
[Federal Register Volume 76, Number 145 (Thursday, July 28, 2011)]
[Notices]
[Pages 45303-45308]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19052]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29735; File No. 812-13909]


ING Asia Pacific High Dividend Equity Income Fund, et al.; Notice 
of Application

July 21, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application under section 6(c) of the Investment 
Company

[[Page 45304]]

Act of 1940 (``Act'') for an exemption from section 19(b) of the Act 
and rule 19b-1 under the Act.

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    Summary of Application: Applicants request an order (``Order'') to 
permit certain registered closed-end management investment companies to 
make periodic distributions of long-term capital gains with respect to 
their outstanding common stock as frequently as monthly in any taxable 
year, and as frequently as distributions are specified by or in 
accordance with the terms of any outstanding preferred stock that such 
investment companies may issue.
    Applicants: ING Asia Pacific High Dividend Equity Income Fund 
(``IAE''), ING Emerging Markets High Dividend Equity Fund (``IHD''); 
ING Global Advantage and Premium Opportunity Fund (``IGA''); ING Global 
Equity Dividend and Premium Opportunity Fund (``IGD''); ING 
Infrastructure, Industrials and Materials Fund (``IDE''); ING 
International High Dividend Equity Income Fund (``IID''); ING Prime 
Rate Trust (``PRT''); ING Risk Managed Natural Resources Fund (``IRR,'' 
together with IAE, IHD, IGA, IGD, IDE, IID and PRT, the ``Current 
Funds''); ING Investments, LLC (``IIL''); ING Investment Management Co. 
(``ING IM''); and Directed Services LLC (``DSL'', together with IIL and 
ING IM, the ``Investment Advisers'').

DATES: Filing Dates: The application was filed on May 26, 2011, and 
amended on July 21, 2011.
    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 August 15, 2011, and should be accompanied by proof of 
service on the 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, c/o Jeffrey S. 
Puretz, Dechert LLP, 1775 I Street, NW., Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at 
(202) 551-6915, or Daniele Marchesani, 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. Each Current Fund is a registered closed-end management 
investment company and is organized as a Delaware statutory trust, with 
the exception of PRT (which is organized as a Massachusetts business 
trust).\1\ The common shares of the Current Funds are listed on the New 
York Stock Exchange. PRT has also issued preferred shares. Each Current 
Fund reserves the right to issue preferred shares in the future. 
Applicants believe that investors in the common shares of the Current 
Funds may prefer an investment vehicle that provides regular/monthly 
distributions and a steady cash flow.
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    \1\ Applicants request that any Order issued granting the relief 
requested in the application also apply to any registered closed-end 
investment company currently advised or to be advised in the future 
by IIL, ING IM or DSL (including any successor in interest) or by an 
entity controlling, controlled by or under common control (within 
the meaning of section 2(a)(9) of the Act) with IIL, ING IM or DSL 
(such entities, together with IIL, ING IM and DSL, the ``Investment 
Advisers'') that decides in the future to rely on the requested 
relief. Any closed-end investment company that relies on the Order 
in the future will comply with the terms and conditions of the 
application (such investment companies together with the Current 
Funds, the ``Funds,'' and with the Investment Advisers, the 
``Applicants''). All existing Funds currently intending to rely on 
the Order have been named as Applicants. A successor in interest is 
limited to entities that result from a reorganization into another 
jurisdiction or a change in the type of business organization.
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    2. IIL, an Arizona limited liability company, acts as the Current 
Funds' investment adviser. ING IM, a Connecticut corporation, acts as a 
sub-adviser to certain of the Current Funds. DSL, a Delaware limited 
liability company, is an investment adviser under common control with 
IIL and ING IM. Each of IIL, ING IM and DSL is a registered investment 
adviser under the Investment Advisers Act of 1940, as amended 
(``Advisers Act'') and is an indirect, wholly-owned subsidiary of ING 
Groep N.V. (``ING Groep''). ING Groep is a global financial institution 
of Dutch origin.\2\ Each future Investment Adviser to a Fund will be 
registered under the Advisers Act.
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    \2\ Prior to July 1, 2011, each applicant was able to rely on 
the exemptive order granted in the Matter of ING Clarion Real Estate 
Income Fund, et al., Investment Co. Act Release Nos. 28329 (Jul. 8, 
2008) (notice) and 28352 (Aug. 5, 2008) (order) (``Existing Order'') 
to make periodic distributions of long-term capital gains with 
respect to the Current Funds' outstanding common stock as frequently 
as twelve times each year and as frequently as distributions are 
specified in the terms of any outstanding preferred stock. As of 
July 1, 2011, due to a restructuring of ING Groep, applicants are no 
longer able to rely on the Existing Order.
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    3. Applicants state that, prior to a Fund's implementing a 
distribution plan in reliance on the Order, the Board of Trustees (the 
``Board'') of the Fund, including a majority of the trustees who are 
not ``interested persons,'' of such Fund as defined in section 2(a)(19) 
of the Act (the ``Independent Trustees''), shall have requested, and 
the Investment Advisers shall have provided, such information as is 
reasonably necessary to make an informed determination on whether the 
Board should adopt a proposed distribution policy. In particular, the 
Board and the Independent Trustees shall have reviewed information 
regarding the purpose and terms of a proposed distribution policy, the 
likely effects of such policy on such Fund's long-term total return (in 
relation to market price and its net asset value per common share 
(``NAV'')) and the relationship between such Fund's distribution rate 
on its common shares under the policy and such Fund's total return (in 
relation to NAV); whether the rate of distribution would exceed such 
Fund's expected total return in relation to its NAV; and any 
foreseeable material effects of such policy on such Fund's long-term 
total return (in relation to market price and NAV). The Independent 
Trustees shall also have considered what conflicts of interest the 
Investment Advisers and the affiliated persons of the Investment 
Advisers and each such Fund might have with respect to the adoption or 
implementation of such policy. Applicants state that, only after 
considering such information shall the Board, including the Independent 
Trustees, of a Fund approve a distribution policy with respect to such 
Fund's common shares (the ``Plan'') and in connection with such 
approval shall have determined that such Plan is consistent with a 
Fund's investment objectives and in the best interests of a Fund's 
common shareholders.
    4. Applicants state that the purpose of a Plan would be to permit a 
Fund to distribute over the course of each year, through periodic 
distributions as nearly equal as practicable and any required special 
distributions, an amount closely approximating the total taxable income 
of such Fund during such year and, if

