40-APP/A 1 tm1921534-1_40app.htm 40-APP/A

 

UNITED STATES OF AMERICA

BEFORE THE

U.S. SECURITIES AND EXCHANGE COMMISSION

 

File No. 812-15036

 

 

 

Second Amended Application for an Order under Section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from Sections 2(a)(32), 5(a)(1) and 22(d) of the Act and Rule 22c-1 under the Act, under Sections 6(c) and 17(b) of the Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the Act, and under Section 12(d)(1)(J) of the Act for an exemption from Sections 12(d)(1)(A) and 12(d)(1)(B) of the Act.

 

 

 

 

In the Matter of

Gabelli ETFs Trust

Gabelli Funds, LLC

G.distributors, LLC

One Corporate Center

Rye, NY 10580-1422

 

 

 

Please send all communications regarding this Application to:

 

Agnes Mullady Michael R. Rosella
Gabelli Funds, LLC Paul Hastings LLP
One Corporate Center 200 Park Avenue
Rye, NY 10580-7724 New York, NY 10166
(914) 921-8371 (212) 318-6800

 

 

Page 1 of 10 sequentially numbered pages (including exhibits)


As filed with the U.S. Securities and Exchange Commission on October 31, 2019

 

 

 1 

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

     

In the Matter of

 

Gabelli ETFs Trust

Gabelli Funds, LLC

G.distributors, LLC

 

 

File No. 812-15036

 

  Application for an Order under Section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from Sections 2(a)(32), 5(a)(1) and 22(d) of the Act and Rule 22c-1 under the Act, under Sections 6(c) and 17(b) of the Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the Act, and under Section 12(d)(1)(J) of the Act for an exemption from Sections 12(d)(1)(A) and 12(d)(1)(B) of the Act.

 

I. SUMMARY OF APPLICATION

 

In this second amended application, Gabelli ETFs Trust, (“Trust”), Gabelli Funds, LLC (“Adviser”), and G.distributors, LLC (“Distributor”) (collectively, the “Applicants”) apply for and request an order under section 6(c) of the Investment Company Act of 1940, as amended (the “Act”), for an exemption from Sections 2(a)(32), 5(a)(1) and 22(d) of the Act and Rule 22c-1 under the Act, under Sections 6(c) and 17(b) of the Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the Act, and under Section 12(d)(1)(J) of the Act for an exemption from Sections 12(d)(1)(A) and 12(d)(1)(B) of the Act (the “Order”). Except as noted herein, the Order would be subject to the same terms and conditions contained in a previous order, as may be amended from time to time, issued by the U.S. Securities and Exchange Commission (“Commission”) to permit the operations of ActiveShares℠ ETFs (“Reference Order”), which terms and conditions are hereby incorporated by reference into this Order.[1]

 

Applicants request that the relief apply to the ActiveShares℠ ETFs listed in Appendix A (the “Initial Funds”) and to any other existing or future registered open-end management investment company or series thereof that (a) is advised by the Adviser or any entity controlling, controlled by, or under common control with the Adviser (any such entity included in the term “Adviser”), (b) operates as an ActiveShares℠ ETF as described in the Reference Order and (c) complies with the terms and conditions of the Order and of the Reference Order which is incorporated by reference herein (each such company or series and any Initial Fund, a “Fund”).[2]

 

 No form having been specifically prescribed for this application, Applicants proceed under rule 0-2 under the Act.

 

_______________________________

 

1Precidian ETFs Trust, et al., Investment Company Act Rel. Nos. 33440 (April 8, 2019) (notice) and 33477 (May 20, 2019) (order).

 

2All entities that currently intend to rely on the Order are named as applicants. Any other entity that relies on the Order in the future will comply with the terms and conditions of the Order and of the Reference Order which is incorporated by reference herein.

 2 

 

 

II. APPLICANTS

 

A. The Trust

 

The Trust is a Delaware statutory trust organized under the laws of the State of Delaware and will consist of one or more series operating as ActiveShares℠ ETFs. The Trust will be registered with the Commission as an open-end management investment company under the Act.

