SEC Division of Investment Management staff letter: BlackRock Health Sciences Trust

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
500 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02116-3740
Mr. Douglas J Scheidt, Esq.
Associate Director and Chief Counsel
Division of Investment Management
TEL: (617) 573-4800
FAX; (617) 573-4622 www.skadden.com
United States Securities and Exchange Commission l 00 F Street, N Washington, DC 20549 Dear Mr. Scheidt:
February 24, 2016
F!RM/AFF'!LlATE Or:'FtCES
CHICAGO
HOUSTON
LOS ANGELES
NEW YORK
PALO ALTO
WILMINGTON
BEIJING
BRUSSELS
FRANKFURT
HONG KONG
LONDON
MOSCOW
MUNICH
PARIS
SAO PAULO
SEOUL
SHANGHAI
SINGAPORE
SYDNEY
TOKYO
TORONTO
On behalf of BlackRock Health Sciences Trust (the "Fund"), we seek assurance that the staff the Division oflnvestment Management (the "Staff') will not recommend enforcement action against the Fund to the Securities and Exchange Commission (the "Commission") under
Section 5(b) or Section 6(a) of the Securities Act of 1933, as amended (the "Securities Act"), if it
utilizes Rule 486(b) under the Securities Act to file post-effective amendments to its registration statement in satisfaction of the undertakings contained in its registration statement under the circumstances set forth in this letter.
I. Background
The Fund is a closed-end management investment company that is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"). The Fund is organized as Delaware statutory trust and is governed by a Board of Trustees. The Fund is authorized to issue common shares of beneficial interest The Fund's common shares of beneficial interest are registered under Section l 2(b) of the Securities Exchange Act of 1934, as amended, and are listed and traded on the New York Stock Exchange. BlackRock Advisors, LLC serves as the investment adviser to the Fund. The Fund has a fiscal year end of December 31. The Fund has filed and had declared effective by the Commission an equity shelf registration statement on Form N-2 pursuant to which it has registered, and may issue, common shares of beneficial interest in accordance with the terms of Rule 415(a)(1 )(x) under the Securities Act and the positions the Staff articulated in Pilgr;m America Prime Rate Trusl, SEC Staff No-Action Letter (May 1, l 998) ("Pilgrim") and Nuveen Virginia Premium Income A1unicipal Fund, SEC Staff No-Action Letter (Oct. 6, 2006) ("Nuveen I"). The Commission declared effective the Fund's equity shelf registration statement on Form N-2 (File Nos. 333-204978; 811-21702) on August 11, 2015.

Mr Douglas J Scheidt, Esq.
Febrnary 2016
The Board of Trustees of the Fund (the "Board"), including a majority of the independent trustees, has concluded that the continued ability to raise capital through the public offering of additional securities on a delayed and continuous basis is beneficial to the applicable Fund and its shareholders. The Board has also concluded that a continuously effective equity shelf registration statement is beneficial to the Fund, its shareholders and potential investors. As discussed below, however, the Fund is subject to the risk of being unable to sell securities pursuant to its effective equity shelf registration statement for significant portions of each year due to the post-effective amendment process currently required to bring the Fund's financial statements up to date. The post-effective amendment process requires the Commission to review and declare effective any post-effective amendments filed to an equity shelf registration statement in order to bring the Fund's financial statements up to date. The Board believes that the Fund, its shareholders and potential investors would benefit if the Fund were allowed to utilize Rule 486(b) under the Securities Act, which is available only to a certain category of registered closed-end investment companies, 1 to file post-effective amendments to its equity shelf registration statement that would become effective immediately, primarily for the purposes of updating its financial statements or making non-material changes. Investors would benefit from the Fund's ability to raise capital in continuous offerings of its securities at non-dilutive prices, without potentially significant periods of disruption to such offering process. In addition, Fund shareholders could benefit from considerable cost as expenses incurred in respect of the current post-effective amendment process can be significant. Due to the limited purpose for which the Fund proposes to use Rule 486(b ), no erosion of investor protections would occur. H. Discussion
Section S(b )( 1) of the Securities Act makes it unlawful for any person directly or
indirectly to transmit, through interstate commerce, a prospectus relating to any security with respect to which a registration statement has been filed, unless the prospectus meets the requirements of Section 10 of the Securities Act. Similarly, Section 5(b)(2) of the Securities Act makes it unlawful for any person directly or indirectly to carry or cause to be carried any security for the purpose of sale or delivery, unless preceded or accompanied by a prospectus that meets the requirements of Section 10(a) of the Securities Act.
Section 1 O( a)( 1 ) of the Securities Act, in pertinent part, states that a prospectus relating to
a security - other than a security issued by a foreign issuer - shall contain the information contained in the issuer's registration statement. Section I 0( a)(3) states that, notwithstanding
Section 1 O(a)(l ), a prospectus that is used more than nine months after the effective date of the
registration statement must have information as of a date not more than sixteen months prior to such use, so far as the information is known to the user of the prospectus or can be furnished by the user of the prospectus without umeasonable effort or expense (a "1 O(a)(3) Prospectus"). The Fund is not organized as an interval fund pursuant to Rule 23c-3 under the Investment Company Act. and therefore Rule 486(b) is not currently available to the Fund.