[[Page 45305]]

so determined by its Board, all or a portion of the returns of capital 
paid by portfolio companies to such Fund during such year. It is 
anticipated that under the Plan of a Fund, such Fund would distribute 
to its respective common shareholders a fixed monthly percentage of the 
market price of such Fund's common shares at a particular point in time 
or a fixed monthly percentage of NAV at a particular time or a fixed 
monthly amount, any of which may be adjusted from time to time. It is 
anticipated that under a Plan, the minimum annual distribution rate 
with respect to such Fund's common shares would be independent of a 
Fund's performance during any particular period but would be expected 
to correlate with a Fund's performance over time. Except for 
extraordinary distributions and potential increases or decreases in the 
final dividend periods in light of a Fund's performance for an entire 
calendar year and to enable a Fund to comply with the distribution 
requirements of Subchapter M of the Internal Revenue Code (``Code'') 
for the fiscal year, it is anticipated that each distribution on the 
common shares would be at the stated rate then in effect.
    5. Applicants state that prior to the implementation of a Plan for 
a Fund, the Board shall have adopted policies and procedures under rule 
38a-1 under the Act that: (i) Are reasonably designed to ensure that 
all notices required to be sent to the Fund's shareholders pursuant to 
section 19(a) of the Act, rule 19a-1 thereunder and condition 4 below 
(each a ``19(a) Notice'') include the disclosure required by rule 19a-1 
under the Act and by condition 2(a) below, and that all other written 
communications by the Fund or its agents regarding distributions under 
the Plan include the disclosure required by condition 3(a) below; and 
(ii) require the Fund to keep records that demonstrate its compliance 
with all of the conditions of the Order and that are necessary for such 
Fund to form the basis for, or demonstrate the calculation of, the 
amounts disclosed in its 19(a) Notices.

