
[Federal Register Volume 78, Number 46 (Friday, March 8, 2013)]
[Notices]
[Pages 15062-15065]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05424]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30413; 812-14003]


Cohen & Steers Real Assets Fund, Inc., et al.; Notice of 
Application

March 4, 2013.
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 section 15(a) of 
the Act and rule 18f-2 under the Act, as well as from certain 
disclosure requirements.

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Summary of the Application: Applicants request an order that would 
permit them to enter into and materially amend subadvisory agreements 
without shareholder approval and would grant relief from certain 
disclosure requirements.

Applicants: Cohen & Steers Real Assets Fund, Inc. (the 
``Corporation''), Cohen & Steers Real Assets Fund, Ltd. (the 
``Subsidiary''), and Cohen & Steers Capital Management, Inc. (``Cohen & 
Steers'' or the ``Advisor'').

DATES:  Filing Dates: The application was filed on January 30, 2012, 
and amended on July 13, 2012, October 4, 2012, and February 6, 2013.

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 March 28, 2013, 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: 
the Corporation and the Advisor, 280 Park Avenue, 10th floor, New York, 
NY 10017; the Subsidiary, Maples Corporate Services Limited, PO Box 
309, Ugland House, Grand Cayman, Cayman Islands KY1-1104.

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 Corporation is a Maryland corporation registered under the 
Act as

