SEC Division of Investment Management staff letter: Eaton Vance Tax-Managed Buy-Write Opportunities Fund, et al.

EFFECTIVE AUGUST 1, 2021, THIS LETTER IS WITHDRAWN. Please consult the following web page for more information: https://www.sec.gov/divisions/investment/im-modified-withdrawn-staff-statements .

Securities Act of 1933 — Rule 486(b) Eaton Vance Tax-Managed Buy-Write Opportunities Fund, et al.

RESPONSE OF THE OFFICE OF CHIEF COUNSEL DIVISION OF INVESTMENT MANAGEMENT

File Nos. 811-21735, 811-21676, 811-21745, 811-21519

Your letter dated October 29, 2018, requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission (“Commission”) under Section 5(b) or Section 6(a) of the Securities Act of 1933, as amended (the “Securities Act”) against Eaton Vance Tax-Managed Buy-Write Opportunities Fund (“ETV”), Eaton Vance Tax-Managed Buy-Write Income Fund (“ETB”), Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (“ETW”) and Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (“ETO”) (each, a “Fund,” and collectively, the “Funds”)), each of which filed and had declared effective by the Commission a shelf registration statement on Form N-2 (“Registration Statement”), if a Fund files a post-effective amendment to its Registration Statement pursuant to Rule 486(b) under the Securities Act, under the circumstances set forth in your letter.

Background

You state that each Fund is a closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Each Fund filed and had declared effective by the Commission its Registration Statement pursuant to which it may issue common shares of beneficial interest on a delayed and continuous basis in accordance with Rule 415(a)(1)(x) under the Securities Act and the positions of the Commission staff. [1] Eaton Vance Management serves as the investment adviser to each Fund. Each Fund’s common shares of beneficial interest are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, and are listed and traded on the New York Stock Exchange. The fiscal year end for each of ETV, ETB and ETW is December 31. The fiscal year end for ETO is October 31.

You state that each Fund’s board of trustees (each, a “Board”), [2] including a majority of independent trustees, have concluded that the continued ability to raise capital through the public offering of additional securities on a delayed or continuous basis, and a continuously effective equity shelf registration statement, would be beneficial to the applicable Fund, its shareholders and potential investors. You state that each Fund, therefore, needs a continuously effective Registration Statement, and annually would have to file post-effective amendments to its Registration Statement pursuant to Section 8(c) of the Securities Act (“Post-Effective Amendments”) to bring the Fund’s financial statements up to date or to make other non-material changes. You further state that the applicable Fund, its shareholders and potential investors would benefit if Post-Effective Amendments filed for the purpose of bringing the Fund’s financial statements up to date or to make any other non-material changes were effective immediately, as permitted by Rule 486(b) under the Securities Act available to certain registered closed-end investment companies. You state that utilization of Rule 486(b) would help ensure that each Fund has the ability to raise capital as the opportunity arises, and could reduce expenses incurred by each Fund in the Post-Effective Amendment process. You further state that due to the limited purpose for which each Fund would use Rule 486(b), no erosion of investor protection would occur and investors could have faster access to important information about the Fund, including its updated financial information.

Discussion

Rule 486(b) under the Securities Act, in relevant part, states that a post-effective amendment to a registration statement filed by a registered closed-end management investment company which makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act (“Interval Fund”) shall become effective on the date on which it is filed with the Commission, provided that certain conditions are met. The conditions of Rule 486(b) require, among other things, that the post-effective amendment be filed for no purpose other than, among other things, bringing the financial statements up to date or making non-material changes, and that the registrant make certain representations concerning the purpose for which the amendment is filed.

In adopting Rule 486(b) in 1994, the Commission recognized that Interval Funds may have a need to raise capital continuously, and therefore need continuously effective registration statements and would benefit if certain filings could become effective automatically. [3] The Commission staff in 1998 recognized that registered closed-end management investment companies such as the Funds, which are not Interval Funds, also may benefit from the flexibility to take advantage of favorable market conditions to raise additional capital through continuous or delayed offerings of their securities. [4] You assert that the applicable Fund, its shareholders and potential investors also would benefit if the Fund’s Post-Effective Amendments that comply with the conditions of Rule 486(b) could become effective immediately pursuant to that Rule.

