[Federal Register Volume 72, Number 25 (Wednesday, February 7, 2007)]
[Notices]
[Pages 5764-5765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-1939]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 27694; 812-13339]
Van Eck Associates Corporation, et al.; Notice of Application
January 31, 2007.
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), 22(e), and 24(d) of
the Act and rule 22c-1 under the Act, under section 12(d)(1)(J) of the
Act for an exemption from sections 12(d)(1)(A) and (B) of the Act, and
under sections 6(c) and 17(b) of the Act granting an exemption from
sections 17(a)(1) and (a)(2) of the Act.
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Summary of Application: Applicants request an order to amend a prior
order that permits: (a) Open-end management investment companies that
include series based on certain domestic equity securities indices to
issue shares (``Shares'') that can be redeemed only in large
aggregations (``Creation Units''); (b) secondary market transactions in
Shares to occur at negotiated prices; (c) dealers to sell Shares to
purchasers in the secondary market unaccompanied by a prospectus when
prospectus delivery is not required by the Securities Act of 1933
(``Securities Act''); (d) certain affiliated persons of the series to
deposit securities into, and receive securities from, the series in
connection with the purchase and redemption of Creation Units; 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 (``Prior Order'').\1\ Applicants seek to amend the
Prior Order in order to offer two new series (each series, an
``Additional Fund,'' and together, the ``Additional Funds'') and future
series (``Future Foreign Funds,'' and together with the Additional
Funds, the ``Foreign Funds'') based on foreign equity securities
indices. In addition, the order would delete a condition related to
future relief in the Prior Order.
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\1\ Van Eck Associates Corporation, et al., Investment Company
Act Release Nos. 27283 (April 7, 2006) (notice) and 27311 (May 2,
2006) (order).
Applicants: Van Eck Associates Corporation (``Adviser''), Market
Vectors ETF Trust (``Trust''), and Van Eck Securities Corporation
(``Distributor'').
Filing Dates: The application was filed on November 1, 2006, and
amended on January 25, 2007.
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 February 26, 2007, 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, 99 Park Avenue, 8th
Floor, New York, NY 10016.
FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior
Counsel, at (202) 551-6879, or Mary Kay Frech, Branch Chief, 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 for a fee at the
Commission's Public Reference Branch, 100 F Street NE., Washington DC
20549-0102 (tel. 202-551-5850).
Applicants' Representations
1. The Trust is an open-end management investment company
registered under the Act and organized as a Delaware statutory trust.
The Trust is organized as a series fund with multiple series. The
Adviser, an investment adviser registered under the Investment Advisers
Act of 1940 (``Advisers Act''), will serve as investment adviser to
each Foreign Fund. In the future, the Adviser may enter into sub-
advisory agreements with other investment advisers to act as ``sub-
advisers'' with respect to particular Foreign Funds. Any sub-adviser
will be registered under the Advisers Act. The Distributor, a broker-
dealer registered under the Securities Exchange Act of 1934 (the
``Exchange Act''), is expected to serve as the principal underwriter
and distributor of each Foreign Fund's Creation Units.
2. The Trust is currently permitted to offer several series based
on domestic equity securities indices in reliance on the Prior Order
(``Funds''). Applicants seek to amend the Prior Order to permit the
Trust to offer the two Additional Funds and Future Foreign Funds, each
of which, except as described in the application, would operate in a
manner identical to the Funds.
3. The Additional Funds will invest in portfolios of securities
consisting predominantly of the component securities of the Ardour
Global Alternative Energy Index (Extra Liquid) and the Ardour Global
Alternative Energy Index (Composite) (each, an ``Underlying Index'' and
together, the ``Underlying Indexes''). The Underlying Indexes are rules
based, capitalization weighted, float adjusted indices that include
companies principally engaged in at least one of the following five
industry segments: Alternative energy resources, distributed
generation, environmental technologies, energy efficiency and/or
enabling technologies. Currently, the Ardour Global Alternative Energy
Index (Composite) is comprised of over 200 individual stocks that are
traded on a North American, European or Asian stock exchange. The
Ardour Global Alternative Energy Index (Extra Liquid) is comprised of
thirty stocks that are selected from the Ardour Global Alternative
Energy Index (Composite) that have achieved the highest average daily
trading volumes for the prior three months. No entity that creates,
compiles, sponsors, or maintains an Underlying Index is or will be an
affiliated person, as defined in section 2(a)(3) of the Act, or an
affiliated person of an affiliated person, of the Trust, the Adviser,
the Distributor, promoter, or any sub-adviser to a Foreign Fund.