 

B. The Adviser

 

The Adviser will be the investment adviser to the Initial Funds. The Adviser is a New York limited liability company with its principal place of business in New York. The Adviser is, and any other Adviser will be, registered as an “investment adviser” under section 203 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Adviser has entered into a licensing agreement with Precidian Funds LLC, in order to offer ActiveShares ETFs.[3]

 

Subject to approval by the Fund’s board of trustees, the Adviser will serve as investment adviser to the Funds. The Adviser may enter into sub-advisory agreements with other investment advisers to act as sub-advisers with respect to Funds (“Sub-Advisers”). Any Sub-Adviser to a Fund will be registered with the Commission as an investment adviser under Section 203 of the Advisers Act.

 

C. The Distributor

 

The Distributor is a Delaware limited liability company and a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will act as the principal underwriter of shares of the Funds (“Shares”). Applicants request that the relief requested in this application apply to any distributor of Shares, whether affiliated or unaffiliated with the Adviser and/or Sub-Adviser. Any distributor will comply with the terms and conditions of this application and be registered under the Exchange Act as a broker-dealer. The distributor will distribute Shares on an agency basis.

 

III. REQUEST FOR RELIEF

 

Applicants agree that the Order will be subject to the same terms and conditions as the Reference Order. For the reasons stated in the Reference Order, Applicants believe that:

 

    With respect to the relief requested pursuant to section 6(c), the relief is 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;

 

    With respect to the relief requested pursuant to section 17(b), the proposed transactions are reasonable and fair and do not involve overreaching on the part of any person concerned, are consistent with the policies of each registered investment company concerned and with the general purposes of the Act; and

_______________________________

 

3Aspects of the Funds are covered by intellectual property rights, including but not limited to that which are described in one or more patent applications.

 

 3 

 

 

 

    With respect to the relief requested pursuant to section 12(d)(1)(J), the relief is consistent with the public interest and the protection of investors.

 

IV. NAMES AND ADDRESSES

 

Pursuant to rule 0-2(f) under the Act, Applicants state that their addresses are as indicated on the first page of this application. Applicants further state that all written or oral communications concerning this application should be directed to the persons listed on the first page.

 

V. PROCEDURAL MATTERS, CONCLUSION AND SIGNATURES

 

Applicants file this application in accordance with rule 0-2 under the Act. Applicants have attached the required verifications to the application. In accordance with rule 0-2(c) under the Act, Applicants state that all actions necessary to authorize the execution and filing of this application have been taken, and the persons signing and filing this document are authorized to do so on behalf of the Applicants. In accordance with rule 0-5 under the Act, Applicants request that the Commission issue the Order without holding a hearing.

 

Based on the facts, analysis and conditions in the application, Applicants respectfully request that the Commission issue the Order under sections 6(c), 17(b) and 12(d)(1)(J) of the Act granting the relief requested by this application.

 

       
  Gabelli ETFs Trust
     
  By:   /s/ Agnes Mullady
      Name: Agnes Mullady
      Title: Trustee
       
       
  Gabelli Funds, LLC
       
  By:   /s/ Agnes Mullady
      Name: Agnes Mullady
      Title: Vice President

  

       
  G.distributors, LLC
     
  By:   /s/ Agnes Mullady
      Name: Agnes Mullady
      Title: Chief Executive Officer

 Dated: October 30, 2019

 4 

 

  

Resolutions of Gabelli ETFs Trust

(as adopted May 21, 2019)

 

RESOLVED:

 

That the Trust be, and it hereby is, authorized to prepare and file with the SEC an application for an exemptive order (“Order”), and any and all amendments thereto, pursuant to section 6(c) of the Investment Company Act of 1940, granting an exemption from sections 2(a)(32), 5(a)(1), and 22(d) of the Act and rule 22c-1 under the Act, pursuant to sections 6(c) and 17(b) of the Act from section 17(a) of the Act and pursuant to section 12(d)(1)(J) of the Act from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act.

