Investment Advisers Act of 1940 — Section 203(a)
CenturyLink Investment Management Company
December 8, 2016
RESPONSE OF THE CHIEF COUNSEL'S OFFICE
DIVISION OF INVESTMENT MANAGEMENT
Your letter dated December 6, 2016 requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission (the “Commission”) under section 203(a) of the Investment Advisers Act of 1940 (the “Advisers Act”) against CenturyLink Investment Management Company (“CenturyLink”) if CenturyLink withdraws its registration as an investment adviser under the Advisers Act. CenturyLink is an indirect wholly owned subsidiary of CenturyLink, Inc., a telecommunications firm (the “Parent”) that has been established, and has been operated, for the sole purpose of providing investment advisory services to: (1) the employee benefit plans sponsored by the Parent (the “Plans”), which were established solely for the benefit of current and previous employees of the Parent, its predecessors and affiliates, and comprise retirement and health and welfare employee benefit plans, including both qualified and non-qualified plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”); and (2) the CenturyLink – Clarke M. Williams Foundation (the “Foundation”), a charitable foundation organized as a Colorado non-profit corporation by a predecessor company of the Parent for charitable and educational purposes.
As further discussed in your letter, you believe that CenturyLink complies with the representations of the Lockheed Martin Investment Management Co. letter but for the fact that CenturyLink also advises the Foundation. You assert that, although CenturyLink advises the Foundation, CenturyLink is not engaged in the business of “advising others.” In support of your assertion, you state that, although the Parent does not beneficially own the assets of the Foundation, as the Foundation owns its own assets, the Parent ultimately directs the disposition of those assets as the sole voting member of the Foundation. Further, you state that the Parent, as the sole voting member of the Foundation, has rights with respect to the management of the Foundation, including electing its Board of Directors, which is responsible for transacting the business of the Foundation and for electing the officers of the Foundation. Furthermore, you state that neither CenturyLink nor the Parent has or will receive any investment directive from Foundation beneficiaries or any third party.
Based on the facts and representations set forth in your letter, we would not recommend enforcement action to the Commission against CenturyLink under section 203(a) of the Advisers Act if CenturyLink withdraws its registration as an investment adviser under the Advisers Act. Our position is based particularly on your representations that:
- CenturyLink is an indirect wholly owned subsidiary of the Parent and has been established, and has been operated, for the sole purpose of providing investment advisory services to the Plans and the Foundation;
- CenturyLink does not hold itself out to the public as an investment adviser, provides investment advice only to the Plans and the Foundation, and will not in the future provide investment advisory services to any third party;
- The Plans are established solely for the benefit of current and previous employees of the Parent, its predecessors and affiliates, and comprise employee benefit plans governed by ERISA;
- The Foundation is a charitable foundation organized as a Colorado non-profit corporation by the Parent for charitable and educational purposes and its beneficiaries are charitable and educational organizations. The Parent is the sole voting member of the Foundation, has rights with respect to the management of the Foundation and, since 2012, its sole contributor;
- The only amounts received by the Parent in connection with the Plans are reimbursements that are subject to the restrictions imposed by ERISA;
- The only amounts received in connection with CenturyLink’s advisory services to the Foundation are reimbursements to the Parent from the Foundation for CenturyLink’s expenses associated with such advisory services; and
- Neither the Plans nor the Foundation is required to register as an investment company under the Investment Company Act of 1940.
This response expresses our view on enforcement action only and does not express any legal conclusions on the issues presented. Because our position is based upon all of the facts and representations in your letter, any different facts or representations may require a different conclusion.
Michael S. Didiuk
 Lockheed Martin Investment Management Co., SEC Staff No-Action Letter (June 5, 2006).
 You represent that the Foundation relies on the exclusion from the definition of investment company in section 3(c)(10)(A) of the Investment Company Act of 1940.
 Section 202(a)(11) of the Advisers Act defines “investment adviser” to mean “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.” See, MEAG Munich ERGO, SEC Staff No-Action Letter (Feb. 14, 2014); Allianz of America, Inc., SEC Staff No-Action Letter (May 25, 2012); Zenkyoren Asset Management of America Inc., SEC Staff No-Action Letter (June 30, 2011).
 As further explained in your letter, the Foundation, formerly known as the Qwest Foundation was formed in 1985 and merged with the CenturyTel – Clarke M. Williams Charitable Foundation (the “CenturyTel Foundation”) in 2012, with the Foundation as the surviving entity. The Qwest Foundation and the CenturyTel Foundation had each been established by a predecessor company of the Parent (Mountain Bell Holdings, Inc. and CenturyTel, Inc., respectively) and the Qwest Foundation was previously advised by CenturyLink.
 We note that the antifraud provisions of section 206 of the Advisers Act apply to all investment advisers, whether required to be registered or not.
The Incoming Letter is in Acrobat format.