Applicants' Legal Analysis

    1. Section 19(b) of the Act generally makes it unlawful for any 
registered investment company to make long-term capital gains 
distributions more than once every twelve months. Rule 19b-1 under the 
Act limits the number of capital gains dividends, as defined in section 
852(b)(3)(C) of the Code (``distributions''), that a fund may make with 
respect to any one taxable year to one, plus a supplemental ``clean 
up'' distribution made pursuant to section 855 of the Code not 
exceeding 10% of the total amount distributed for the year, plus one 
additional capital gain dividend made in whole or in part to avoid the 
excise tax under section 4982 of the Code.
    2. Section 6(c) of the Act provides that the Commission may, by 
order upon application, conditionally or unconditionally exempt any 
person, security, or transaction, or any class or classes of persons, 
securities or transactions, from any provision of the Act, if and to 
the extent that the 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.
    3. Applicants state that one of the concerns leading to the 
enactment of section 19(b) and adoption of rule 19b-1 was that 
shareholders might be unable to distinguish between frequent 
distributions of capital gains and dividends from investment income. 
Applicants state, however, that rule 19a-1 effectively addresses this 
concern by requiring that distributions (or the confirmation of the 
reinvestment thereof) estimated to be sourced in part from capital 
gains or capital be accompanied by a separate statement showing the 
sources of the distribution (e.g., estimated net income, net short-term 
capital gains, net long-term capital gains and/or return of capital). 
Applicants state that similar information is included in the Funds' 
annual reports to shareholders and on the Internal Revenue Service Form 
1099 DIV, which is sent to each common and preferred shareholder who 
received distributions during a particular year.
    4. Applicants further state that each of the Funds will make the 
additional disclosures required by the conditions set forth below, and 
each of them has adopted compliance policies and procedures in 
accordance with rule 38a-1 under the Act to ensure that all required 
19(a) Notices and disclosures are sent to shareholders. Applicants 
argue that by providing the information required by section 19(a) and 
rule 19a-1, and by complying with the procedures adopted under the Plan 
and the conditions listed below, each Fund's shareholders would be 
provided sufficient information to understand that their periodic 
distributions are not tied to a Fund's net investment income and 
realized capital gains to date, and may not represent yield or 
investment return. Accordingly, Applicants assert that continuing to 
subject the Funds to section 19(b) and rule 19b-1 would afford 
shareholders no extra protection.
    5. Applicants assert that section 19(b) and rule 19b-1 also were 
intended to prevent certain improper sales practices, including, in 
particular, the practice of urging an investor to purchase shares of a 
fund on the basis of an upcoming capital gains dividend (``selling the 
dividend''), where the dividend would result in an immediate 
corresponding reduction in NAV and would be in effect a taxable return 
of the investor's capital. Applicants assert that the ``selling the 
dividend'' concern should not apply to closed-end investment companies, 
such as the Funds, which do not continuously distribute shares. 
According to the Applicants, if the underlying concern extends to 
secondary market purchases of shares of closed-end funds that are 
subject to a large upcoming capital gains dividend, adoption of a 
periodic distribution plan actually helps minimize the concern by 
avoiding, through periodic distributions, any buildup of large end-of-
the-year distributions.
    6. Applicants note that the common stock of closed-end funds 
generally tends to trade in the marketplace at a discount to their 
NAVs. Applicants believe that this discount may be reduced if the Funds 
are permitted to pay relatively frequent dividends on their common 
shares at a consistent rate, whether or not those dividends contain an 
element of capital gain.
    7. Applicants assert that the application of rule 19b-1 to a Plan 
actually gives rise to one of the concerns that rule 19b-1 was intended 
to avoid: Inappropriate influence on portfolio management decisions. 
Applicants state that, in the absence of an exemption from rule 19b-1, 
the adoption of a periodic distribution plan imposes pressure on 
management: (i) Not to realize any net long-term capital gains until 
the point in the year that the fund can pay all of its remaining 
distributions in accordance with rule 19b-1; and (ii) not to realize 
any long-term capital gains during any particular year in excess of the 
amount of the aggregate pay-out for the year (since as a practical 
matter excess gains must be distributed and accordingly would not be 
available to satisfy pay-out requirements in following years), 
notwithstanding that purely investment considerations might favor 
realization of long-term gains at different times or in different 
amounts. Applicants assert that by limiting the number of capital gain 
distributions that a fund may make with respect to any one year, rule 
19b-1 may prevent the normal and efficient operation of a periodic 
distribution plan whenever that fund's realized net long-term capital 
gains in any year exceed the total

