40-APP 1 d58385d40app.htm IVY INVESTMENT MANAGEMENT COMPANY Ivy Investment Management Company

As filed with the U.S. Securities and Exchange Commission on July 21, 2015

UNITED STATES OF AMERICA

BEFORE THE

U.S. SECURITIES AND EXCHANGE COMMISSION

File No. 812-[            ]

 

 

Application for an order under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the Act for exemptions from sections 17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) of the Act for exemptions from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act

 

 

In the Matter of

Ivy NextShares

Ivy Investment Management Company

Ivy Funds Distributor, Inc.

6300 Lamar Avenue

Overland Park, Kansas 66202

 

 

Please send all communications regarding this Application to:

Alan P. Goldberg

K&L Gates LLP

70 W. Madison Street

Suite 3100

Chicago, IL 60602

With a copy to:

Philip A. Shipp

6300 Lamar Avenue

Overland Park, Kansas 66202


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

In the Matter of

 

Ivy NextShares

Ivy Investment Management Company

Ivy Funds Distributor, Inc.

 

File No. 812-[            ]

   Application for an order under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the Act for exemptions from section 17(a) of the Act, and under section 12(d)(1)(J) of the Act for exemptions from sections 12(d)(1)(A) and (B) of the Act

 

I. SUMMARY OF APPLICATION

In this application, Ivy NextShares (“Trust”), Ivy Investment Management Company (“Manager”), and Ivy Funds Distributor, Inc. (“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), 22(d) and 22(e) of the Act and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the Act for exemptions from section 17(a) of the Act, and under section 12(d)(1)(J) of the Act for exemptions from sections 12(d)(1)(A) and (B) of the Act (“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 exchange-traded managed funds (“Reference Order”), which terms and conditions are hereby incorporated by reference into this Order.1

Applicants request that the relief apply to the exchange-traded managed funds listed in Exhibit A (the “Initial Funds”) and to any other existing or future registered open-end management investment companies or series thereof that (a) are advised by the Manager or any entity controlling, controlled by, or under common control with the Manager (any such entity included in the term “Manager”), (b) operate as an exchange-traded managed fund as described in the Reference Order and (c) comply 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 each Initial Fund is a “Fund”).2

 

1 Eaton Vance Management, et al., Investment Company Act Rel. Nos. 31333 (November 6, 2014) (notice) and 31361 (December 2, 2014) (order).

2 All 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.

 

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

 

II. APPLICANTS

 

  A. The Trust

The Trust is a business trust organized under the laws of Delaware and will consist of multiple series operating as exchange-traded managed funds. The Trust will be registered with the Commission as an open-end management investment company under the Act. Each Fund’s portfolio positions will consist of securities and other assets selected and managed by its Manager or Subadviser (as defined below) to pursue the Fund’s investment objective. In all cases, a Fund’s investments will be made in accordance with its investment policies and the requirements of the Act and rules thereunder.

 

  B. The Manager

The Manager will be the investment manager to the Initial Funds. The Manager is incorporated under the laws of the state of Delaware and is a wholly-owned subsidiary of Waddell & Reed Financial, Inc., a publicly held company located at 6300 Lamar Avenue, P.O. Box 29217, Shawnee Mission, Kansas 66201-9217. The Manager is, and any other Manager will be, registered as an “investment adviser” under section 203 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Manager has entered into, or anticipates entering into, a licensing agreement with Eaton Vance Management, or an affiliate thereof, in order to offer exchange-traded managed funds.3

Subject to the oversight and authority of each Fund’s board of trustees, the Manager will develop and manage the overall investment program of each Fund and will arrange and oversee the provision of necessary services for each Fund (including custodial, transfer agency and administration services). The Manager and the Trust may enter into investment advisory agreements with other investment advisers to act as subadvisers with respect to Funds (“Subadvisers”). Any Subadviser will be registered under the Advisers Act unless not subject to such registration.

