
[Federal Register Volume 80, Number 226 (Tuesday, November 24, 2015)]
[Notices]
[Pages 73262-73263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29868]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31905; 812-14451]


ETF Series Solutions and U.S. Global Investors, Inc.; Notice of 
Application November 18, 2015

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 in Rule 20a-1 under the Act, Item 19(a)(3) of 
Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 
Schedule 14A under the Securities Exchange Act of 1934, and Sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements''). 
The requested exemption would permit an investment adviser to hire and 
replace certain sub-advisers without shareholder approval and grant 
relief from the Disclosure Requirements as they relate to fees paid to 
the sub-advisers.

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Applicants:  ETF Series Solutions (the ``Trust''), a Delaware statutory 
trust registered under the Act as an open-end management investment 
company with multiple series, and U.S. Global Investors, Inc., a Texas 
corporation registered as an investment adviser under the Investment 
Advisers Act of 1940 (``the ``Adviser,'' and, collectively with the 
Trust, the ``Applicants'').

[[Page 73263]]


Filing Dates:  The application was filed April 28, 2015, and amended on 
September 25, 2015.

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 14, 2015, and should be accompanied by proof of 
service on the applicants, in the form of an affidavit or, for lawyers, 
a certificate of service. Pursuant to Rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, 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: Susan B. McGee and 
James L. Love, U.S. Global Investors, Inc., 7900 Callaghan Road, San 
Antonio, TX 78229; and Michael D. Barolsky, ETF Series Solutions, 615 
E. Michigan Street, Milwaukee, WI 53202.

FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at 
(202) 551-6868, or Daniele Marchesani, 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 an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Summary of the Application

    1. The Adviser will serve as the investment adviser to the Funds 
pursuant to an investment advisory agreement with the Trust (the 
``Investment Management Agreement'').\1\ The Adviser will provide the 
Funds with continuous and comprehensive investment management services 
subject to the supervision of, and policies established by, each Fund's 
board of trustees (``Board'').\2\ The Investment Management Agreement 
permits the Adviser, subject to the approval of the Board, to delegate 
to one or more sub-advisers (each, a ``Sub-Adviser'' and collectively, 
the ``Sub-Advisers'') the responsibility to provide the day-to-day 
portfolio investment management of each Fund, subject to the 
supervision and direction of the Adviser. The primary responsibility 
for managing the Funds will remain vested in the Adviser. The Adviser 
will hire, evaluate, allocate assets to and oversee the Sub-Advisers, 
including determining whether a Sub-Adviser should be terminated, at 
all times subject to the authority of the Board.
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    \1\ Applicants request relief with respect to any existing and 
any future series of the Trust and any other registered open-end 
management company or series thereof that: (a) Is advised by the 
Adviser or its successor or by a person controlling, controlled by, 
or under common control with the Adviser or its successor (each, 
also an ``Adviser''); (b) uses the manager of managers structure 
described in the application; and (c) complies with the terms and 
conditions of the application (any such series, a ``Fund'' and 
collectively, the ``Funds''). 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.
    \2\ Certain Funds (each, a ``Feeder Fund'') may invest 
substantially all of their assets in a ``Master Fund'' pursuant to 
Section 12(d)(1)(E) of the Act.
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    2. Applicants request an exemption to permit the Adviser, subject 
to Board approval, to hire certain Sub-Advisers pursuant to Sub-
Advisory Agreements and materially amend existing Sub-Advisory 
Agreements without obtaining the shareholder approval required under 
Section 15(a) of the Act and Rule 18f-2 under the Act.\3\ Applicants 
also seek an exemption from the Disclosure Requirements to permit a 
Fund to disclose (as both a dollar amount and a percentage of the 
Fund's net assets): (a) The aggregate fees paid to the Adviser and any 
Wholly-Owned Sub-Advisers; and (b) the aggregate fees paid to Sub-
Advisers other than Affiliated Sub-Advisers and Wholly-Owned Sub-
Advisers; and (c) the fee paid to each Affiliated Sub-Adviser 
(collectively, ``Aggregate Fee Disclosure'').
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    \3\ The requested relief will not extend to any Sub-Adviser, 
other than a Wholly-Owned Sub-Adviser, that is an affiliated person, 
as defined in Section 2(a)(3) of the Act, of a Fund, a Feeder Fund 
or the Adviser, other than by reason of serving as a sub-adviser to 
one or more of the Funds (``Affiliated Sub-Adviser''). A ``Wholly-
Owned Sub-Adviser'' is (1) an indirect or direct ``wholly owned 
subsidiary'' (as such term is defined in Section 2(a)(43) of the 
Act) of the Adviser for that Fund, or (2) a sister company of the 
Adviser for that Fund that is an indirect or direct wholly-owned 
subsidiary of the same company that, indirectly or directly, wholly 
owns the Adviser.
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    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the Application. 
Such terms and conditions provide for, among other safeguards, 
appropriate disclosure to Fund shareholders and notification about sub-
advisory changes and enhanced Board oversight to protect the interests 
of the Funds' shareholders.
    4. 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 
any rule thereunder, if such relief is necessary or appropriate in the 
public interest and consistent with the protection of investors and 
purposes fairly intended by the policy and provisions of the Act. 
Applicants believe that the requested relief meets this standard 
because, as further explained in the Application, the Advisory 
Agreements will remain subject to shareholder approval, while the role 
of the Sub-Advisers is substantially similar to that of individual 
portfolio managers, so that requiring shareholder approval of Sub-
Advisory Agreements would impose unnecessary delays and expenses on the 
Funds. Applicants believe that the requested relief from the Disclosure 
Requirements meets this standard because it will improve the Adviser's 
ability to negotiate fees paid to the Sub-Advisers that are more 
advantageous for the Funds.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-29868 Filed 11-23-15; 8:45 am]
 BILLING CODE 8011-01-P


