[Federal Register Volume 85, Number 87 (Tuesday, May 5, 2020)]
[Notices]
[Pages 26760-26762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09612]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33859; 812-14774-02]


USCF Advisers LLC, et al.

April 30, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    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.

Applicants:  USCF ETF Trust (the ``Trust''), a Delaware statutory trust 
registered under the Act as an open-end management investment company 
with multiple series; USCF Cayman Commodity 2 (the ``Commodity Strategy 
Subsidiary''), a Cayman Islands corporation wholly owned by the USCF 
SummerHaven Dynamic Commodity Strategy No K-1 Fund (the ``Commodity 
Strategy Fund''), a series of the Trust; and USCF Advisers LLC, a 
Delaware limited liability company registered as an investment adviser 
under the Investment Advisers Act of 1940 (``USCF Advisers'' or the 
``Advisor,'' and, collectively with the Trust and the Commodity 
Strategy Subsidiary, the ``Applicants'').

Filing Dates:  The application was filed May 15, 2017, and amended on 
December 26, 2019, April 2, 2020, and April 30, 2020.

Hearing or Notification of Hearing:  An order granting the requested 
relief will be issued unless the Commission

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orders a hearing. Interested persons may request a hearing by emailing 
the Commission's Secretary at Secretarys-Office@sec.gov and serving 
applicants with a copy of the request by email. Hearing requests should 
be received by the Commission by 5:30 p.m. on May 26, 2020, 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 emailing the Commission's Secretary at Secretarys-Office@sec.gov.

ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: Attn: 
General Counsel, exemptivenotices@uscfinvestments.com.

FOR FURTHER INFORMATION CONTACT: Jill Ehrlich, Senior Counsel, at (202) 
551-6819, or Andrea Ottomanelli Magovern, 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 website 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 Advisor serves as the investment adviser to the Funds (as 
defined below) pursuant to investment advisory agreements with the 
Funds (the ``Advisory Agreements'').\1\ The Advisor 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''). The Advisory Agreements permit the 
Advisor, subject to the approval of the Board, to delegate to one or 
more sub-advisers (each, a ``Subadvisor'' and collectively, the 
``Subadvisors'') the responsibility to provide the day-to-day portfolio 
investment management of each Fund (either directly or through such 
Fund's direct wholly-owned subsidiary), subject to the supervision and 
direction of the Advisor. The primary responsibility for managing the 
Funds will remain vested in the Advisor. The Advisor will hire, 
evaluate, allocate assets to and oversee the Subadvisors, including 
determining whether a Subadvisor 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 or 
future series of the Trust and any other registered open-end 
management investment company or series thereof that: (a) Is advised 
by USCF Advisers or any entity controlling, controlled by or under 
common control with USCF Advisers or its successors (each, also an 
``Advisor''); (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, including the Commodity 
Strategy Fund, a ``Fund''). 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 
business organization.
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    2. Each Fund may pursue its investment strategies by investing 
through a direct wholly-owned subsidiary (each such subsidiary, 
including the Commodity Strategy Subsidiary, a ``Subsidiary''). The 
Advisor has entered into an investment advisory agreement with the 
Commodity Strategy Subsidiary (the ``Commodity Strategy Subsidiary 
Advisory Agreement''), and any future Subsidiary will enter into an 
investment advisory agreement with the respective Advisor (together 
with the Commodity Strategy Subsidiary Advisory Agreement, the 
``Subsidiary Advisory Agreements'').\2\ In all cases, an Advisor will 
be the entity providing general management services to each Fund, 
including overall supervisory responsibility for the general management 
and investment of the Fund's assets (either directly or through such 
Fund's Subsidiary, if any), and, subject to review and approval of the 
Board, will: (a) Set such Fund's (including, if any, its Subsidiary's) 
overall investment strategies; (b) evaluate, select and recommend 
Subadvisors to manage all or a portion of the Fund's assets (directly 
or through the Fund's Subsidiary, if any); (c) allocate and, when 
appropriate, reallocate the Fund's assets among one or more Subadvisors 
(including by allocating and reallocating assets between and among the 
Fund and, if any, its Subsidiary); (d) monitor and evaluate the 
performance of Subadvisors; and (e) implement procedures reasonably 
designed to ensure that the Subadvisors comply with the investment 
objective, policies and restrictions of the Fund and the Subsidiary, if 
any.
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    \2\ The Commodity Strategy Subsidiary Advisory Agreement has 
been, and any future Subsidiary Advisory Agreement will be, approved 
by the Board, including a majority of the trustees who are not 
``interested persons'' (as defined in section 2(a)(19) of the Act) 
of the Fund or the Advisor, and the Fund's shareholders.
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    3. Applicants request an order exempting Applicants from section 
15(a) of the Act and rule 18f-2 thereunder to permit the Trust, on 
behalf of a Fund, and/or its Advisor, subject to the approval of the 
Board, to enter into and materially amend investment subadvisory 
agreements with Subadvisors (``Subadvisory Agreements'') without 
obtaining shareholder approval.\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 Advisor and any Excluded Subadvisor; and (b) 
the aggregate fees paid to Subadvisors other than Excluded Subadvisors 
(collectively, ``Aggregate Fee Disclosure''). For any Fund that employs 
an Excluded Subadvisor, the Fund will provide separate disclosure of 
any fees paid to the Excluded Subadvisor.
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    \3\ The requested relief will not extend to any sub-adviser who 
is an affiliated person, as defined in section 2(a)(3) of the Act, 
of a Fund or an Advisor other than by reason of serving as a sub-
adviser to one or more Funds (or any Subsidiary) (``Excluded 
Subadvisors'').
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    4. 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.
    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 
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 Subadvisors is substantially similar to that of individual 
portfolio managers, so that requiring shareholder approval of 
Subadvisory 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 
Advisor's

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ability to negotiate fees paid to the Subadvisors that are more 
advantageous for the Funds.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09612 Filed 5-4-20; 8:45 am]
 BILLING CODE 8011-01-P


