[Federal Register Volume 85, Number 83 (Wednesday, April 29, 2020)]
[Notices]
[Pages 23878-23879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09035]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 33852; File No. 812-15117]
The Alger ETF Trust, et al.
April 23, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
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Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from sections
2(a)(32), 5(a)(1), and 22(d) of the Act and rule 22c-1 under the Act,
under sections 6(c) and 17(b) of the Act for an exemption from sections
17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) of the
Act for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the
Act.
Applicants: The Alger ETF Trust (the ``Trust''), Fred Alger
Management, LLC (the ``Adviser'') and Fred Alger & Company, LLC (the
``Distributor'').
Summary of Application: Applicants request an order (``Order'')
that permits: (a) ActiveShares ETFs (as described in the Reference
Order (as defined below)) to issue shares (``Shares'') redeemable in
large aggregations only (``creation units''); (b) secondary market
transactions in Shares to occur at negotiated market prices rather than
at net asset value; (c) certain affiliated persons of an ActiveShares
ETF to deposit securities into, and receive securities from, the
ActiveShares ETF in connection with the purchase and redemption of
creation units; and (d) certain registered management investment
companies and unit investment trusts outside of the same group of
investment companies as the ActiveShares ETFs to acquire Shares of the
ActiveShares ETFs. The Order would incorporate by reference terms and
conditions of a previous order
[[Page 23879]]
granting the same relief sought by applicants, as that order may be
amended from time to time (``Reference Order'').\1\
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\1\ Precidian ETFs Trust, et al., Investment Company Act Rel.
Nos. 33440 (April 8, 2019) (notice) and 33477 (May 20, 2019)
(order).
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Filing Date: The application was filed on March 27, 2020.
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, personally or by mail. Hearing requests should be
received by the Commission by 5:30 p.m. on May 18, 2020, and should be
accompanied by proof of service on 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 at [email protected].
ADDRESSES: The Commission: [email protected]. Applicants: The
Alger ETF Trust, Fred Alger Management, LLC and Fred Alger & Company,
LLC, 360 Park Avenue South, New York, New York 10010.
FOR FURTHER INFORMATION CONTACT: Marc Mehrespand, Senior Counsel, at
(202) 551-8453 or Trace Rakestraw, 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 for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090.
Applicants:
1. The Trust is a business trust organized under Massachusetts law
and will consist of one or more series operating as ActiveShares ETFs.
The Trust will be registered as an open-end management investment
company under the Act. Applicants seek relief with respect to Funds (as
defined below), including an initial Fund (the ``Initial Fund''). The
Funds will operate as ActiveShares ETFs as described in the Reference
Order.\2\
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\2\ To facilitate arbitrage, an ActiveShares ETF disseminates a
``verified intraday indicative value'' or ``VIIV,'' reflecting the
value of its portfolio holdings, calculated every second during the
trading day. To protect the identity and weightings of its portfolio
holdings, an ActiveShares ETF sells and redeems its Shares in
creation units to authorized participants only through an
unaffiliated broker-dealer acting on an agency basis.
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2. The Adviser, a Delaware limited liability company, will be the
investment adviser to the Initial Fund. An Adviser (as defined below)
will serve as investment adviser to each Fund. The Adviser is, and any
other Adviser will be, registered as an investment adviser under the
Investment Advisers Act of 1940 (``Advisers Act''). The Adviser may
enter into sub-advisory agreements with other investment advisers to
act as sub-advisers with respect to the Funds (each a ``Sub-Adviser'').
Any Sub-Adviser will be registered under the Advisers Act.
3. The Distributor is a Delaware limited liability company and a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended, and will act as the principal underwriter of Shares of the
Funds. Applicants request that the requested relief apply to any
distributor of Shares, whether affiliated or unaffiliated with the
Adviser and/or Sub-Adviser (included in the term ``Distributor''). Any
Distributor will comply with the terms and conditions of the Order.
Applicants' Requested Exemptive Relief:
4. Applicants seek the requested Order under section 6(c) of the
Act for an exemption from sections 2(a)(32), 5(a)(1), and 22(d) of the
Act and rule 22c-1 under the Act, under sections 6(c) and 17(b) of the
Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act,
and under section 12(d)(1)(J) of the Act for an exemption from sections
12(d)(1)(A) and 12(d)(1)(B) of the Act. The requested Order would
permit applicants to offer ActiveShares ETFs. Because the relief
requested is the same as the relief granted by the Commission under the
Reference Order and because the Adviser has entered into a licensing
agreement with Precidian Funds LLC in order to offer ActiveShares
ETFs,\3\ the Order would incorporate by reference the terms and
conditions of the Reference Order.
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\3\ Aspects of the Funds are covered by intellectual property
rights, including but not limited to those which are described in
one or more patent applications.
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5. Applicants request that the Order apply to the Initial Fund and
to any other existing or future open-end management investment company
or series thereof that: (a) Is advised by the Adviser or any entity
controlling, controlled by, or under common control with the Adviser
(any such entity included in the term ``Adviser''); (b) operates as an
ActiveShares ETF as described in the Reference Order; and (c) complies
with the terms and conditions of the Order and of the Reference Order,
which is incorporated by reference into the Order (each such company or
series and the Initial Fund, a ``Fund'').\4\
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\4\ All entities that currently intend to rely on the Order are
named as applicants. Any other entity that relies on the Order in
the future will comply with the terms and conditions of the Order
and of the Reference Order, which is incorporated by reference into
the Order.
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6. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction, or any class of persons,
securities or transactions, from any provisions of the Act, if and to
the extent that 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.
Section 17(b) of the Act authorizes the Commission to exempt a proposed
transaction from section 17(a) of the Act if evidence establishes that
the terms of the transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and the transaction is consistent
with the policies of the registered investment company and the general
purposes of the Act. Section 12(d)(1)(J) of the Act provides that the
Commission may exempt any person, security, or transaction, or any
class of persons, securities or transactions, from any provision of
section 12(d)(1) if the exemption is consistent with the public
interest and the protection of investors. Applicants submit that for
the reasons stated in the Reference Order the requested relief meets
the exemptive standards under sections 6(c), 17(b) and 12(d)(1)(J) of
the Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09035 Filed 4-28-20; 8:45 am]
BILLING CODE 8011-01-P