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an open-end management investment company and is advised by the Advisor 
and various affiliated and unaffiliated subadvisors (any unaffiliated 
subadvisors, ``Subadvisors''). The Corporation currently employs two 
unaffiliated subadvisors.\1\ The Advisor is, and any other Advisor will 
be, registered as an investment adviser under the Investment Advisers 
Act of 1940 (``Advisers Act''). Cohen & Steers serves as the investment 
Advisor of the initial Corporation under an investment advisory 
agreement (``Advisory Agreement'') \2\ with the Corporation. Cohen & 
Steers or another Advisor will serve as investment adviser to any 
future Corporations. The Advisory Agreement was approved by the 
Corporation's initial shareholder and the Corporation's board of 
directors (that board of directors, and the boards of directors of any 
future Corporation, each a ``Board''), including a majority of the 
directors who are not ``interested persons,'' as defined in section 
2(a)(19) of the Act, of either the Corporation or the Advisor 
(``Independent Directors'') in the manner required by sections 15(a) 
and (c) of the Act and rule 18f-2 under the Act.
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    \1\ Applicants also request relief with respect to any other 
existing or future open-end management investment company or series 
thereof that: (a) Is advised by the Advisor including any entity 
controlling, controlled by, or under common control with the Advisor 
or its successor (each, also an ``Advisor''); (b) uses the manager 
of managers structure (``Manager of Managers Structure'') described 
in the application; and (c) complies with the terms and conditions 
of the application (each, also a ``Corporation''). The only existing 
registered open-end management investment company that currently 
intends to rely on the requested order is named as an applicant. For 
purposes of the requested order, ``successor'' is limited to an 
entity that results from a reorganization into another jurisdiction 
or a change in the type of business organization. If the name of any 
Corporation contains the name of a Subadvisor, the name of the 
Advisor that serves as the primary investment adviser to that 
Corporation will precede the name of the Subadvisor.
    \2\ ``Advisory Agreement'' includes advisory agreements with 
Advisors for future Corporations.
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    2. Under the terms of the Advisory Agreement, the Advisor is 
responsible for the overall management of the Corporation's business 
affairs and selecting the Corporation's investments in accordance with 
its investment objectives, policies and restrictions. For the 
investment advisory services that it provides to the Corporation, the 
Advisor receives the fee specified in the Advisory Agreement. The 
Advisory Agreement also permits the Advisor to retain one or more 
Subadvisors for the purpose of managing the investments of the 
Corporation. Pursuant to this authority, the Advisor has entered into 
investment subadvisory agreements (``Subadvisory Agreements'') with two 
Subadvisors to provide investment advisory services to the 
Corporation.\3\ Each Subadvisor is or will be registered as an 
investment adviser under the Advisers Act or not subject to such 
registration. The Advisor will supervise, evaluate and allocate assets 
to the Subadvisors, and make recommendations to the Board about their 
hiring, retention or release, at all times subject to the authority of 
the Board. Under the terms of the current Advisory Agreement, the 
Advisor will compensate the Subadvisors out of the fees the Advisor 
receives from the Corporation.\4\
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    \3\ Each of these Subadvisory Agreements was approved by the 
Board, including by a majority of the Independent Directors, and the 
initial shareholder of the Corporation in accordance with sections 
15(a) and 15(c) of the Act and rule 18f-2 under the 1940 Act.
    \4\ To the extent a future Corporation pays subadvisory fees 
directly from its assets, any changes to a Subadvisory Agreement 
that would result in an increase in the total management and 
advisory fees payable by the Corporation will be required to be 
approved by the shareholders of that Corporation.
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    3. The Subsidiary is a Cayman Islands corporation wholly-owned by 
the Corporation.\5\ The Subsidiary will initially be managed by a 
Subadvisor, and is expected to provide the Corporation with exposure to 
commodities. The Subsidiary has entered into an investment advisory 
agreement with the Advisor (the ``Subsidiary Advisory Agreement''), 
which has been approved by the board of directors of the Subsidiary, 
pursuant to which the Advisor is responsible for the overall management 
of the Subsidiary's business affairs and selecting the Subsidiary's 
investments according to the Subsidiary's investment objectives, 
policies, and restrictions.\6\ Under the Subsidiary Advisory Agreement, 
the Advisor may retain one or more Subadvisors, to be compensated by 
the Advisor, for the purpose of managing the investment of the assets 
of the Subsidiary.
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    \5\ The term ``Subadvisor'' also includes any Subadvisor to the 
Subsidiary or to any wholly-owned subsidiary of any future 
registered open-end management company described in footnote 1 above 
(each such wholly-owned subsidiary included in the term 
``Subsidiary''). Applicants also request relief with respect to any 
Subadvisors who serve as Subadvisors to a Subsidiary. Where needed 
for purposes of the relief requested, Subsidiaries are also included 
in the term ``Corporation''.''
    \6\ In all cases, the Advisor to a Corporation will be the 
Advisor to each Subsidiary owned by that Corporation and will have 
overall supervisory responsibility for the general management and 
investment of the Subsidiary's assets, subject to review and 
approval of the Board of that Corporation. The terms of the 
Subsidiary Advisory Agreement comply, and of future Subsidiary 
Advisory Agreements will comply, with Section 15(a) of the Act. 
Approval of the Subsidiary Advisory Agreement was, and for future 
Subsidiary Advisory Agreements will be, effected in the manner 
required by sections 15(a) and (c) of the Act and rule 18f-2 
thereunder as if the Subsidiary Advisory Agreement were between the 
Advisor to the Subsidiary and the Corporation that owns that 
Subsidiary.
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    4. Applicants request an order to permit the Advisor, subject to 
Board approval, to enter into and materially amend Subadvisory 
Agreements without obtaining shareholder approval.\7\ The requested 
relief will not extend to any subadvisor that is an affiliated person, 
as defined in section 2(a)(3) of the Act, of a Corporation or the 
Advisor, other than by reason of serving as a subadvisor to a 
Corporation or a Corporation's wholly-owned subsidiary (an ``Affiliated 
Subadvisor''). Applicants acknowledge that any affiliated person of a 
Corporation also would be deemed to be an affiliated person of the 
Corporation's wholly-owned subsidiaries for purposes of the relief 
requested.
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    \7\ Each Subadvisory Agreement with respect to any Subsidiary 
will also be approved by the board of the Corporation that owns that 
Subsidiary, including in each case a majority of the Independent 
Directors of that Corporation, in accordance with sections 15(a) and 
15(c) of the Act.
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    5. Applicants also request an exemption from the various disclosure 
provisions described below that may require the Corporations to 
disclose fees paid by the Advisor to the Subadvisors. An exemption is 
requested to permit a Corporation to disclose (as both a dollar amount 
and as a percentage of each Corporation's net assets): (a) The 
aggregate fees paid to the Advisor and any Affiliated Subadvisors; and 
(b) the aggregate fees paid to Subadvisors (collectively, ``Aggregate 
Fee Disclosure''). Any Corporation that employs an Affiliated 
Subadvisor will provide separate disclosure of any fees paid to the 
Affiliated Subadvisor.
    6. The Corporations will inform shareholders of the hiring of a new 
Subadvisor pursuant to the following procedures (``Modified Notice and 
Access Procedures''): (a) Within 90 days after a new Subadvisor is 
hired for any Corporation, that Corporation will send its shareholders 
either a Multi-manager Notice or a Multi-manager Notice and Multi-
manager Information Statement; \8\