[[Page 45306]]

of the periodic distributions that may include such capital gains under 
the rule.
    8. In addition, Applicants assert that rule 19b-1 may cause fixed 
regular periodic distributions to be funded with returns of capital \3\ 
(to the extent net investment income and realized short term capital 
gains are insufficient to fund the distribution), even though 
undistributed realized net long-term capital gains otherwise would be 
available. To distribute all of a fund's long-term capital gains within 
the limits in rule 19b-1, a fund may be required to make total 
distributions in excess of the annual amount called for by its periodic 
distribution plan or to retain and pay taxes on the excess amount. 
Applicants thus assert that the requested Order would minimize these 
anomalous effects of rule 19b-1 by enabling the Funds to realize long-
term capital gains as often as investment considerations dictate 
without fear of violating rule 19b-1.
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    \3\ Returns of capital as used in the application means return 
of capital for financial accounting purposes and not for tax 
accounting purposes.
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    9. Applicants state that Revenue Ruling 89-81 under the Code 
requires that a fund that has both common shares and preferred shares 
outstanding designate the types of income, e.g., investment income and 
capital gains, in the same proportion as the total distributions 
distributed to each class for the tax year. To satisfy the 
proportionate designation requirements of Revenue Ruling 89-81, 
whenever a fund has realized a long-term capital gain with respect to a 
given tax year, the fund must designate the required proportionate 
share of such capital gain to be included in common and preferred share 
dividends. Applicants state that although rule 19b-1 allows a fund some 
flexibility with respect to the frequency of capital gains 
distributions, a fund might use all of the exceptions available under 
rule 19b-1 for a tax year and still need to distribute additional 
capital gains allocated to the preferred shares to comply with Revenue 
Ruling 89-81.
    10. Applicants assert the potential abuses addressed by section 
19(b) and rule 19b-1 do not arise with respect to preferred shares 
issued by a closed-end fund. Applicants assert that such distributions 
are either fixed, determined in periodic auctions, or determined by 
reference to short-term interest rates rather than by reference to 
performance of the issuer, and Revenue Ruling 89-81 determines the 
proportion of such distributions that are comprised of long-term 
capital gains.
    11. Applicants also submit that the ``selling the dividend'' 
concern is not applicable to preferred shares, which entitles a holder 
to no more than a periodic dividend at a fixed rate or the rate 
determined by the market, and like a debt security, is priced based 
upon its liquidation value, dividend rate, credit quality, and 
frequency of payment. Applicants assert that investors buy preferred 
shares for the purpose of receiving payments at the frequency bargained 
for and do not expect the liquidation value of their shares to change.
    12. Applicants request an order pursuant to section 6(c) of the Act 
granting an exemption from the provisions of section 19(b) of the Act 
and rule 19b-1 thereunder to permit each Fund to make periodic capital 
gain dividends (as defined in section 852(b)(3)(C) of the Code) as 
often as monthly in any one taxable year in respect of its common 
shares and as often as specified by or determined in accordance with 
the terms thereof in respect of the Fund's preferred shares.

Applicants' Conditions

    Applicants agree that, with respect to each Fund seeking to rely on 
the Order, the Order will be subject to the following conditions.

1. Compliance Review and Reporting

    The Fund's chief compliance officer will: (a) Report to the Fund's 
Board, no less frequently than once every three months or at the next 
regularly scheduled quarterly Board meeting, whether: (i) The Fund and 
its Investment Adviser have complied with the conditions of the order; 
and (ii) a material compliance matter (as defined in rule 38a-1(e)(2) 
under the Act) has occurred with respect to such conditions; and (b) 
review the adequacy of the policies and procedures adopted by the Board 
no less frequently than annually.

