Securities Exchange Act of 1934 — Rule 14a-8
Opportunity Partners L.P. Shareholder Proposal (Clough Global Equity Fund)
April 16, 2015
Clifford J. Alexander, Esq.
Nicholas I. Froio, Esq.
K& L Gates LLP
1601 K Street, N.W.
Washington, DC 20006-1600
Re: Clough Global Equity Fund - Omission of Shareholder Proposal Submitted by Opportunity Partners L.P.
Dear Messrs. Alexander and Froio:
In a letter dated March 19, 2015, on behalf of Clough Global Equity Fund (the "Fund"), you requested confirmation from the staff of the Division of Investment Management that it would not recommend enforcement action to the Securities and Exchange Commission (the "Commission") if a shareholder proposal and supporting statement (the "Proposal") submitted by Opportunity Partners L.P. (the "Proponent") is omitted from the proxy materials for the Fund's 2015 Annual Meeting of Shareholders (the "Proxy Materials"). The Proposal provides:
RESOLVED: The shareholders of Clough Global Equity Fund (the Fund) request that the Board of Trustees authorize a self-tender offer for all outstanding common shares of the Fund at or close to net asset value (NAV). If more than 50% of the Fund's outstanding common shares are submitted for tender, the tender offer should be cancelled and the Fund should be liquidated or converted into an exchange-traded fund (ETF) or an open-end mutual fund.
The Fund argues that the Proposal may be excluded: (1) pursuant to Rule 14a-8(i)(6), because in the event more than 50% of the Fund's Common Shares are submitted for tender, implementation of the Proposal would result in an action in contravention of the Fund's governing instrument; (2) pursuant to Rule 14a-8(i)(2), because the implementation of the Proposal would violate the Investment Company Act of 1940; and (3) pursuant to Rule
14a-8(i)(3), because the Proposal is inherently vague and indefinite. In the opinion of the Fund's counsel, the Board of Trustees lacks the authority to unilaterally liquidate or convert the Fund.
There appears to be some basis for your view that the Proposal may be excluded under Rules 14a-8(i)(2) and 14a-8(i)(6). It appears that the defect in the Proposal could be cured, however, if the Proposal were revised to state that the Board should take the steps necessary to liquidate or convert the Fund. Accordingly, unless the Proponent provides the Fund with a Proposal revised in this manner within seven calendar days after receiving this letter, we will not recommend enforcement action to the Commission if the Fund omits the Proposal from its Proxy Materials in reliance on Rules 14a-8(i)(2) and 14a-8(i)(6).
We are unable to concur in your view that the Fund may exclude the Proposal under Rule 14a-8(i)(3). We are unable to conclude that the Proposal is so inherently vague or indefinite that neither the shareholders voting on the Proposal, nor the Fund in implementing the Proposal, would be able to determine with any reasonable certainty what actions or measures the Proposal requires. Accordingly, we cannot assure the Fund that we would not recommend that the Commission take any enforcement action if the Fund omits the Proposal from its Proxy Materials in reliance on Rule 14a-8(i)(3).
Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning the matter, please call me at (202) 551-6910.
/s/ Stephanie D. Hui
Stephanie D. Hui
Division of Investment Management
cc: Phillip Goldstein
Bulldog Investors, LLC
DIVISION OF INVESTMENT MANAGEMENT
INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS
The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.l4a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent or the proponent's representative.
The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary procedure.
The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule l4a-8 does not and cannot purport to "adjudicate" the merits of an investment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly a discretionary determination not to recommend or take Commission enforcement action does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court should management omit the proposal from the investment company's proxy material.