Notice2022-00242
ETF Opportunities Trust and Applied Finance Advisors, LLC; Notice of Application
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 11, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 7 (Tuesday, January 11, 2022)</title>
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[Federal Register Volume 87, Number 7 (Tuesday, January 11, 2022)]
[Notices]
[Pages 1456-1457]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-00242]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 34463; 812-15217]
ETF Opportunities Trust and Applied Finance Advisors, LLC; Notice
of Application
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: ETF Opportunities Trust (the ``Trust''), a Delaware
statutory trust registered under the Act as an open-end management
investment company that offers the Applied Finance Valuation Large Cap
ETF (the ``Existing Fund''), and Applied Finance Advisors, LLC (the
``Adviser''), a Delaware limited liability company that is registered
as an investment adviser under the Investment Advisers Act of 1940
(collectively with the Trust, the ``Applicants'').
Filing Dates: The application was filed on April 6, 2021, and amended
on July 29, 2021 and November 10, 2021.
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 emailing the Commission's Secretary at
<a href="/cdn-cgi/l/email-protection#491a2c2a3b2c3d283b303a64062f2f202a2c093a2c2a672e263f"><span class="__cf_email__" data-cfemail="3f6c5a5c4d5a4b5e4d464c12705959565c5a7f4c5a5c11585049">[email protected]</span></a> 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 January 31, 2022, 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 <a href="/cdn-cgi/l/email-protection#da89bfb9a8bfaebba8a3a9f795bcbcb3b9bf9aa9bfb9f4bdb5ac"><span class="__cf_email__" data-cfemail="d88bbdbbaabdacb9aaa1abf597bebeb1bbbd98abbdbbf6bfb7ae">[email protected]</span></a>.
ADDRESSES: The Commission: <a href="/cdn-cgi/l/email-protection#b1e2d4d2c3d4c5d0c3c8c29cfed7d7d8d2d4f1c2d4d29fd6dec7"><span class="__cf_email__" data-cfemail="3b685e58495e4f5a49424816745d5d52585e7b485e58155c544d">[email protected]</span></a>. Applicants:
<a href="/cdn-cgi/l/email-protection#3f544c574a4f5a7f5c5c5059495e115c5052"><span class="__cf_email__" data-cfemail="8ce7ffe4f9fce9ccefefe3eafaeda2efe3e1">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Erin Loomis Moore, Senior Counsel, at
(202) 551-6721, or Joseph Toner, Acting Branch Chief, at (202) 551-6825
[[Page 1457]]
(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 <a href="http://www.sec.gov/search/search.htm">http://www.sec.gov/search/search.htm</a> or
by calling (202) 551-8090.
Summary of the Application:
1. The Adviser will serve as the investment adviser to each Sub-
Advised Series pursuant to an investment advisory agreement with the
Trust (the ``Investment Management Agreement'').\1\ Under the terms of
each Investment Management Agreement, the Adviser, subject to the
supervision of the board of trustees of the Trust (the ``Board'') will
provide continuous investment management of the assets of each Sub-
Advised Series. Consistent with the terms of each Investment Management
Agreement, the Adviser may, subject to the approval of the Board,
delegate portfolio management responsibilities of all or a portion of
the assets of a Sub-Advised Series to one or more Sub-Advisers.\2\ The
Adviser will continue to have overall responsibility for the management
and investment of the assets of each Sub-Advised Series. The Adviser
will evaluate, select and recommend Sub-Advisers to manage the assets
of a Sub-Advised Series and will oversee, monitor, and review the Sub-
Advisers and their performance and recommend the removal or replacement
of Sub-Advisers.
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\1\ Applicants request relief with respect to the named
Applicants, including the Existing Fund, 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 Adviser, its successors, or any entity
controlling, controlled by or under common control with, the Adviser
or its successors that serves as the primary adviser to a Sub-
Advised Series (each, 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 ``Sub-
Advised 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.
\2\ A ``Sub-Adviser'' for a Sub-Advised Series is (1) an
indirect or direct ``wholly-owned subsidiary'' (as such term is
defined in the Act) of the Adviser for that Sub-Advised Series, or
(2) a sister company of the Adviser for that Sub-Advised 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 Sub-
Advised Series, the Trust, or the Adviser, except to the extent that
an affiliation arises solely because the Sub-Adviser serves as a
sub-adviser to a Sub-Advised Series or as an investment adviser or
sub-adviser to any series of the Trust other than the Sub-Advised
Series (``Non-Affiliated Sub-Adviser'').
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2. Applicants request an order to permit the Adviser, subject to
Board approval, to enter into investment sub-advisory agreements with
the Sub-Advisers (each, a ``Sub-Advisory Agreement'') and materially
amend such 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 Sub-Advised Series to disclose (as both a
dollar amount and a percentage of the Sub-Advised 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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\3\ 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 Sub-Advised Series
or of the Adviser, other than by reason of serving as a sub-adviser
to one or more of the Sub-Advised Series or as an investment adviser
or sub-adviser to any series of the Trust other than the Sub-Advised
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 Sub-Advised Series shareholders and
notification about sub-advisory changes and enhanced Board oversight to
protect the interests of the Sub-Advised 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 equivalent to that of
individual portfolio managers, so that requiring shareholder approval
of Sub-Advisory Agreements would impose unnecessary delays and expenses
on the Sub-Advised 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 Sub-Advised Series.
For the Commission, by the Division of Investment Management,
under delegated authority.
Dated: January 5, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00242 Filed 1-10-22; 8:45 am]
BILLING CODE 8011-01-P
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