2. Disclosures to Fund Shareholders

    (a) Each 19(a) Notice disseminated to the holders of the Fund's 
common shares, in addition to the information required by section 19(a) 
and rule 19a-1:
    (i) Will provide, in a tabular or graphical format:
    (1) The amount of the distribution, on a per common share basis, 
together with the amounts of such distribution amount, on a per common 
share basis and as a percentage of such distribution amount, from 
estimated: (A) Net investment income; (B) net realized short-term 
capital gains; (C) net realized long-term capital gains; and (D) return 
of capital or other capital source;
    (2) The fiscal year-to-date cumulative amount of distributions, on 
a per common share basis, together with the amounts of such cumulative 
amount, on a per common share basis and as a percentage of such 
cumulative amount of distributions, from estimated: (A) net investment 
income; (B) net realized short-term capital gains; (C) net realized 
long-term capital gains; and (D) return of capital or other capital 
source;
    (3) The average annual total return in relation to the change in 
NAV for the 5-year period (or, if the Fund's history of operations is 
less than five years, the time period commencing immediately following 
the Fund's first public offering) ending on the last day of the month 
ended immediately prior to the most recent distribution record date 
compared to the current fiscal period's annualized distribution rate 
expressed as a percentage of NAV as of the last day of the month prior 
to the most recent distribution record date; and
    (4) The cumulative total return in relation to the change in NAV 
from the last completed fiscal year to the last day of the month prior 
to the most recent distribution record date compared to the fiscal 
year-to-date cumulative distribution rate expressed as a percentage of 
NAV as of the last day of the month prior to the most recent 
distribution record date.
    Such disclosure shall be made in a type size at least as large and 
as prominent as the estimate of the sources of the current 
distribution; and
    (ii) Will include the following disclosure:
    (1) ``You should not draw any conclusions about the Fund's 
investment performance from the amount of this distribution or from the 
terms of the Fund's Plan'';
    (2) ``The Fund estimates that it has distributed more than its 
income and net realized capital gains; therefore, a portion of your 
distribution may be a return of capital. A return of capital may occur, 
for example, when some or all of the money that you invested in the 
Fund is paid back to you. A return of capital distribution does not 
necessarily reflect the Fund's investment performance and should not be 
confused with `yield' or `income' ''; \4\ and
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    \4\ The disclosure in this condition 2(a)(ii)(2) will be 
included only if the current distribution or the fiscal year-to-date 
cumulative distributions are estimated to include a return of 
capital.
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    (3) ``The amounts and sources of distributions reported in this 
19(a) Notice are only estimates and are not

[[Page 45307]]

being provided for tax reporting purposes. The actual amounts and 
sources of the amounts for tax reporting purposes will depend upon the 
Fund's investment experience during the remainder of its fiscal year 
and may be subject to changes based on tax regulations. The Fund will 
send you a Form 1099 DIV for the calendar year that will tell you how 
to report these distributions for Federal income tax purposes.''
    Such disclosure shall be made in a type size at least as large as 
and as prominent as any other information in the 19(a) Notice and 
placed on the same page in close proximity to the amount and the 
sources of the distribution.
    (b) On the inside front cover of each report to shareholders under 
rule 30e-1 under the Act, the Fund will:
    (i) Describe the terms of the Plan (including the fixed amount or 
fixed percentage of the distributions and the frequency of the 
distributions);
    (ii) Include the disclosure required by condition 2(a)(ii)(1) 
above;
    (iii) State, if applicable, that the Plan provides that the Board 
may amend or terminate the Plan at any time without prior notice to 
Fund shareholders; and
    (iv) Describe any reasonably foreseeable circumstances that might 
cause the Fund to terminate the Plan and any reasonably foreseeable 
consequences of such termination; and
    (c) Each report provided to shareholders under rule 30e-1 under the 
Act and each prospectus filed with the Commission on Form N-2 under the 
Act, will provide the Fund's total return in relation to changes in NAV 
in the financial highlights table and in any discussion about the 
Fund's total return.

3. Disclosure to Shareholders, Prospective Shareholders and Third 
Parties

    (a) The Fund will include the information contained in the relevant 
19(a) Notice, including the disclosure required by condition 2(a)(ii) 
above, in any written communication (other than a communication on Form 
1099) about the Plan or distributions under the Plan by the Fund, or 
agents that the Fund has authorized to make such communication on the 
Fund's behalf, to any Fund common shareholder, prospective common 
shareholder or third-party information provider;
    (b) The Fund will issue, contemporaneously with the issuance of any 
19(a) Notice, a press release containing the information in the 19(a) 
Notice and will file with the Commission the information contained in 
such 19(a) Notice, including the disclosure required by condition 
2(a)(ii) above, as an exhibit to its next filed Form N-CSR; and
    (c) The Fund will post prominently a statement on its (or the 
Investment Advisers') Web site containing the information in each 19(a) 
Notice, including the disclosure required by condition 2(a)(ii) above, 
and will maintain such information on such Web site for at least 24 
months.

4. Delivery of 19(a) Notices to Beneficial Owners

    If a broker, dealer, bank or other person (``financial 
intermediary'') holds common shares issued by the Fund in nominee name, 
or otherwise, on behalf of a beneficial owner, the Fund: (a) Will 
request that the financial intermediary, or its agent, forward the 
19(a) Notice to all beneficial owners of the Fund's shares held through 
such financial intermediary; (b) will provide, in a timely manner, to 
the financial intermediary, or its agent, enough copies of the 19(a) 
Notice assembled in the form and at the place that the financial 
intermediary, or its agent, reasonably requests to facilitate the 
financial intermediary's sending of the 19(a) Notice to each beneficial 
owner of the Fund's shares; and (c) upon the request of any financial 
intermediary, or its agent, that receives copies of the 19(a) Notice, 
will pay the financial intermediary, or its agent, the reasonable 
expenses of sending the 19(a) Notice to such beneficial owners.