 

RESOLVED:

 

That any and all actions previously taken in connection with the preparation and filing with the SEC of an application for the Order, and any and all amendments thereto, pursuant to section 6(c) of the Investment Company Act of 1940, granting an exemption from sections 2(a)(32), 5(a)(1), and 22(d) of the Act and rule 22c-1 under the Act, pursuant to sections 6(c) and 17(b) of the Act from section 17(a) of the Act and pursuant to section 12(d)(1)(J) of the Act from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act be, and they hereby are, ratified.

 

RESOLVED:

 

That each initial Trustee and officer of the Trust be, and hereby is, authorized to take any and all actions as are reasonable or necessary to obtain the Order.

 

RESOLVED:

 

That each initial Trustee and officer of the Trust be, and hereby is, authorized and directed to do and perform any and all further acts and things which are necessary or appropriate to carry out the foregoing resolutions.

 

 5 

 


Authorization Rule 0-2(c)(1)

 

Authorization of Gabelli Funds, LLC

 

In accordance with Rule 0-2(c), the undersigned states that all actions necessary to authorize the execution and filing of this application by Gabelli Funds, LLC have been taken, and that as the Vice President thereof, she is authorized to execute and file the same on behalf of Gabelli Funds, LLC and all actions necessary to execute and file such instrument have been taken. The undersigned further states that she is familiar with such instrument and its contents, and that the facts therein set forth are true to the best of her knowledge, information and belief.

 

   

Gabelli Funds, LLC

 

By: /s/ Agnes Mullady

Name: Agnes Mullady

Title: Vice President

   
   
   
   

 

 

 

 

 

Authorization of G.distributors, LLC

 

In accordance with Rule 0-2(c), the undersigned states that all actions necessary to authorize the execution and filing of this application by G.distributors, LLC have been taken, and that as the Chief Executive Officer thereof, she is authorized to execute and file the same on behalf of G.distributors, LLC and all actions necessary to execute and file such instrument have been taken. The undersigned further states that she is familiar with such instrument and its contents, and that the facts therein set forth are true to the best of her knowledge, information and belief.

 

 

 

G.distributors, LLC

 

By: /s/ Agnes Mullady

Name: Agnes Mullady

Title: Chief Executive Officer

   
   
   
   

 6 

 

 


Verification Rule 0-2(d)

Verification of Application

In accordance with Rule 0-2(d) under the Act, the undersigned, being duly sworn, deposes and says that she has duly executed the attached application for an order for, and on behalf of, Gabelli ETFs Trust; that she is the sole Trustee of such entity; and that all actions taken by the officers or other persons necessary to authorize deponent to execute and file such instrument this 30th day of October, 2019, have been taken. Deponent further says that she is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of her knowledge, information and belief.

 

   
By:   /s/ Agnes Mullady
    Name: Agnes Mullady
    Title: Trustee

 

Verification of Application

 

In accordance with Rule 0-2(d) under the Act, the undersigned, being duly sworn, deposes and says that she has duly executed the attached application for an order for, and on behalf of, Gabelli Funds, LLC; that she is the Vice President of such company; and that all actions taken by the officers or other persons necessary to authorize deponent to execute and file such instrument this 30th day of October, 2019, have been taken. Deponent further says that she is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of her knowledge, information and belief.

 

By:  

 

/s/ Agnes Mullady

    Name: Agnes Mullady
   

Title: Vice President

 

 7 

 

 


Verification Rule 0-2(d)

Verification of Application

In accordance with Rule 0-2(d) under the Act, the undersigned, being duly sworn, deposes and says that she has duly executed the attached application for an order for, and on behalf of, G.distributors, LLC; that she is the Chief Executive Officer of such entity; and that all actions taken by the officers or other persons necessary to authorize deponent to execute and file such instrument this 30th day of October, 2019, have been taken. Deponent further says that she is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

   
By:   /s/Agnes Mullady
    Name: Agnes Mullady
    Title: Chief Executive Officer

 

 8 

 

 

 

APPENDIX A

 

Initial Funds

        

GAMCO Growth ETF

 

The Fund’s primary investment objective is to seek to provide capital appreciation, and current income is a secondary objective. The Fund will primarily invest in common stocks. The Fund focuses on securities of companies which appear to have favorable, yet undervalued, prospects for earnings growth and price appreciation. The Fund’s investment adviser, Gabelli Funds, LLC, invests the Fund’s assets in companies which the portfolio manager believes have above average or expanding market shares, profit margins, and returns on equity. The investment adviser will sell any Fund investments that lose their perceived value when compared with other investment alternatives in the judgment of the portfolio manager.

