[Federal Register Volume 77, Number 240 (Thursday, December 13, 2012)]
[Notices]
[Pages 74230-74231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30053]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 30298; File No. 812-14055]
PNC Capital Advisors, LLC, et al.; Notice of Application
December 6, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a)
under the Act.
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Summary of Application: Applicants request an order to permit open-end
management investment companies relying on rule 12d1-2 under the Act to
invest in certain financial instruments.
Applicants: PNC Capital Advisors, LLC (``PNC Capital Advisors''), PNC
Funds and PNC Advantage Funds (together, the ``Trusts''), and PNC Funds
Distributor, LLC (``Distributor'').
Filing Dates: The application was filed on July 13, 2012, and amended
on November 26, 2012.
Hearing or Notification of Hearing: An order granting the application
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 December 27, 2012, 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 who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Elizabeth M. Murphy, Secretary, Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090; PNC Capital
Advisors and the Trusts, One East Pratt Street, 5th Floor East,
Baltimore, MD 21202; and the Distributor, Three Canal Plaza, Suite 100,
Portland, ME 04101.
FOR FURTHER INFORMATION CONTACT: Steven I. Amchan, Senior Counsel, at
(202) 551-6826, or Jennifer L. Sawin, 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 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 Trusts are organized as Delaware statutory trusts and
registered under the Act as open-end management investment companies.
PNC Capital Advisors, the Trusts' investment adviser, is organized as a
Delaware limited liability company and is a registered investment
adviser under the Investment Advisers Act of 1940, as amended (the
``Advisers Act''). The Distributor is organized as a Delaware limited
liability company, and is a registered broker-dealer under the
Securities Exchange Act of 1934, as amended (``1934 Act''); the
Distributor serves as the principal underwriter to the Trusts.
2. Applicants request the exemption to the extent necessary to
permit any existing or future series of the Trusts and any other
registered open-end management investment company or series thereof
that (i) is advised by PNC Capital Advisors or any person controlling,
controlled by or under common control with PNC Capital Advisors (any
such adviser or PNC Capital Advisors, an ``Adviser'') and (ii) is in
the same group of investment companies, as defined in section
12(d)(1)(G) of the Act, as the Trusts and invests in other registered
open-end management investment companies (``Underlying Funds'') in
reliance on section 12(d)(1)(G) of the Act; and (iii) is also eligible
to invest in securities (as defined in section 2(a)(36) of the Act) in
reliance on rule 12d1-2 under the Act (each a ``Fund of Funds''), to
also invest, to the extent consistent with its investment objectives,
policies, strategies and limitations, in financial instruments that may
not be securities within the meaning of section 2(a)(36) of the Act
(``Other Investments'').\1\ Applicants also request that the order
exempt any entity, including any entity controlled by or under common
control with an Adviser, that in the future acts as principal
underwriter, or broker or dealer if registered under the 1934 Act, with
respect to the transactions described in the application.
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\1\ Every existing entity that currently intends to rely on the
requested order is named as an applicant. Any entity that relies on
the order in the future will do so only in accordance with the terms
and condition in the application.
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3. Consistent with its fiduciary obligations under the Act, each
Fund of Funds' board of trustees will review the advisory fees charged
by the Fund of Funds' Adviser to ensure that they are based on services
provided that are in addition to, rather than duplicative of, services
provided pursuant to the advisory agreement of any investment company
in which the Fund of Funds may invest.
Applicants' Legal Analysis
1. Section 12(d)(1)(A) of the Act provides that no registered
investment company (``acquiring company'') may acquire securities of
another investment company (``acquired company'') if such securities
represent more than 3% of the acquired company's outstanding voting
stock or more than 5% of the acquiring company's total assets, or if
such securities, together with the securities of other investment
companies, represent more than 10% of the acquiring company's total
assets. Section 12(d)(1)(B) of the Act provides that no registered
open-end investment
[[Page 74231]]
company may sell its securities to another investment company if the
sale will cause the acquiring company to own more than 3% of the
acquired company's voting stock, or cause more than 10% of the acquired
company's voting stock to be owned by investment companies and
companies controlled by them.
2. Section 12(d)(1)(G) of the Act provides, in part, that section
12(d)(1) will not apply to securities of an acquired company purchased
by an acquiring company if: (i) The acquired company and acquiring
company are part of the same group of investment companies; (ii) the
acquiring company holds only securities of acquired companies that are
part of the same group of investment companies, government securities,
and short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not
excessive under rules adopted pursuant to section 22(b) or section
22(c) of the Act by a securities association registered under section
15A of the 1934 Act, or by the Commission; and (iv) the acquired
company has a policy that prohibits it from acquiring securities of
registered open-end investment companies or registered unit investment
trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
3. Rule 12d1-2 under the Act permits a registered open-end
investment company or a registered unit investment trust that relies on
section 12(d)(1)(G) of the Act to acquire, in addition to securities
issued by another registered investment company in the same group of
investment companies, government securities, and short-term paper: (i)
Securities issued by an investment company that is not in the same
group of investment companies, when the acquisition is in reliance on
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii) securities (other
than securities issued by an investment company); and (iii) securities
issued by a money market fund, when the investment is in reliance on
rule 12d1-1 under the Act. For the purposes of rule 12d1-2,
``securities'' means any security as defined in section 2(a)(36) of the
Act.
4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction from any provision of the Act, or
from any rule under the Act, 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 policies and
provisions of the Act.
5. Applicants state that the Funds of Funds will comply with rule
12d1-2 under the Act, but for the fact that they may invest a portion
of their assets in Other Investments. Applicants request an order under
section 6(c) of the Act for an exemption from rule 12d1-2(a) to allow
the Funds of Funds to invest in Other Investments while investing in
Underlying Funds. Applicants assert that permitting the Funds of Funds
to invest in Other Investments as described in the application would
not raise any of the concerns that the requirements of section 12(d)(1)
were designed to address.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition:
Applicants will comply with all provisions of rule 12d1-2 under the
Act, except for paragraph (a)(2) to the extent that it restricts any
Fund of Funds from investing in Other Investments as described in the
application.
For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30053 Filed 12-12-12; 8:45 am]
BILLING CODE 8011-01-P