
[Federal Register Volume 81, Number 247 (Friday, December 23, 2016)]
[Notices]
[Pages 94457-94458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30936]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32395; File No. 812-14595]


Delaware Management Business Trust, et al.; Notice of Application

December 19, 2016.
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.\1\

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Applicants:  Delaware Management Business Trust (``DMBT''), a Delaware 
statutory trust registered under the Act as an open-end management 
investment company with multiple series, Delaware Management Company, a 
series of DMBT, registered as an investment adviser under the 
Investment Advisers Act of 1940 (the ``Initial Adviser'' or ``DMC''), 
Optimum Fund Trust, Delaware Group Adviser Funds, Delaware Group Cash 
Reserve, Delaware Group Equity Funds I, Delaware Group Equity Funds II, 
Delaware Group Equity Funds IV, Delaware Group Equity Funds V, Delaware 
Group Foundation Funds, Delaware Group Global & International Funds, 
Delaware Group Government Fund, Delaware Group Income Funds, Delaware 
Group Limited-Term Government Funds, Delaware Group State Tax-Free 
Income Trust, Delaware Group Tax-Free Fund, Delaware Pooled Trust, 
Delaware VIP Trust, Voyageur Insured Funds, Voyageur Intermediate Tax 
Free Funds, Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur 
Mutual Funds III, and Voyageur Tax Free Funds (each, a ``Trust'' and, 
collectively with DBMT and DMC, the ``Applicants'').
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    \1\ The requested order would supersede a previous order 
obtained by the Applicants granting relief solely with respect to 
Non-Affiliated Sub-Advisers (Delaware Management Business Trust, et 
al., Investment Company Act Rel. Nos. 27512 (Oct. 10, 2006) (notice) 
and 27547 (Nov. 7, 2006) (order) (``Prior Order''). If a Subadvised 
Series has obtained shareholder approval to operate as such with 
respect to Non-Affiliated Sub-Advisers only in the manner described 
in this Application and has met all other terms and conditions of 
the requested order, the Subadvised Series may rely on the order 
requested in this Application solely with respect to Non-Affiliated 
Sub-Advisers unless and until it obtains shareholder approval with 
respect to Wholly-Owned Sub-Advisers.

Filing Dates:  The application was filed on December 23, 2015, and 
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amended on June 8, 2016 and October 25, 2016.

Hearing or Notification of Hearing:  An order granting the requested 
relief 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 January 13, 2017, and should be accompanied by proof of 
service on the applicants, in the form of

[[Page 94458]]

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: One Commerce Square, 
2005 Market Street, Philadelphia, PA 19103.

FOR FURTHER INFORMATION CONTACT:  Jessica Shin, Attorney-Adviser, at 
(202) 551-5921, or David J. Marcinkus, 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.

Summary of the Application

    1. The Adviser will serve as the investment adviser to the 
Subadvised Series pursuant to an investment advisory agreement with the 
relevant Trust (each an ``Investment Management Agreement'').\2\ The 
Adviser will provide the Funds with continuous and comprehensive 
investment management services subject to the supervision of, and 
policies established by, the board of trustees of the Trust 
(``Board''). 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 Subadvised Series, subject to the 
supervision and direction of the Adviser.\3\ The primary responsibility 
for managing each Subadvised Series 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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    \2\ Applicants request relief with respect to the named 
Applicants, as well as to any 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 the Initial 
Adviser or any entity controlling, controlled by, or under common 
control with, the Initial Adviser or its successors (each, also an 
``Adviser''); (b) uses the multi-manager structure described in the 
application; and (c) complies with the terms and conditions set 
forth in the application (each, a ``Subadvised Series''). 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.
    \3\ A ``Sub-Adviser'' for a Subadvised Series is (1) an indirect 
or direct ``wholly owned subsidiary'' (as such term is defined in 
the Act) of the Adviser for that Subadvised Series, or (2) a sister 
company of the Adviser for that Subadvised Series that is an 
indirect or direct ``wholly-owned subsidiary'' of the same company 
that, indirectly or directly, wholly owns the Adviser (each of (1) 
and (2) a ``Wholly-Owned Sub-Adviser'' and collectively, the 
``Wholly-Owned Sub-Advisers''), or (3) not an ``affiliated person'' 
(as such term is defined in section 2(a)(3) of the Act) of the 
Subadvised Series, except to the extent that an affiliation arises 
solely because the Sub-Adviser serves as a sub-adviser to a 
Subadvised Series (``Non-Affiliated Sub-Advisers'').
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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.\4\ Applicants 
also seek an exemption from the Disclosure Requirements to permit a 
Subadvised Series to disclose (as both a dollar amount and a percentage 
of the Subadvised Series' net assets): (a) The aggregate fees paid to 
the Adviser and any Wholly-Owned Sub-Adviser; (b) the aggregate fees 
paid to Non-Affiliated Sub-Advisers; and (c) the fee paid to each 
Affiliated Sub-Adviser (collectively, Aggregate Fee Disclosure'').
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    \4\ The requested relief will not extend to any sub-adviser, 
other than a Wholly-Owned Sub-Adviser, who is an affiliated person, 
as defined in Section 2(a)(3) of the Act, of the Subadvised Series, 
the Trust or of the Adviser, other than by reason of serving as a 
sub-adviser to one or more of the Subadvised Series (``Affiliated 
Sub-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 Subadvised Series shareholders and 
notification about sub-advisory changes and enhanced Board oversight to 
protect the interests of the Subadvised Series' 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 Investment 
Management 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 Subadvised Series. 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 Subadvised Series.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-30936 Filed 12-22-16; 8:45 am]
 BILLING CODE 8011-01-P


