
[Federal Register Volume 82, Number 58 (Tuesday, March 28, 2017)]
[Notices]
[Pages 15407-15408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06084]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32540; File No. 812-14677]


AB Bond Fund, Inc., et al.

March 22, 2017.
AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION:  Notice.

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    Notice of an application for an order pursuant to: (a) Section 6(c) 
of the Investment Company Act of 1940 (``Act'') granting an exemption 
from sections 18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of 
the Act granting an exemption from section 12(d)(1) of the Act; (c) 
sections 6(c) and 17(b) of the Act granting an exemption from sections 
17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) section 17(d) of 
the Act and rule 17d-1 under the Act to permit certain joint 
arrangements and transactions. Applicants request an order that would 
permit certain registered open-end management investment companies to 
participate in a joint lending and borrowing facility.

Applicants: AB Bond Fund, Inc., AB Cap Fund, Inc., AB Core 
Opportunities Fund, Inc., AB Corporate Shares, AB Discovery Growth 
Fund, Inc., AB Equity Income Fund, Inc., AB Government Exchange 
Reserves, AB Fixed-Income Shares, Inc., AB Global Bond Fund, Inc., AB 
Global Real Estate Investment Fund, Inc., AB Global Risk Allocation 
Fund, Inc., AB Sustainable Global Thematic, Inc., AB Relative Value 
Fund, Inc., AB High Income Fund, Inc., AB Institutional Funds, Inc., AB 
International Growth Fund, Inc., AB Large Cap Growth Fund, Inc., AB 
Municipal Income Fund, Inc., AB Municipal Income Fund II, AB Trust, AB 
Unconstrained Bond Fund, Inc., AB Variable Products Series Fund, Inc., 
Sanford C. Bernstein Fund, Inc., Sanford C. Bernstein Fund II, Inc., 
Bernstein Fund, Inc., The AB Pooling Portfolios, The AB Portfolios, 
Alliance California Municipal Income Fund, Inc., Alliance Bernstein 
Global High Income Fund, Inc., AllianceBernstein National Municipal 
Income Fund, Inc. and AB Multi-Manager Alternative Fund, each an 
investment company organized as a Maryland corporation or a 
Massachusetts business trust and registered under the Act as an open-
end or closed-end management investment company,\1\ and 
AllianceBernstein L.P. (the ``Adviser''), a Delaware limited 
partnership registered as an investment adviser under the Investment 
Advisers Act of 1940.
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    \1\ The Funds (as defined below) that are closed-end management 
investment companies will not participate as borrowers in the 
interfund lending facility.

Filing Dates: The application was filed on July 22, 2016 and amended on 
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January 11, 2017.

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 April 17, 2017 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: Emile D. Wrapp, 
AllianceBernstein L.P., 1345 Avenue of the Americas, New York, New York 
10105 and Paul M. Miller, Seward & Kissel LLP, 901 K Street NW., Suite 
800, Washington, DC 20001.

