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Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Notices
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 Boards 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 subadviser would be an investment adviser to the Subadvised Series within the meaning of Section 2a20
of the Act.8 The Adviser would retain overall responsibility for the management and investment of the assets of each Subadvised Series.
III. Applicable Law
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6. Section 15c 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 companys 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.
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 Columbia Funds Series Trust, et al., Investment Company Act Release Nos.
33495 May 30, 2019 notice and 33519 June 26, 2019 order.
7 A sub-adviser may manage the assets of a Subadvised Series directly or provide the Adviser with model portfolio or investment recommendations 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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7. Section 6c 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 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 inperson 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 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 inperson Board meeting, the Subadvised Series would be able to act quicker and with less expense to add or replace subadvisers when the Board and the Adviser believe that a Sub-Adviser Change would benefit the Subadvised Series.
10. Applicants also note that the inperson meeting requirement in Section 15c 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
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
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11. Applicants, moreover, represent that the Board would conduct any such non-in-person consideration of a SubAdvisory Agreement in accordance with its typical process for approving SubAdvisory Agreements. Consistent with Section 15c 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 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 SubAdviser 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 Trustees will approve a Sub-Adviser Change at a nonin-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 1940 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.
consent or another form of absentee approval by the Board.

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