[Federal Register Volume 75, Number 82 (Thursday, April 29, 2010)]
[Notices]
[Pages 22639-22640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9989]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 29257; File No. 812-13702]
Pax World Funds Trust II, et al.; Notice of Application
April 26, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application to amend a prior order under section
6(c) of the Investment Company Act of 1940 (``Act'') to grant
exemptions from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act
and rule 22c-1 under the Act, under section 12(d)(1)(J) of the Act to
grant an exemption from sections 12(d)(1)(A) and (B) of the Act, and
under sections 6(c) and 17(b) of the Act to grant an exemption from
sections 17(a)(1) and (a)(2) of the Act.
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Summary of the Application: Applicants request an order to amend a
prior order that permits: (a) Certain open-end management investment
companies and their series that are based on equity securities indices
to issue shares that can be redeemed only in large aggregations; (b)
secondary market transactions in shares to occur at negotiated prices;
(c) certain affiliated persons of the series to deposit securities
into, and receive securities from, the series in connection with the
purchase and redemption of large aggregations of shares; (d) under
specified limited circumstances, certain series to pay redemption
proceeds more than seven days after the tender of shares; and (e)
certain registered management investment companies and unit investment
trusts outside of the same group of investment companies as the series
to acquire shares of the series (``Prior Order'').\1\ Applicants seek
to amend the Prior Order to permit the Trust to offer a new series that
is based on an equity securities index for which the entity that may be
deemed an index provider also may be deemed an affiliated person of an
affiliated person of the Trust. Applicants: Pax World Funds Trust II
(``Trust''), Pax World Management LLC \2\ (``Adviser''), and ALPS
Distributors, Inc. (``Distributor'').
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\1\ Pax World Funds Trust II, et al., Investment Company Act
Release Nos. 28834 (Jul. 22, 2009) (notice) and 28846 (Aug. 13,
2009) (Prior Order).
\2\ Pax World Management LLC is the successor to the business of
Pax World Management Corp., the investment adviser applicant named
in the Prior Order.
Filing Dates: The application was filed on September 24, 2009, and
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amended on February 8, 2010, April 9, 2010 and April 22, 2010.
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 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 May 14, 2010, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons may request notification of a hearing by writing to
the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicants: The Trust and the
Adviser, 30 Penhallow Street, Suite 400, Portsmouth, NH 03801;
Distributor, 1290 Broadway, Suite 1100, Denver, CO 80203.
FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at
(202) 551-6873, or Michael W. Mundt, Assistant Director, at (202) 551-
6821 (Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site 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.
Applicants' Representations
1. The Trust is organized as a Massachusetts business trust. The
Trust is registered under the Act as an open-end management investment
company with multiple series. The Trust seeks to offer a new series,
ESG Shares FTSE Environmental Technologies (ET50) Index Fund (the
``ET50 Fund''), that is based on an equity securities index, the FTSE
ET50 Index (the ``ET50 Index''). The Adviser, an investment adviser
registered under the Investment
[[Page 22640]]
Advisers Act of 1940 (``Advisers Act''), will serve as investment
adviser to the ET50 Fund. The Adviser may enter into sub-advisory
agreements with one or more investment advisers (``Sub-Advisers'') to
manage the assets of the ET50 Fund. Any Sub-Adviser will be registered
under the Advisers Act. The Distributor, a broker-dealer registered
under the Securities Exchange Act of 1934, will serve as the principal
underwriter of the ET50 Fund.
2. The applicants are currently permitted to offer series of the
Trust in reliance on the Prior Order (such series, the ``Funds'')
provided that the Funds are based on equity securities indices for
which no entity that compiles, creates, sponsors, or maintains the
indices (each such entity, an ``Index Provider'') is or will be an
``affiliated person'' (as such term is defined in section 2(a)(3) of
the Act), or an affiliated person of an affiliated person, of the Trust
or a Fund, the Adviser or any Sub-Adviser to or promoter of a Fund or
of the Distributor.
3. The ET50 Index is a subset of the FTSE Environmental Index
Series and is designed to represent the performance of the top 50
global environmental technology companies ranked by full market
capitalization. FTSE Group (``FTSE'') is responsible for the
calculation and management of the ET50 Index. Impax Asset Management
Ltd. (``Impax'') identifies companies as environmental technology
companies eligible for inclusion in the ET50 Index, subject to approval
by the independent FTSE Environmental Markets Advisory Committee (the
``Committee'').\3\ Applicants state that Impax may be deemed an Index
Provider to the ET50 Index if, due to its activities with respect to
the ET50 Index, it is deemed to be compiling, creating, sponsoring or
maintaining the ET50 Index. In addition, applicants state that Impax
may be deemed an affiliated person of an affiliated person of the
Trust.\4\ Accordingly, applicants seek to amend the Prior Order to
permit the operation of the ET50 Fund.