5. Additional Board Determinations for Funds Whose Shares Trade at a 
Premium

    If:
    (a) The Fund's common shares have traded on the stock exchange that 
they primarily trade on at the time in question at an average premium 
to NAV equal to or greater than 10%, as determined on the basis of the 
average of the discount or premium to NAV of the Fund's common shares 
as of the close of each trading day over a 12-week rolling period (each 
such 12-week rolling period ending on the last trading day of each 
week); and
    (b) The Fund's annualized distribution rate for such 12-week 
rolling period, expressed as a percentage of NAV as of the ending date 
of such 12-week rolling period, is greater than the Fund's average 
annual total return in relation to the change in NAV over the 2-year 
period ending on the last day of such 12-week rolling period; then:
    (i) At the earlier of the next regularly scheduled meeting or 
within four months of the last day of such 12-week rolling period, the 
Board, including a majority of the Independent Trustees:
    (1) Will request and evaluate, and the Fund's Investment Advisers 
will furnish, such information as may be reasonably necessary to make 
an informed determination of whether the Plan should be continued or 
continued after amendment;
    (2) Will determine whether continuation, or continuation after 
amendment, of the Plan is consistent with the Fund's investment 
objective(s) and policies and in the best interests of the Fund and its 
shareholders, after considering the information in condition 5(b)(i)(1) 
above, including, without limitation:
    (A) Whether the Plan is accomplishing its purpose(s);
    (B) The reasonably foreseeable material effects of the Plan on the 
Fund's long-term total return in relation to the market price and NAV 
of the Fund's common shares; and
    (C) The Fund's current distribution rate, as described in condition 
5(b) above, compared with the Fund's average annual taxable income or 
total return over the 2-year period, as described in condition 5(b), or 
such longer period as the Board deems appropriate; and
    (3) Based upon that determination, will approve or disapprove the 
continuation, or continuation after amendment, of the Plan; and
    (ii) The Board will record the information considered by it, 
including its consideration of the factors listed in condition 
5(b)(i)(2) above, and the basis for its approval or disapproval of the 
continuation, or continuation after amendment, of the Plan in its 
meeting minutes, which must be made and preserved for a period of not 
less than six years from the date of such meeting, the first two years 
in an easily accessible place.

6. Public Offerings

    The Fund will not make a public offering of the Fund's common 
shares other than:
    (a) A rights offering below NAV to holders of the Fund's common 
shares;
    (b) An offering in connection with a dividend reinvestment plan, 
merger, consolidation, acquisition, spin-off or reorganization of the 
Fund; or
    (c) An offering other than an offering described in conditions 6(a) 
and 6(b) above, provided that, with respect to such other offering:
    (i) The Fund's annualized distribution rate for the six months 
ending on the last day of the month ended immediately prior to the most 
recent

[[Page 45308]]

distribution record date,\5\ expressed as a percentage of NAV as of 
such date, is no more than 1 percentage point greater than the Fund's 
average annual total return for the 5-year period ending on such 
date,\6\ and
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    \5\ If the Fund has been in operation fewer than six months, the 
measured period will begin immediately following the Fund's first 
public offering.
    \6\ If the Fund has been in operation fewer than five years, the 
measured period will begin immediately following the Fund's first 
public offering.
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    (ii) The transmittal letter accompanying any registration statement 
filed with the Commission in connection with such offering discloses 
that the Fund has received an order under section 19(b) to permit it to 
make periodic distributions of long-term capital gains with respect to 
its common shares as frequently as twelve times each year, and as 
frequently as distributions are specified by or determined in 
accordance with the terms of any outstanding preferred shares as such 
Fund may issue.

7. Amendments to Rule 19b-1

    The requested order will expire on the effective date of any 
amendment to rule 19b-1 that provides relief permitting certain closed-
end investment companies to make periodic distributions of long-term 
capital gains with respect to their outstanding common shares as 
frequently as twelve times each year.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-19052 Filed 7-27-11; 8:45 am]
BILLING CODE 8011-01-P


