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Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices IV. Arguments in Support of the Requested Relief 13. Applicants assert that, from the perspective of the shareholder, the role of the Sub-Advisers is substantially equivalent to the limited role of the individual portfolio managers employed by an investment adviser to a traditional investment company. Applicants also assert that the shareholders expect the Adviser, subject to review and approval of the Board, to select a Sub-Adviser who is in the best position to achieve the Sub-Advised Funds investment objective. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of the Sub-Advised Fund are paying the Adviserthe selection, oversight and evaluation of the Sub-Adviserwithout incurring unnecessary delays or expenses of convening special meetings of shareholders is appropriate and in the interest of the Funds shareholders, and will allow such Fund to operate more efficiently. Applicants state that each Investment Advisory Agreement will continue to be fully subject to Section 15a of the Act and approved by the relevant Board, including a majority of the Independent Trustees, in the manner required by Section 15a and 15c of the Act.
14. Applicants submit that the requested relief meets the standards for relief under Section 6c of the Act.
Applicants state that the operation of the Sub-Advised Fund in the manner described in the application must be approved by shareholders of that Fund before it may rely on the requested relief. Applicants also state that the proposed conditions to the requested relief are designed to address any potential conflicts of interest or economic incentives, and provide that shareholders are informed when new Sub-Advisers are hired.
15. Applicants contend that, in the circumstances described in the application, a proxy solicitation to approve the appointment of new SubAdvisers provides no more meaningful information to shareholders than the proposed Multi-Manager Information Statement. Applicants state that, accordingly, they believe the requested relief 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.
16. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that disclosure of the individual fees paid to the Sub-Advisers does not serve any meaningful purpose.
Applicants contend that the primary
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reasons for requiring disclosure of individual fees paid to Sub-Advisers are to inform shareholders of expenses to be charged by a particular Sub-Advised Fund and to enable shareholders to compare the fees to those of other comparable investment companies.
Applicants believe that the requested relief satisfies these objectives because the Sub-Advised Funds overall advisory fee will be fully disclosed and, therefore, shareholders will know what the Sub-Advised Funds fees and expenses are and will be able to compare the advisory fees a SubAdvised Fund is charged to those of other investment companies. In addition, Applicants assert that the requested relief would benefit shareholders of the Sub-Advised Fund because it would improve the Advisers ability to negotiate the fees paid to SubAdvisers. In particular, Applicants state that if the Adviser is not required to disclose the Sub-Advisers fees to the public, the Adviser may be able to negotiate rates that are below a SubAdvisers posted amounts as the rate would not be disclosed to the SubAdvisers other clients. Applicants assert that the relief will also encourage Sub-Advisers to negotiate lower subadvisory fees with the Adviser if the lower fees are not required to be made public.
V. Relief for Affiliated Sub-Advisers 17. The Commission has granted the requested relief with respect to WhollyOwned and Non-Affiliated SubAdvisers through numerous exemptive orders. The Commission also has extended the requested relief to Affiliated Sub-Advisers.11 Applicants state that although the Advisers judgment in recommending a SubAdviser can be affected by certain conflicts, they do not warrant denying the extension of the requested relief to Affiliated Sub-Advisers. Specifically, the Adviser faces those conflicts in allocating fund assets between itself and a Sub-Adviser, and across Sub-Advisers, as it has an interest in considering the benefit it will receive, directly or indirectly, from the fee the Sub-Advised Fund pays for the management of those assets. Applicants also state that to the extent the Adviser has a conflict of interest with respect to the selection of an Affiliated Sub-Adviser, the proposed conditions are protective of shareholder interests by ensuring the Boards independence and providing the Board with the appropriate resources and 11 Carillon Series Trust, et al., Investment Co. Act Rel. Nos. 33464 May 2, 2019 notice and 33494
May 29, 2019 order.

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information to monitor and address conflicts.
18. With respect to the relief permitting Aggregate Fee Disclosure, Applicants assert that it is appropriate to disclose only aggregate fees paid to Affiliated Sub-Advisers for the same reasons that similar relief has been granted previously with respect to Wholly-Owned and Non-Affiliated SubAdvisers.
VI. Applicants Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. Before a Sub-Advised Fund may rely on the order requested in the application, the operation of the SubAdvised Fund in the manner described in the application will be, or has been, approved by a majority of the SubAdvised Funds outstanding voting securities as defined in the Act, or, in the case of a Sub-Advised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2
below, by the initial shareholder before such Sub-Advised Funds shares are offered to the public.
2. The prospectus for each SubAdvised Fund will disclose the existence, substance and effect of any order granted pursuant to the application. In addition, each SubAdvised Fund will hold itself out to the public as employing the multi-manager structure described in the application.
The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Sub-Advisers and recommend their hiring, termination, and replacement.
3. The Adviser will provide general management services to each SubAdvised Fund, including overall supervisory responsibility for the general management and investment of the Sub-Advised Funds assets, and subject to review and oversight of the Board, will i set the Sub-Advised Funds overall investment strategies, ii evaluate, select, and recommend SubAdvisers for all or a portion of the SubAdvised Funds assets, iii allocate and, when appropriate, reallocate the SubAdvised Funds assets among SubAdvisers, iv monitor and evaluate the Sub-Advisers performance, and v implement procedures reasonably designed to ensure that Sub-Advisers comply with the Sub-Advised Funds investment objective, policies and restrictions.
4. Sub-Advised Funds will inform shareholders of the hiring of a new SubAdviser within 90 days after the hiring
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