
[Federal Register Volume 79, Number 121 (Tuesday, June 24, 2014)]
[Notices]
[Pages 35822-35823]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14659]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31087; 812-14297]


Northern Lights Fund Trust, et al.; Notice of Application

June 18, 2014.
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: 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: Northern Lights Fund Trust (the ``Trust''), Clark Capital 
Management Group, Inc. (``CLARK'') and Northern Lights Distributors, 
LLC (``NLD'').

DATES: Filing Date: The application was filed on April 2, 2014, and 
amended on June 11, 2014.

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 July 14, 2014, 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, Securities and Exchange Commission, 100 F Street 
NE., Washington, DC 20549-1090; Applicants: c/o James Ash, Gemini Fund 
Services, LLC, 80 Arkay Drive, Suite 110, Hauppauge, NY 11788.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876, or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Chief Counsel's Office).

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 for 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 Trust is organized as a Delaware statutory trust and is 
registered under the Act as an open-end management investment company. 
CLARK, a Pennsylvania corporation, is registered as an investment 
adviser under the Investment Advisers Act of 1940 (``Advisers Act''). 
CLARK currently serves as investment adviser to certain series of the 
Trust.\1\ NLD, a Nebraska limited liability company and a broker-dealer 
registered under the Securities and Exchange Act of 1934 (``Exchange 
Act''), serves as the distributor for the Funds (as defined below) that 
are series of the Trust.
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    \1\ Series of the Trust for which CLARK acts as investment 
adviser are the (i) Navigator Equity Hedged Fund, (ii) Navigator 
Duration Neutral Municipal Bond Fund, (iii) Navigator Sentry Managed 
Volatility Fund, and (iv) Navigator Fixed Income Total Return Fund.
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    2. Applicants request the exemption to the extent necessary to 
permit any existing or future series of the Trust and any other 
existing or future registered open-end management investment company or 
series thereof that (a) is advised by CLARK or any person controlling, 
controlled by or under common control with CLARK (any such adviser or 
CLARK, an ``Adviser''); (b) invests in other registered open-end 
management investment companies (``Underlying Funds'') in reliance on 
section 12(d)(1)(G) of the Act; and (c) 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 (the ``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'').\2\ Applicants also request that the order exempt any 
entity controlling, controlled by or under common control with NLD, 
that now or in the future acts as principal underwriter with respect to 
the transactions described in the application.
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    \2\ All entities that currently intend to rely on the requested 
order are named as applicants. Any other entity that relies on the 
order in the future will comply with the terms and condition of the 
application.
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    3. Consistent with its fiduciary obligations under the Act, each 
Fund's board of trustees will review the advisory fees charged by the 
Fund's 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 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 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

[[Page 35823]]

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 Exchange 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. Applicants submit that their request for relief 
meets this standard.
    5. Applicants request an order under section 6(c) of the Act for an 
exemption from rule 12d1-2(a) to allow the Funds to invest in Other 
Investments while investing in Underlying Funds. Applicants state that 
the Funds will comply with rule 12d1-2 under the Act, but for the fact 
that the Funds may invest a portion of their assets in Other 
Investments. Applicants assert that permitting the 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 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. 2014-14659 Filed 6-23-14; 8:45 am]
BILLING CODE 8011-01-P