 

Gabelli Financial Services ETF

 

Under normal market conditions, the Fund invests at least 80% of the value of its net assets, in the equity securities of companies principally engaged in the group of industries comprising the financial services sector. The Fund typically invests in common stocks of such companies (including indirect holdings of common stock through American depositary receipts), but may also invest in other equity securities, such as preferred stocks, in accordance with the foregoing 80% policy. 

 

Gabelli Small Cap Growth ETF

 

The Fund seeks to provide a high level of capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of companies that are considered to be small companies at the time the Fund makes its investment. The Fund invests primarily in common stocks of companies which Gabelli Funds, LLC, the Fund’s investment adviser, believes are likely to have rapid growth in revenues and above average rates of earnings growth. The investment adviser currently characterizes small capitalization companies for the Fund as those with total common stock market values of $3 billion or less at the time of investment.

 

Gabelli Small & Mid Cap ETF

 

The Fund’s investment objective is long term capital growth. Under normal market conditions, the Fund invests at least 80% of its total assets in equity securities of companies with small or medium-sized market capitalizations (“small-cap” and “mid-cap” companies, respectively).

  

Gabelli Micro Cap ETF

 

The Fund seeks to provide long term capital appreciation by investing primarily in micro-capitalization equity securities that have a market capitalization (defined as shares outstanding times’ current market price) of $500 million or less at the time of Fund’s initial investment.

 

 9 

 

 

Gabelli ESG ETF

 

The Fund’s investment objective is capital appreciation. The Fund seeks to achieve its objective by investing substantially all, and in any case no less than 80%, of its assets in common and preferred stocks of companies that meet the Fund’s guidelines for social responsibility at the time of investment. Under normal market conditions, the Fund invests its assets in stocks that are listed on a national securities exchange, as defined in Section 2(a)(26) of the Investment Company Act of 1940, as amended.

 

Gabelli Asset ETF

 

The Fund primarily seeks to provide growth of capital. The Fund will primarily invest in common stocks and preferred stocks. The Fund focuses on companies which appear underpriced relative to their private market value (“PMV”). PMV is the value the Fund’s investment adviser, Gabelli Funds, LLC, believes informed investors would be willing to pay for a company.

 

Gabelli Artemis ETF

 

The Gabelli Artemis ETF seeks to provide growth of capital. The Fund will invest primarily in common stocks and preferred stocks. The Fund will focus on companies which exemplify the inclusion of women in leadership roles, including, but not limited to, women on a board of directors and in key management positions.

 

Gabelli Equity Income ETF

 

The Gabelli Equity Income ETF seeks to provide a high level of total return on assets with an emphasis on income. The Fund will seek to achieve its investment objective through a combination of capital appreciation and current income by investing, under normal market conditions, at least 80% of its net assets in income producing equity securities. Income producing equity securities include, for example, common stocks, and preferred stocks. In making stock selections, Gabelli Funds, LLC, the Fund’s investment adviser, looks for securities that have a better yield than the average of the Standard and Poor’s 500 Index (the “S&P 500 Index”), as well as capital gains potential.

 

Gabelli Green Energy ETF

 

The Fund’s investment objective is to seek to provide a competitive total return including current return and capital appreciation by investing in equity securities dedicated to addressing climate change. Equity securities include securities of those companies engaged in energy generation, distribution, and transmission as well as equipment suppliers and fuel suppliers of clean energy.

  

 

 

 10