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and (b) the Corporation will make the Multi-manager Information 
Statement available on the Web site identified in the Multi-manager 
Notice no later than when the Multi-manager Notice (or Multi-manager 
Notice and Multi-manager Information Statement) is first sent to 
shareholders, and will maintain it on that Web site for at least 90 
days.
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    \8\ The ``Multi-manager Notice'' will be modeled on a Notice of 
Internet Availability as defined in rule 14a-16 under the Securities 
Exchange Act of 1934 (``Exchange Act''), and specifically will, 
among other things: (a) Summarize the relevant information regarding 
the new Subadvisor; (b) inform shareholders that the Multi-manager 
Information Statement is available on a Web site; (c) provide the 
Web site address; (d) state the time period during which the Multi-
manager Information Statement will remain available on that Web 
site; (e) provide instructions for accessing and printing the Multi-
manager Information Statement; and (f) instruct the shareholder that 
a paper or email copy of the Multi-manager Information Statement may 
be obtained, without charge, by contacting the Corporations.
    A ``Multi-manager Information Statement'' will meet the 
requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 
14A under the Exchange Act for an information statement. Multi-
manager Information Statements will be filed electronically with the 
Commission via the EDGAR system.
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Applicants' Legal Analysis

    1. Section 15(a) of the Act provides, in relevant part, that it is 
unlawful for any person to act as an investment adviser to a registered 
investment company except pursuant to a written contract that has been 
approved by the vote of a majority of the company's outstanding voting 
securities. Rule 18f-2 under the Act provides that each series or class 
of stock in a series investment company affected by a matter must 
approve that matter if the Act requires shareholder approval.
    2. Form N-1A is the registration statement used by open-end 
investment companies. Item 19(a)(3) of Form N-1A requires disclosure of 
the method and amount of the investment adviser's compensation.
    3. Rule 20a-1 under the Act requires proxies solicited with respect 
to an investment company to comply with Schedule 14A under the Exchange 
Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 
Schedule 14A, taken together, require a proxy statement for a 
shareholder meeting at which the advisory contract will be voted upon 
to include the ``rate of compensation of the investment adviser,'' the 
``aggregate amount of the investment adviser's fees,'' a description of 
the ``terms of the contract to be acted upon,'' and, if a change in the 
advisory fee is proposed, the existing and proposed fees and the 
difference between the two fees.
    4. Regulation S-X sets forth the requirements for financial 
statements required to be included as part of investment company 
registration statements and shareholder reports filed with the 
Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require 
that investment companies include in their financial statements 
information about investment advisory fees.
    5. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provisions of the Act, or 
from any rule thereunder, 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 policy and provisions of the 
Act. Applicants state that the requested relief meets this standard for 
the reasons discussed below.
    6. Applicants assert that the shareholders are relying on the 
Advisor's expertise to select one or more Subadvisors best suited to 
achieve a Corporation's investment objectives. Applicants assert that, 
from the perspective of the investor, the role of the Subadvisors is 
comparable to that of the individual portfolio managers employed by the 
Advisor. Applicants state that requiring shareholder approval of each 
Subadvisory Agreement would impose costs and unnecessary delays on the 
Corporations, and may preclude the Advisor from acting promptly in a 
manner considered advisable by the Board. Applicants note that the 
Advisory Agreement, the Subsidiary Advisory Agreement, and any 
subadvisory agreements with Affiliated Subadvisors will remain subject 
to section 15(a) of the Act and rule 18f-2 under the Act.
    7. Applicants assert that many Subadvisors use a ``posted'' rate 
schedule to set their fees. Applicants state that, while Subadvisors 
are willing to negotiate fees lower than those posted in the schedule, 
they are reluctant to do so where the fees are disclosed to other 
prospective and existing customers. Applicants submit that the 
requested relief will allow the Adviser to negotiate more effectively 
with each Subadvisor.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Before a Corporation may rely on the requested order, the 
operation of the Corporation in the manner described in the application 
will be approved by a majority of the Corporation's outstanding voting 
securities, as defined in the Act, or in the case of a Corporation 
whose public shareholders purchase shares on the basis of a prospectus 
containing the disclosure contemplated by condition 2 below, by the 
initial shareholder(s) before offering shares of that Corporation to 
the public.
    2. Each Corporation relying on the requested order will disclose in 
its prospectus the existence, substance, and effect of any order 
granted pursuant to the application. Each Corporation will hold itself 
out to the public as utilizing the Manager of Managers Structure. The 
prospectus will prominently disclose that the Advisor has ultimate 
responsibility (subject to oversight by the Board) to oversee the 
Subadvisors and recommend their hiring, termination, and replacement.
    3. Corporations will inform shareholders of the hiring of a new 
Subadvisor within 90 days after the hiring of the new Subadvisor 
pursuant to the Modified Notice and Access Procedures.
    4. The Advisor will not enter into a subadvisory agreement with any 
Affiliated Subadvisor without such agreement, including the 
compensation to be paid thereunder, being approved by the shareholders 
of the applicable Corporation.
    5. At all times, at least a majority of the Board will be 
Independent Directors, and the nomination of new or additional 
Independent Directors will be placed within the discretion of the then-
existing Independent Directors.
    6. Whenever a subadvisor change is proposed for a Corporation with 
an Affiliated Subadvisor, the Board, including a majority of the 
Independent Directors, will make a separate finding, reflected in the 
applicable Board minutes, that such change is in the best interests of 
the Corporation and its shareholders, and does not involve a conflict 
of interest from which the Advisor or the Affiliated Subadvisor derives 
an inappropriate advantage.
    7. Independent legal counsel, as defined in Rule 0-1(a)(6) under 
the Act, will be engaged to represent the Independent Directors. The 
selection of such counsel will be within the discretion of the then 
existing Independent Directors.
    8. The Advisor will provide general management services to each 
Corporation, including overall supervisory responsibility for the 
general management and investment of each Corporation's assets, and, 
subject to review and approval of the Board, will: (a) Set each 
Corporation's overall investment strategies; (b) evaluate, select and 
recommend Subadvisors to manage all or a part of each Corporation's 
assets; (c) allocate and, when appropriate, reallocate each 
Corporation's assets among one or more Subadvisors; (d) monitor and 
evaluate the performance of Subadvisors; and (e) implement procedures 
reasonably designed to ensure that the Subadvisors comply with each 
Corporation's investment objective, policies and restrictions.