Mr. Douglas J. Scheidt, Esq.
Febmary 24, 2016
Open-end management investment companies ("Open-end Funds"), umt mvestment trusts, and face-amount certificate companies are required by Section 24(e) of the Investment Company Act to use a 10(a)(3) Prospectus that does not vary from the latest prospectus filed as pati of a post-effective amendment to the fund's registration statement. Open-end Funds satisfy this requirement by filing a post-effective amendment pursuant to Rule 485, which provides for automatic or immediate effectiveness. 2 Notably, however, Section 24(e) does not apply to closed-end management investment companies, and there is no statutory requirement mandating that a closed-end fund make such a post-effective filing3 Instead, Rule 415(a)(3) requires a registrant that is an investment company filing on Form N-2 (the registration statement utilized by closed-end funds) to furnish the undertakings required by Item 34.4 of Form N-2. Item 34.4.a of Form requires closed-end funds to undertake "to file, during any period in which offers or sales are being made, a post-effective amendment to the registration statement: ( 1) to include any prospectus required by Section IO(a)(3) of the 1933 Act." The Fund has made this undertaking in its registration statement. As a consequence, the Fund currently is required to file a post-effective amendment on an annual basis to update its equity shelf registration statement with its audited financial statements in accordance with this undertaking, as well as to make any non-material updates. The Fund currently satisfies this undertaking by filing a post-effective amendment with the Commission pursuant to Section 8(c) of the Securities Act. Section 8(c) does not provide a mechanism for automatic effectiveness. 4 A post-effective amendment filed pursuant to Section 8(c) must be declared effective by the Staff in order to take effect. This process subjects the filings to Staff review and comment, including for routine non-material amendments, which can be a lengthy process. Prior to the post-effective amendment being declared effective by the Staff:~ the Fund cannot issue common shares of beneficial interest pursuant to it, thereby potentially preventing the Fund from taking advantage of what may be an attractive market to raise assets for the benefit of Fund shareholders. Closed-end funds that are operated as interval funds pursuant to Rule under the Investment Company Act are not subject to these delays. Rule 486(b) provides that a post￾effective amendment to an effective registration statement, or a registration statement for additional shares of common stock, filed by a registered closed-end management investment company or business development company which makes periodic repurchase offers under Rule under the Investment Company Act ("Interval Funds") shall become immediately effective on the date it is filed, or on a later date designated by the registrant that is no more than 30 days Rule 485(a) permits automatic effectiveness after the passage
of a specified period of time. Rule ..J.85(b} provides For immediate effectiveness of filings made for certain purposes. including, among other things, updating financial statements and making non-material changes. See Section 24(e) of the Investment Company Act: L. Loss & J. Seligman. Securities Regulation, 566 (3rd ed. 1998). But see supra note 2 and accompanying text for a discussion of Rule 485. which provides for autornatic and immediate effectiveness for Open-end Funds.

