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Federal Register / Vol. 86, No. 137 / Wednesday, July 21, 2021 / Notices
of the Act. In addition, the terms of each Subadvisory Agreement will comply fully with the requirements of section 15a of the Act. The Adviser may compensate the Subadvisers or the Subadvised Funds may compensate the Subadvisers directly.
7. Subadvised Funds will inform shareholders of the hiring of a new Subadviser pursuant to the following procedures Modified Notice and Access Procedures: a Within 90 days after a new Subadviser is hired for any Subadvised Fund, that Fund will send its shareholders either a Multi-manager Notice or a Multi-manager Notice and Multi-manager Information Statement; 9
and b the Subadvised Fund will make the Multi-manager Information Statement available on the website identified in the Multi-manager Notice no later than when the Multi-manager Notice or Multi-manager Notice and Multi-manager Information Statement is first sent to shareholders, and will maintain it on that website for at least 90 days.10

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III. Applicable Law 8. Section 15a of the Act states, in part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract, which contract, whether with such registered company or with an investment adviser of such registered company, has been approved by the vote of a majority of the outstanding voting securities of such registered company.
9. Form N1A is the registration statement used by open-end investment companies. Item 19a3 of Form N1A
9 A Multi-manager Notice will be modeled on a Notice of internet Availability as defined in Rule 14a16 under the 1934 Act, and specifically will, among other things: a Summarize the relevant information regarding the new Subadviser except as modified to permit Aggregate Fee Disclosure; b inform shareholders that the Multi-manager Information Statement is available on a website; c provide the website address; d state the time period during which the Multi-manager Information Statement will remain available on that website; e provide instructions for accessing and printing the Multi-manager Information Statement; and f instruct the shareholder that a paper or email copy of the Multi-manager Information Statement may be obtained, without charge, by contacting the Subadvised Fund. A Multi-manager Information Statement will meet the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the 1934 Act for an information statement, except as modified by the requested order to permit Aggregate Fee Disclosure.
Multi-manager Information Statements will be filed with the Commission via the EDGAR system.
10 In addition, Applicants represent that whenever a Subadviser is hired or terminated, or a Subadvisory Agreement is materially amended, the Subadvised Funds prospectus and statement of additional information will be supplemented promptly pursuant to rule 497e under the Securities Act of 1933.

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requires a registered investment company to disclose in its statement of additional information the method of computing the advisory fee payable by the investment company with respect to each investment adviser, including the total dollar amounts that the investment company paid to the adviser aggregated with amounts paid to affiliated advisers, if any, and any advisers who are not affiliated persons of the adviser, under the investment advisory contract for the last three fiscal years.
10. Rule 20a1 under the Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the 1934 Act. Items 22c1ii, 22c1iii, 22c8 and 22c9 of Schedule 14A, taken together, require a proxy statement for a shareholder meeting at which the advisory contract will be voted upon to include the rate of compensation of the investment adviser, the aggregate amount of the investment advisers fee, a description of the terms of the contract to be acted upon, and, if a change in the advisory fee is proposed, the existing and proposed fees and the difference between the two fees.
11. Regulation SX sets forth the requirements for financial statements required to be included as part of a registered investment companys registration statement and shareholder reports filed with the Commission.
Sections 6072a, b, and c of Regulation SX require a registered investment company to include in its financial statements information about investment advisory fees.
12. 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 13. Applicants assert that, from the perspective of the shareholder, the role of the Subadvisers 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
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of the Board, to select a Subadviser who is in the best position to achieve the Subadvised Funds investment objective. Applicants believe that permitting the Adviser to perform the duties for which the shareholders of the Subadvised Fund are paying the Adviserthe selection, oversight and evaluation of the Subadviserwithout 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 Subadvised 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 Subadvisers 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 Subadvisers does not serve any meaningful purpose.
Applicants contend that the primary reasons for requiring disclosure of individual fees paid to Subadvisers are to inform shareholders of expenses to be charged by a particular Subadvised 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 Subadvised Funds overall advisory fee will be fully disclosed and,
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