FOR FURTHER INFORMATION CONTACT:  Emerson S. Davis, Senior Counsel, at 
(202) 551-6868 or Nadya Roytblat, Assistant Chief Counsel, at (202) 
551-6823 (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. Applicants request an order that would permit the applicants to 
participate in an interfund lending facility where each Fund could lend 
money directly to and borrow money directly from other Funds to cover 
unanticipated cash shortfalls, such as unanticipated redemptions or 
trade fails.\2\ The Funds will not borrow under the facility for 
leverage purposes and the loans' duration will be no more than 7 
days.\3\
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    \2\ Applicants request that the order apply to the applicants 
and to any existing or future registered open-end or closed-end 
management investment company or series thereof for which the 
Adviser or any successor thereto or an investment adviser 
controlling, controlled by, or under common control with the Adviser 
or any successor thereto serves as investment adviser (each a 
``Fund'' and collectively the ``Funds'' and each such investment 
adviser an ``Adviser''). For purposes of the requested order, 
``successor'' is limited to any entity that results from a 
reorganization into another jurisdiction or a change in the type of 
a business organization.
    \3\ Any Fund, however, will be able to call a loan on one 
business day's notice.
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    2. Applicants anticipate that the proposed facility would provide a 
borrowing Fund with a source of liquidity at a rate lower than the bank 
borrowing rate at times when the cash position of the Fund is 
insufficient to meet temporary cash requirements. In addition, Funds 
making short-term cash loans directly to other Funds would earn 
interest at a rate higher than they otherwise could obtain from 
investing their cash in repurchase agreements or certain other short 
term money market instruments. Thus, applicants assert that the 
facility would benefit both borrowing and lending Funds.
    3. Applicants agree that any order granting the requested relief 
will be subject to the terms and conditions stated in the application. 
Among others, the Adviser, through a designated committee, would 
administer the facility as a disinterested fiduciary as part of its 
duties under the investment management and administrative agreements 
with the Funds and would receive no additional fee as compensation for 
its services in connection with the administration of the facility. The 
facility would be subject to oversight and certain approvals by the 
Funds' Board, including, among others, approval of the interest rate 
formula and of the method for allocating loans across Funds, as well as 
review of the process in place to evaluate the liquidity implications 
for the Funds. A Fund's aggregate outstanding interfund loans will not 
exceed 15% of its net assets, and the Fund's loans to any one Fund will 
not exceed 5% of the lending Fund's net assets.\4\
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    \4\ Under certain circumstances, a borrowing Fund will be 
required to pledge collateral to secure the loan.
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    4. Applicants assert that the facility does not raise the concerns 
underlying

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section 12(d)(1) of the Act given that the Funds are part of the same 
group of investment companies and there will be no duplicative costs or 
fees to the Funds.\5\ Applicants also assert that the proposed 
transactions do not raise the concerns underlying sections 17(a)(1), 
17(a)(3), 17(d) and 21(b) of the Act as the Funds would not engage in 
lending transactions that unfairly benefit insiders or are detrimental 
to the Funds. Applicants state that the facility will offer both 
reduced borrowing costs and enhanced returns on loaned funds to all 
participating Funds and each Fund would have an equal opportunity to 
borrow and lend on equal terms based on an interest rate formula that 
is objective and verifiable. With respect to the relief from section 
17(a)(2) of the Act, applicants note that any collateral pledged to 
secure an interfund loan would be subject to the same conditions 
imposed by any other lender to a Fund that imposes conditions on the 
quality of or access to collateral for a borrowing (if the lender is 
another Fund) or the same or better conditions (in any other 
circumstance).\6\
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    \5\ Applicants state that the obligation to repay an interfund 
loan could be deemed to constitute a security for the purposes of 
sections 17(a)(1) and 12(d)(1) of the Act.
    \6\ Applicants state that any pledge of securities to secure an 
interfund loan could constitute a purchase of securities for 
purposes of section 17(a)(2) of the Act.
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    5. Applicants also believe that the limited relief from section 
18(f)(1) of the Act that is necessary to implement the facility 
(because the lending Funds are not banks) is appropriate in light of 
the conditions and safeguards described in the application and because 
the open-end Funds would remain subject to the requirement of section 
18(f)(1) that all borrowings of the open-end Fund, including combined 
interfund loans and bank borrowings, have at least 300% asset coverage.
    6. Section 6(c) of the Act permits the Commission to exempt any 
persons or transactions from any provision of 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 
policy and provisions of the Act. Section 12(d)(1)(J) 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 provision of section 12(d)(1) if the exemption 
is consistent with the public interest and the protection of investors. 
Section 17(b) of the Act authorizes the Commission to grant an order 
permitting a transaction otherwise prohibited by section 17(a) if it 
finds that (a) the terms of the proposed transaction are fair and 
reasonable and do not involve overreaching on the part of any person 
concerned; (b) the proposed transaction is consistent with the policies 
of each registered investment company involved; and (c) the proposed 
transaction is consistent with the general purposes of the Act. Rule 
17d-1(b) under the Act provides that in passing upon an application 
filed under the rule, the Commission will consider whether the 
participation of the registered investment company in a joint 
enterprise, joint arrangement or profit sharing plan on the basis 
proposed is consistent with the provisions, policies and purposes of 
the Act and the extent to which such participation is on a basis 
different from or less advantageous than that of the other 
participants.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-06084 Filed 3-27-17; 8:45 am]
 BILLING CODE 8011-01-P