Mr. Douglas l Scheidt, Esq.
February 24, 2016 after the filing is made, provided that the post-effective amendment or registration statement is filed solely: (i) to additional shares of common stock for which a registration statement filed on Form N-2 is effective, (ii) to bring the financial statements up to date under section 10(a)(3) of the Securities Act or rnle 3-18 of Regulation S-X, (iii) to designate a new effective date for a previously filed post-effective amendment or registration statement for additional shares under Rule 486(a), which has not yet become effective, (iv) to disclose or update the information required by Item 9c of For~ N-2, 5 (v) to make any non-material changes the registrant deems appropriate, and (vi) for any other purpose the Commission shall approve. In the adopting release for Rule 486, the Commission stated that "[t]he initial proposal of rule 486 recognized that closed-end interval funds may need continuously effective registration statements and would benefit if certain filings could become effective automatically.''6 The Fund believes that this line of reasoning should be extended to it as a closed-end fund that is conducting offerings pursuant to Rule 415(a)(l)(x). Recently, your office has concurred with this approach. 7 In the Prior No-Action Letters, the Staff granted no-action assurances to many closed-end fond complexes that were engaged in a delayed or continuous offering pursuant to Rule 415(a)(l)(x). In the letters, the Staff agreed not to recommend enforcement action to the Commission under Sections 5 and 6(a) of the Securities Act based on the representation that the respective fund's board of directors approved the fond's We note that Form N-2 does not have, and has never had, an "Hem 9c." Based upon a review of the administrative history of Rule 486, we believe that this should be a reference to Item 9.l.c. of Form N-2, which relates to information regarding individual po1tfolio managers. Accordingly the Fund plans to treat the reference to .. Item 9c'' as a reference to Hem 9.l.c. of Form N-2. Ame11dmenls to Investment Company Registration Statements, SEC Rel. No. 33-7083 (Aug. 17, 1994). See Nuveen Municipal lligh Incmne Opportunity Fund, et al, SEC Staff No-Action Letter (Nov. 9, 20!0) CNuveen II"), Calamos Convertible Opportunities and Income Fund, et al., SEC Staff No-Action Letter (Feb.
14. 2011) ("Calamos''), ,Jberdeen Australia Equitv Fund, Inc., et al., SEC Staff No-Action Letter (Apr. 12,
2012) ("Aberdeen I''). :Vuveen Select Quali(v ,\funicipal Fund. Inc., et al., SEC Staff No-Action Letter (Jun. 26,
201'.i) ("Nuveen HI"), NexPoint Credit Strategies Fimd, SEC Staff No-Action Letter (Jun. 26. 2013) ("NexPoinf'). John Hancock Investors Trust. et al., SEC Staff No-Action Letter (Jun. 26, 2013) ("John Hancock"), First Trust High Income Fund 11. et al., SEC Staff No-Action Letter (Jun. 26, 2013) ("First Trust"), l~aton !'ance floating-Rate Income 1J·ust. et a/., SEC Staff No-Action Letter (Jun. 26. 2013) ("Eaton Vance''), Aberdeen Income Fund, SEC Staff No-Action Letter (Jtm. 26, 2013) ("Aberdeen 11''), Credit Suisse lligh Yield Bond Fund et al., SEC Staff No-Action Letter (Jun. 26. 2013) ("CSAM"), The Jfe:xico Fund Inc .. SEC Staff No-Action Letter (Dec. 3 L 2013) ("Mexico Fund"), Gabel!i Comwtihle & Income 5·,'ecurities Fund. Inc., et al., SEC Staff No-Action Letter (Apr. 18, 2014) CGabelli"), Guggenheim Opportunities Fund, SEC Staff No-Action Letter (Oct. 2, 2014) ("Guggenhein1'), Xuveen Credit S1rategies Income Fund el al., SEC Staff No-Action Letter (November 7, 2014) ("Nuveen JV"), BlackRock Limited Duration Income Trust, et al .. SEC Staff No-Action Letter (Oct. 19. 2015) ("BlackRock"), Fiducim;wC!avmore A/LP Opportunitv Fund. SEC Staff No-Action Letter (Jan. 7, 2016) ("Fiduciary/Claymore" and together with Nuveen II, Calamos, Aberdeen L Nuvccn III, NexPoint John Hancock First Trust, Eaton Vance, Aberdeen II, CSAM, Mexico Fund, Gabelli, Guggenheim, Nnveen JV and BlackRock. the "Prior No￾Action Letters").