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\3\ The Committee consists of environmental technology and
investment professionals appointed by FTSE in consultation with
Impax. Among its duties, the Committee is charged with approving any
changes to the rules-based methodology for the ET50 Index (``Index
Rules'').
\4\ Impax serves as the investment adviser to a series of
another registered investment company that is advised by the Adviser
(``Trust II''). The Trust and Trust II are overseen by identical
boards of trustees and officers. Applicants state that Impax may be
deemed an affiliated person of an affiliated person of the Trust if
the Trust and Trust II are deemed to be under common control by
virtue of having the Adviser as their common investment adviser and/
or by having identical boards of trustees and officers. Other than
as stated in this footnote, neither Impax nor FTSE is or will be (i)
an affiliated person, as defined in section 2(a)(3) of the Act, or
an affiliated person of an affiliated person, of the ET50 Fund or
(ii) an investment adviser, promoter or principal underwriter of the
ET50 Fund, or an affiliated person of such persons.
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4. Applicants note that the restriction that the Prior Order
applies only to index-based series for which there is no affiliated
Index Provider is designed to address potential conflicts of interest.
Applicants state that the potential conflicts relating to the possible
manipulation of the ET50 Index are addressed through the transparency
of the Index Rules. Applicants state that FTSE maintains a publicly
available Web site on which it publishes the basic concept of the ET50
Index and discloses the Index Rules, in addition to the component
securities and weighting of the ET50 Index. Applicants state that FTSE,
as the entity that implements the Index Rules, calculates and maintains
the ET50 Index, and calculates and disseminates the ET50 Index value,
will function as an unaffiliated calculation agent. Applicants state
that, although FTSE may change the Index Rules in the future, any
change to the Index Rules would not take effect until FTSE has given
the public at least 60 days prior written notice of the change,
disclosed on FTSE's Web site. FTSE reconstitutes the ET50 Index no more
frequently than on a monthly basis.
5. Applicants state that Impax will have no responsibility for the
management of the ET50 Fund. Applicants state that the potential
conflicts of interest arising from the possibility that Impax may be
deemed an affiliated Index Provider will have no effect on the
operation of the ET50 Fund because Impax, the Adviser, and any-Sub-
Adviser each has adopted or will adopt policies and procedures designed
to address such conflicts of interest (``Policies and Procedures'').
Among other things, the Policies and Procedures will be designed to
limit or prohibit communication between the employees of Impax and the
employees of the Adviser (and any Sub-Adviser, if applicable). The
Policies and Procedures prohibit Impax from disseminating non-public
information about the ET50 Index, including potential changes to the
Index Rules to, among others, the employees of the Adviser and any Sub-
Adviser responsible for management of the ET50 Fund. The Adviser and
any Sub-Adviser will adopt Policies and Procedures that prohibit
personnel responsible for the management of the ET50 Fund from sharing
any non-public information about the management of the ET50 Fund with
any personnel of Impax. Neither the Adviser nor any Sub-Adviser will
have a preferential ability to influence the index methodology
determined by FTSE or the Committee over other institutional investors,
nor will the Adviser or any Sub-Adviser seek to influence the index
methodology determined by FTSE or the Committee in a way that would
disproportionately benefit the Adviser or any Sub-Adviser.
6. The Adviser has and any Sub-Adviser will have, pursuant to rule
206(4)-7 under the Advisers Act, written Policies and Procedures
designed to prevent violations of the Advisers Act and the rules under
the Adviser Act. The Adviser has adopted and any Sub-Adviser will
adopt, a Code of Ethics as required under rule 17j-1 under the Act and
rule 204A-1 under the Advisers Act, and Policies and Procedures to
monitor and restrict securities trading by certain employees.
7. Applicants state that the ET50 Fund will operate in a manner
identical to the operation of the Funds under the Prior Order, except
as specifically noted by applicants (and summarized in this notice).
The ET50 Fund will comply with all of the terms and conditions of the
Prior Order as amended by the present application. Applicants believe
that the requested relief continues to meet the necessary exemptive
standards.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9989 Filed 4-28-10; 8:45 am]
BILLING CODE 8011-01-P