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    9. No Director or officer of a Corporation, or director, manager or 
officer of the Advisor, will own, directly or indirectly (other than 
through a pooled investment vehicle that is not controlled by such 
person), any interest in a Subadvisor, except for (a) ownership of 
interests in the Advisor or any entity that controls, is controlled by, 
or is under common control with the Advisor, or (b) ownership of less 
than 1% of the outstanding securities of any class of equity or debt of 
any publicly traded company that is either a Subadvisor or an entity 
that controls, is controlled by or is under common control with a 
Subadvisor. For any Corporation that owns a Subsidiary, this condition 
shall also apply to the Directors and officers of that Corporation with 
respect to any interest in a Subadvisor to that Corporation's 
Subsidiaries.
    10. Each Corporation will disclose in its registration statement 
the Aggregate Fee Disclosure.
    11. In the event the Commission adopts a rule under the Act 
providing substantially similar relief to that in the order requested 
in the application, the requested order will expire on the effective 
date of that rule.
    12. For any Corporation that pays subadvisory fees directly from 
its assets, any changes to a Subadvisory Agreement that would result in 
an increase in the total management and advisory fees payable by the 
Corporation will be required to be approved by the shareholders of that 
Corporation.
    13. Whenever a subadvisor is hired or terminated, the Advisor will 
provide the Board with information showing the expected impact on the 
profitability of the Advisor.
    14. Each Advisor will provide the Board, no less frequently than 
quarterly, with information about the profitability of the Advisor on a 
per Corporation basis. The information will reflect the impact on 
profitability of the hiring or termination of any subadvisor during the 
applicable quarter.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05424 Filed 3-7-13; 8:45 am]
BILLING CODE 8011-01-P


