
[Federal Register: October 3, 2008 (Volume 73, Number 193)]
[Notices]               
[Page 57695-57696]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc08-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28411; 812-13491]

 
Invesco PowerShares Capital Management LLC, et al.; Notice of 
Application

September 29, 2008.
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'') for an exemption 
from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 
22c-1 under the Act, and under sections 6(c) and 17(b) of the Act for 
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 (``Prior Order'') \1\ that permits (a) Open-end management 
investment companies whose portfolio securities include equity and/or 
fixed-income securities of U.S. issuers 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) 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 (d) certain 
registered management investment companies and unit investment trusts 
outside of the same group of investment companies as the series to 
acquire Shares. Applicants seek to amend the Prior Order in order to 
offer two new series (the ``Additional Funds'') and future series 
(``Future Foreign Funds,'' together with the Additional Funds, the 
``Foreign Funds'') investing in foreign equity and fixed-income 
securities.
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    \1\ PowerShares Capital Management, et al., Investment Company 
Act Release Nos. 28140 (Feb. 1, 2008) (notice) and 28171 (Feb. 27, 
2008) (order).

Applicants: Invesco PowerShares Capital Management LLC, formerly known 
as PowerShares Capital Management LLC (the ``Adviser''), Invesco Aim 
Distributors, Inc., formerly known as AIM Distributors, Inc. (the 
``Distributor''), and PowerShares Actively Managed Exchange-Traded Fund 
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Trust (the ``Trust'').

Filing Dates: The application was filed on February 12, 2008, and 
amended on July 22, 2008. Applicants have agreed to file an amendment 
during the notice period, the substance of which is reflected in this 
notice.

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 October 24, 2008, 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: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants: Adviser and Trust, 
301 West Roosevelt Road, Wheaton, Illinois 60187, and Distributor, 11 
Greenway Plaza, Houston, Texas 77046-1173

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 
551-6870, or Marilyn Mann, 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 
Public Reference Room, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington DC 20549-1520 (telephone (202) 551-5850).

Applicants' Representations

    1. The Trust is an open-end management investment company 
registered under the Act and organized as a Delaware business trust. 
The Trust currently offers four series under the Prior Order (the 
``Initial Funds,'' together with the Foreign Funds, the ``Funds'').\2\ 
The Adviser, which is registered as an investment adviser under the 
Investment Advisers Act of 1940 (``Advisers Act''), or an entity 
controlling, controlled by or under common control with the Adviser 
(included in the term ``Adviser''), will serve as investment adviser to 
each Fund. The Adviser may in the future retain one or more sub-
advisers (``Sub-Advisers'') to manage particular Funds' portfolios. Any 
Sub-Adviser will be registered under the Advisers Act. The Distributor, 
a broker-dealer registered under the Securities Exchange Act of 1934 
(``Exchange Act''), serves as the principal underwriter and distributor 
for the Funds.
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    \2\ The Initial Funds are the PowerShares Active AlphaQ 
Portfolio, PowerShares Active Alpha Multi-Cap Portfolio, PowerShares 
Active Mega-Cap Portfolio and PowerShares Active Low Duration 
Portfolio.
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    2. The Trust is currently permitted to offer actively-managed 
exchange-traded funds investing in U.S. equity and fixed-income 
securities in reliance on the Prior Order. Applicants seek to amend the 
Prior Order to permit the Trusts to offer Foreign Funds that will 
invest in foreign equity and fixed-income securities.\3\
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    \3\ The Additional Funds consist of the PowerShares Active 
International Equity Portfolio which will invest in equity 
securities of foreign issuers, and the PowerShares Active Sovereign 
Debt Portfolio which will invest in foreign government debt 
securities.
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    3. 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 Foreign Funds will operate in 
a manner identical to the Initial 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 meets 
the necessary exemptive standards.

Applicants' Legal Analysis

    1. In connection with applicants' request for relief to permit the 
operations of Foreign Funds, applicants 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

[[Page 57696]]

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. Applicants state that the settlement of 
redemptions for the Foreign Funds is contingent not only on the 
settlement cycle of the markets in the United States, but also on 
currently practicable delivery cycles in local markets for the 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) of the Act from section 22(e) in such 
circumstances to allow the Foreign Funds to pay redemption proceeds up 
to 14 calendar days after the tender of any Creation Unit for 
redemption. Except as disclosed in the Foreign Fund's prospectus or 
statement of additional information (``SAI''), applicants expect that 
each Foreign Fund will be able to deliver redemption proceeds within 
seven days.\4\ 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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    \4\ 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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    2. 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 for each Foreign Fund 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. 
Applicants are not seeking relief from section 22(e) of the Act with 
respect to Foreign Funds that do not effect creations and redemptions 
of Creation Units in-kind.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the same conditions as the Prior Order.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23346 Filed 10-2-08; 8:45 am]

BILLING CODE 8011-01-P
