a future Subadvised Series (as defined below).
    \2\ The term ``Independent Board Members'' means the members of 
the Board who are not parties to the Sub-Advisory Agreement (as 
defined below), or ``interested persons'', as defined in Section 
2(a)(19) of the Act, of any such party.
    \3\ Applicants do not request relief that would permit the Board 
and the Independent Board Members to approve renewals of Sub-
Advisory Agreements at non-in-person meetings.
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    2. Applicants request that the relief apply to Applicants, as well 
as to any future series of each Trust and any other existing or future 
registered open-end management investment company or series thereof 
that intends to rely on the requested order in the future and that: (i) 
is advised by the Adviser; \4\ (ii) uses the multi-manager structure 
described in the application; and (iii) complies with the terms and 
conditions of the application (each, a ``Subadvised Series'').\5\
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    \4\ The term ``Adviser'' includes (i) the Adviser or its 
successors and (ii) any entity controlling, controlled by, or under 
common control with, the Adviser or its successors. For the purposes 
of the requested order, ``successor'' is limited to an entity 
resulting from a reorganization into another jurisdiction or a 
change in the type of business organization.
    \5\ All registered open-end investment companies that currently 
intend to rely on the requested order are named as applicants. Any 
entity that relies on the requested order will do so only in 
accordance with the terms and conditions contained in the 
application.
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II. Management of the Subadvised Series

    3. The Adviser will serve as the investment adviser to each 
Subadvised Series pursuant to an investment advisory agreement with 
each Trust (each an ``Investment Management Agreement''). The Adviser, 
subject to the oversight of the Board, will provide continuous 
investment management services to each Subadvised Series. Applicants 
are not seeking an exemption from the Act with respect to the 
Investment Management Agreements.
    4. Applicants state that the Subadvised Series may seek to provide 
exposure to multiple strategies across various asset classes, thus 
allowing investors to more easily access such strategies without the 
additional transaction costs and administrative burdens of investing in 
multiple funds to seek to achieve comparable exposures.
    5. To that end, the Adviser may achieve its desired exposures to 
specific strategies by allocating discrete portions of the Subadvised 
Series' assets to various sub-advisers. Consistent with the terms of 
each Investment Management Agreement and subject to the Board's 
approval,\6\ the Adviser would delegate management of all or a portion 
of the assets of a Subadvised Series to a sub-adviser.\7\ Each sub-
adviser would be an ``investment adviser'' to the Subadvised Series 
within the meaning of Section 2(a)(20) of the Act.\8\ The Adviser would 
retain overall responsibility for the management and investment of the 
assets of each Subadvised Series.
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    \6\ A Sub-Advisory Agreement may also be subject to approval by 
a Subadvised Series' shareholders. Applicants currently rely on a 
multi-manager exemptive order to enter into and materially amend 
Sub-Advisory Agreements without obtaining shareholder approval. See 
Delaware Management Business Trust, et al., Investment Company Act 
Release Nos. 32395 (Dec. 19, 2016) (notice) and 32423 (Jan. 17, 
2017) (order).
    \7\ A sub-adviser may manage the assets of a Subadvised Series 
directly or provide the Adviser with model portfolio or investment 
recommendation(s) that would be utilized in connection with the 
management of a Subadvised Series.
    \8\ Each sub-adviser would be registered with the Commission as 
an investment adviser under the Advisers Act or not subject to such 
registration.
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III. Applicable Law

    6. Section 15(c) of the Act prohibits a registered investment 
company having a board from entering into, renewing or performing any 
contract or agreement whereby a person undertakes regularly to act as 
an investment adviser (including a sub-adviser) to the investment 
company, unless the terms of such contract or agreement and any renewal 
thereof have been approved by the vote of a majority of the investment 
company's board members who are not parties to such contract or 
agreement, or interested persons of any such party, cast in person at a 
meeting called for the purpose of voting on such approval.
    7. 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

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transactions from any provisions of the Act, or 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.

IV. Arguments in Support of the Requested Relief

    8. Applicants assert that boards of registered investment 
companies, including the Board, typically hold in-person meetings on a 
quarterly basis. Applicants state that during the three to four month 
period between board meeting dates, market conditions may change or 
investment opportunities may arise such that the Adviser may wish to 
make a Sub-Adviser Change. Applicants also state that at these moments 
it may be impractical, and/or costly to hold an additional in-person 
Board meeting, especially given the geographic diversity of Board 
members and the additional cost of holding in-person meetings.
    9. As a result, Applicants believe that the requested relief would 
allow the Subadvised Series to operate more efficiently. In particular, 
Applicants assert that without the delay inherent in holding in-person 
Board meetings (and the attendant difficulty of obtaining the necessary 
quorum for, and the additional costs of, an unscheduled in-person Board 
meeting), the Subadvised Series would be able to act quicker and with 
less expense to add or replace sub-advisers when the Board and the 
Adviser believe that a Sub-Adviser Change would benefit the Subadvised 
Series.
    10. Applicants also note that the in-person meeting requirement in 
Section 15(c) of the Act was designed to prohibit absentee approval of 
advisory agreements. Applicants state that condition 1 to the requested 
relief is designed to avoid such absentee approval by requiring that 
the Board approve a Sub-Adviser Change at a meeting where all 
participating Board members can hear each other and be heard by each 
other during the meeting.\9\
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    \9\ Applicants state that technology that includes visual 
capabilities will be used unless unanticipated circumstances arise. 
Applicants also state that the Board could not rely upon the relief 
to approve a Sub-Advisory Agreement by written consent or another 
form of absentee approval by the Board.
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    11. Applicants, moreover, represent that the Board would conduct 
any such non-in-person consideration of a Sub-Advisory Agreement in 
accordance with its typical process for approving Sub-Advisory 
Agreements. Consistent with Section 15(c) of the Act, the Board would 
request and evaluate such information as may reasonably be necessary to 
evaluate the terms of any Sub-Advisory Agreement, and the Adviser and 
sub-adviser would provide such information.
    12. Finally, Applicants note that if one or more Board members 
request that a Sub-Adviser Change be considered in-person, then the 
Board would not be able to rely on the relief and would have to 
consider the Sub-Adviser Change at an in-person meeting.

V. Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. The Independent Board Members will approve the Sub-Adviser 
Change at a non-in-person meeting in which Board members may 
participate by any means of communication that allows those Board 
members participating to hear each other simultaneously during the 
meeting.
    2. Management will represent that the materials provided to the 
Board for the non-in-person meeting include the same information the 
Board would have received if a Sub-Adviser Change were sought at an in-
person Board meeting.
    3. The notice of the non-in-person meeting will explain the need 
for considering the Sub-Adviser Change at a non-in-person meeting. Once 
notice of the non-in-person meeting to consider a Sub-Adviser Change is 
sent, Board members will be given the opportunity to object to 
considering the Sub-Adviser Change at a non-in-person Board meeting. If 
a Board member requests that the Sub-Adviser Change be considered in-
person, the Board will consider the Sub-Adviser Change at an in-person 
meeting, unless such request is rescinded.
    4. A Subadvised Series' ability to rely on the requested relief 
will be disclosed in the Subadvised Series' registration statement.
    5. In the event that the Commission adopts a rule under the Act 
providing substantially similar relief to that in the order 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.

    Dated: September 27, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21321 Filed 9-29-21; 8:45 am]
BILLING CODE 8011-01-P