 

  C. The Distributor

The Distributor is a Florida corporation and a broker-dealer registered under the Securities Exchange Act of 1934, as amended, 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 Manager. Any distributor will comply with the terms and conditions of this application. The Distributor will distribute Shares on an agency basis.

 

3 Aspects of the Funds’ proposed method of operation are described in one or more of U.S. Patent Nos. 7,444,300, 7,496,531, 7,689,501, 8,131,621, 8,306,901, 8,332,307, 8,452,682, 8,577,877 and 8,655,765 and in pending patent applications.

 

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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

●            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.

 

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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.

Ivy NextShares

By:   /s/ Henry J. Herrmann                

Name:  Henry J. Herrmann

Title:    Trustee

Ivy Investment Management Company

By:   /s/ Henry J. Herrmann                

Name:  Henry J. Herrmann

Title:    President and Chief Executive Officer

Ivy Funds Distributor, Inc.

By:   /s/ Thomas W. Butch                

Name:  Thomas W. Butch

Title:    President

 

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AUTHORIZATION RULE 0-2(c)(1)

Authorization of

Ivy NextShares

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

 

IVY NEXTSHARES
By:  

  /s/ Henry J. Herrmann

  Henry J. Herrmann
  Trustee

Authorization of

Ivy Investment Management Company

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

 

IVY INVESTMENT MANAGEMENT COMPANY
By:  

  /s/ Henry J. Herrmann

  Henry J. Herrmann
  President and Chief Executive Officer

Authorization of

Ivy Funds Distributor, Inc.

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

 

IVY FUNDS DISTRIBUTOR, INC.
By:  

  /s/ Thomas W. Butch

  Thomas W. Butch
  President

 

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VERIFICATION RULE 0-2(d)

Verification of

Ivy NextShares

In accordance with Rule 0-2(d) under the Act, the undersigned, being duly sworn, deposes and says that he has duly executed the attached application for an order for, and on behalf of, Ivy NextShares; that he is a Trustee of such entity; and that all actions taken by the trustees or other persons necessary to authorize deponent to execute and file such instrument this 21st day of July, 2015, have been taken. Deponent further says that he 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.

 

IVY NEXTSHARES
By:

  /s/ Henry J. Herrmann

Henry J. Herrmann
Trustee

Verification of

Ivy Investment Management Company

In accordance with Rule 0-2(d) under the Act, the undersigned, being duly sworn, deposes and says that he has duly executed the attached application for an order for, and on behalf of, Ivy Investment Management Company; that he is President and Chief Executive Officer of such company; and that all actions taken by the trustees or other persons necessary to authorize deponent to execute and file such instrument this 21st day of July, 2015, have been taken. Deponent further says that he 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.

 

IVY INVESTMENT MANAGEMENT COMPANY
By:

  /s/ Henry J. Herrmann

Henry J. Herrmann
President and Chief Executive Officer

Verification of

Ivy Funds Distributor, Inc.

In accordance with Rule 0-2(d) under the Act, the undersigned, being duly sworn, deposes and says that he has duly executed the attached application for an order for, and on behalf of, Ivy Funds Distributor, Inc.; that he is the President of such company; and that all actions taken by the trustees or other persons necessary to authorize deponent to execute and file such instrument this 21st day of July, 2015, have been taken. Deponent further says that he 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.

 

IVY FUNDS DISTRIBUTOR, INC.
By:

  /s/ Thomas W. Butch

Thomas W. Butch
President

 

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EXHIBIT A

The Initial Funds

 

    Ivy Asset Strategy NextShares normally invests its assets primarily among stocks, bonds and short-term instruments of issuers in markets around the globe, as well as in derivative instruments, precious metals and investments with exposure to various foreign currencies.

 

    Ivy International Core Equity NextShares normally invests its assets in equity securities of companies located in, or principally traded largely in, developed European and Asian/Pacific Basin markets.

 

    Ivy Science and Technology NextShares normally invests its assets in equity securities of science and technology companies around the globe.

 

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