Mr. Douglas J. Scheidt, Esq.
Febmary 24, 2016 delayed or continuous offerings, the representation that each fund's post-effective amendments would comply with the conditions of Rule 486(b ), and the representation that each fund would file a post-effective amendment containing a prospectus pursuant to Section 8( c) of the Securities Act prior to any offering of its common stock at a price below net asset value. Your office has stated that, "[i]n light of the very fact specific nature" of the requests, this relief is limited on its face to the addressees of the no-action letters. Your office has also stated, however, that it willing to consider similar requests from other registered closed-end management investment companies." We submit that the facts presented by the Fund this request are similar to those presented in the Prior No-Action Letters. As was the case with each of the funds in the Prior No￾Action Letters, the Board, including a majority of its independent trustees, has concluded that the continued ability to raise capital through the public offering of additional common shares of beneficial interest on a delayed and continuous basis would benefit the Fund and its shareholders. In addition, the Board has concluded that a continuously effective equity shelf registration statement would be beneficial to the Fund, its shareholders and potential investors. In furtherance of these conclusions, the Fund has an effective registration statement on file with the Commission pursuant to which the Fund may issue common shares of beneficial interest on a delayed and continuous basis in accordance with Rule 4 l 5(a)(l)(x) under the Securities Act and the positions of the Commission staff in the Nuveen I and Pilgrim letters. As is the case with Interval Funds, the Fund and its common shareholders would also benefit from having a continuously effective registration statement. The ability to utilize Rule 486(b) under the Securities Act would have significant benefits for the Fund and its investors:

• The Fund would have the ability to raise capital as the opportunity arises;
• The Fund could reduce the expenses it presently incurs as part of the registration
  statement review and comment process, thus benefiting shareholders; and
• Investors could have faster access to important information about the Fund
  including its updated financial information.
  In addition, because the ability to rely on Rule 486(b) would only permit the Fund to update its financial statements, or to make non-material changes to its registration statement, the Fund believes that the public policy of protecting investors would be safeguarded. The Fund represents that each filing made in reliance on the requested relief would be made in compliance with the conditions of Rule 486(b ), and that the Fund will file a post-effective amendment containing a prospectus pursuant to Section 8( c) of the Securities Act prior to any offering of its common shares of beneficial interest at a price below net asset value. In relying on the requested relief to sell common shares of beneficial interest, the Fund will sell newly issued shares at a

Mr. Douglas J. Scheidt, Esq.
Febrnary 24, 2016 price no lower than the sum of the Fund's net asset value plus the per share commission or underwriting discount 8 The Fund would utilize Rule 486(b) to file post-effective amendments only to: (1) bring the financial statements of the Fund up to date under Section 1 O(a)(3) of the Securities Act or rule 3-18 of Regulation S-X; (2) update the information required by Hem 9.1.c of Form N-2; or (3) make any non-material changes the registrant deems appropriate9 HI. Conclusion In light of the forgoing, we seek your assurances that the Staff will deem the Fund to have complied with its undertaking provided in response to Item 34.4.a of Form N-2, and will not recommend enforcement action against the Fund to the Commission under Section 5(b) or
Section 6(a) of the Securities Act if the Fund utilizes Rule 486(b) of the Securities Act, under the
circumstances set forth above.

---

The Fund acknowledges that the Staff may withdraw any assurance granted in response to this letter if the Staff finds that the Fund is misusing Rule 486(b ), or for any other reason. Please contact the undersigned at (617) 573-4814 or Kenneth Burdon at (617) 573-4836 with any questions or comments regarding this letter. 9 Sincerely, Thomas DeCapo See Pilgrim. The Fund would not seek to use a filing made in accordance with Rule 486(h) to register additional securities without first obtaining relief from Rule 413 under the Securitlcs Act.