4. Applicants state that all discussions contained in the
application for the Prior Order are equally applicable to the Foreign
Funds, except as specifically noted by applicants (as summarized in
this notice). Applicants assert that the
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Foreign Funds will operate in a manner substantially similar to the
existing Funds and will comply with all of the terms, provisions 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.
Section 22(e) of the Act
5. Applicants also seek to amend the Prior Order to add relief from
section 22(e) of the Act. Section 22(e) generally prohibits a
registered investment company from suspending the right of redemption
or postponing the date of payment of redemption proceeds for more than
seven days after the tender of a security for redemption. The principal
reason for the requested exemption is that settlement of redemptions
for the Foreign Funds is contingent not only on the settlement cycle of
the United States market, but also on currently practicable delivery
cycles in local markets for underlying foreign securities held by the
Foreign Funds. Applicants state that local market delivery cycles for
transferring certain foreign securities to investors redeeming Creation
Units, together with local market holiday schedules, will under certain
circumstances require a delivery process in excess of seven calendar
days for the Foreign Funds. Applicants request relief under section
6(c) from section 22(e) in such circumstances to allow the Foreign
Funds to pay redemption proceeds up to 12 calendar days after the
tender of a Creation Unit for redemption. At all other times and except
as disclosed in the relevant prospectus and/or statement of additional
information (``SAI''), applicants expect that each Foreign Fund will be
able to deliver redemption proceeds within seven days.\2\ With respect
to Future Foreign Funds, applicants seek the same relief from section
22(e) only to the extent that circumstances similar to those described
in the application exist.
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\2\ Rule 15c6-1 under the Exchange Act requires that most
securities transactions be settled within three business days of the
trade. Applicants acknowledge that no relief obtained from the
requirements of section 22(e) will affect any obligations applicants
may have under rule 15c6-1.
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6. Applicants state that section 22(e) was designed to prevent
unreasonable, undisclosed and unforeseen delays in the payment of
redemption proceeds. Applicants assert that the requested relief will
not lead to the problems that section 22(e) was designed to prevent.
Applicants state that the SAI will disclose those local holidays (over
the period of at least one year following the date of the SAI), if any,
that are expected to prevent the delivery of redemption proceeds in
seven calendar days, and the maximum number of days needed to deliver
the proceeds for the relevant Foreign Fund.
Future Relief
7. Applicants also seek to amend the Prior Order to modify the
terms under which the Trust may offer additional series in the future
based on other equity securities indices (``Future Funds''). The Prior
Order is currently subject to a condition that does not permit relief
for Future Funds unless applicants request and receive with respect to
such Future Fund, either exemptive relief from the Commission or a no-
action letter from the Division of Investment Management of the
Commission, or the Future Fund could be listed on a national securities
exchange (``Exchange'') without the need for a filing pursuant to rule
19b-4 under the Exchange Act.
8. The order would amend the Prior Order to delete this condition.
Any Future Funds will: (a) Be advised by the Adviser or an entity
controlled by or under common control with the Adviser; (b) track
underlying equity securities indices that are created, compiled,
sponsored or maintained by an entity that is not an affiliated person,
as defined in section 2(a)(3) of the Act, or an affiliated person of an
affiliated person, of the Adviser, the Distributor, the Trust or any
subadviser or promoter of a Future Fund; and (c) comply with the
respective terms and conditions of the Prior Order, as amended by the
present application.
9. Applicants believe that the modification of the future relief
available under the Prior Order would be consistent with sections 6(c)
and 17(b) of the Act and that granting the requested relief will
facilitate the timely creation of Future Funds and the commencement of
secondary market trading of such Future Funds by removing the need to
seek additional exemptive relief. Applicants submit that the terms and
conditions of the Prior Order have been appropriate for the existing
Funds and would remain appropriate for Future Funds. Applicants also
submit that tying exemptive relief under the Act to the ability of a
Future Fund to be listed on an Exchange without the need for a rule
19b-4 filing under the Exchange Act is not necessary to meet the
standards under sections 6(c) and 17(b) of the Act.
Applicants' Condition
Applicants agree that any amended order granting the requested
relief will be subject to the same conditions as those imposed by the
Prior Order, except for condition 1 to the Prior Order, which will be
deleted.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-1939 Filed 2-6-07; 8:45 am]
BILLING CODE 8010-01-P