You represent that each filing made in reliance on the requested relief would be made in compliance with the conditions of Rule 486(b), and that each 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 per share. You also represent that in relying on the requested relief to sell common shares of beneficial interests, each Fund will sell newly issued shares of common stock at a price no lower than the sum of the Fund’s net asset value per share plus any per share commission or underwriting discount. [5]

Conclusion

Based on the facts and representations set forth in your letter, we would not recommend that the Commission take any enforcement action under Section 5(b) or Section 6(a) of the Securities Act against any Fund if it files Post-Effective Amendments to its Registration Statement pursuant to Rule 486(b) under the Securities Act. This response expresses our view on enforcement action only and does not express any legal or interpretive conclusion 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. [6] We note that each Fund has acknowledged that the staff may withdraw any assurance granted in this letter if the staff finds that the Fund is misusing Rule 486(b) or for any other reason.

Jessica Shin Attorney-Adviser

[1]

See Nuveen Virginia Premium Income Municipal Fund , SEC Staff No-Action Letter (Oct. 6, 2006) (“Nuveen Letter”); Pilgrim America Prime Rate Trust , SEC Staff No-Action Letter (May 1, 1998) (“Pilgrim Letter”).

[2] Each Fund is organized as a Massachusetts business trust that is governed by a board of trustees.

[3]

See Post-Effective Amendments to Investment Company Registration Statements, Investment Company

Act Release No. 20486 (Aug. 17, 1994), n.22 and accompanying text. An Interval Fund operates pursuant to a fundamental policy that requires the Interval Fund to make periodic offers to repurchase its common stock in an amount not less than five percent of the outstanding shares. See Rule 23c-3 under the Investment Company Act. These repurchase offers may create a need for the Interval Fund to replenish its assets by making a continuous or intermittent offering of its common stock. See Continuous or Delayed Offerings by Certain Closed-End Management Investment Companies; Automatic Effectiveness of Certain Registration Statements and Post-Effective Amendments, Investment Company Act Release No. 19391 (Apr. 7, 1993).

[4]

See Pilgrim Letter, supra note 1, n.12 and accompanying text.

[5]

See Pilgrim Letter, Nuveen Letter supra note 1.

[6] The Division of Investment Management generally permits third parties to rely on no-action or interpretive letters to the extent that the third party’s facts and circumstances are substantially similar to those described in the underlying request for a no-action or interpretive letter. See Informal Guidance Program for Small Entities, Investment Company Act Release No. 22587 (Mar. 27, 1997), n.20. In light of the very fact-specific nature of the Funds’ request, however, the position expressed in this letter applies only to each Fund, and no other entity may rely on this position. The staff is willing to consider similar requests from other registered closed-end management investment companies.

Incoming Letter

The Incoming Letter is in Acrobat format.

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Deputy Director and Chief Counsel
Division of Investment Management
U.S. Securities and Exchange Commission
100 F. Street, N.E.
Washington, DC 20549-8549
Re: Request for No-Action Relief:
Eaton Vance Tax-Managed Buy-Write Opportunities Fund Eaton Vance Tax-Managed Buy-Write Income Fund Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund Dear Mr. Cellupica:
On behalf of Eaton Vance Tax-Managed Buy-Write Opportunities Fund (“ETV”), Eaton Vance Tax￾Managed Buy-Write Income Fund (“ETB”), Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (“ETW”) and Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (“ETO”) (together the “Funds” and each, individually, a “Fund”), we seek assurance that the staff of the Division of Investment Management (the "Staff") will not recommend enforcement action against a 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
Each Fund is a closed-end management investment company that is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"). Each Fund is organized as a Massachusetts business trust, governed by a board of trustees (each, a “Board”) and authorized to issue common shares of beneficial interest. The Commission has declared effective an equity shelf registration on Form N-2 for each Fund. ETV’s equity shelf registration statement (File Nos. 333-224640 and 811-
21735) was declared effective by the Commission on May 31, 2018, ETB’s equity shelf registration
statement (File Nos. 333-214544 and 811-21676) was declared effective by the Commission on April 5, 2017, ETW’s equity shelf registration statement (File Nos. 333-220692 and 811-21745) was declared effective by the Commission on April 12, 2018 and ETO’s equity shelf registration statement (File Nos. 333-220691and 811-21519) was declared effective by the Commission on May 31, 2018. Each Fund's common shares of beneficial interest are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, and are listed and traded on the New York Stock Exchange. Eaton Vance

Management serves as the investment adviser to each Fund. The fiscal year end for each of ETV, ETB and ETW is December 31. The fiscal year end for ETO is October 31. Each 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 of the Staff articulated in Pilgrim America Prime Rate Trust, SEC Staff No-Action Letter (May 1, 1998) ("Pilgrim") and Nuveen Virginia Premium Income Municipal Fund, SEC Staff No-Action Letter (Oct. 6, 2006) ("Nuveen"). The Board of each Fund, including a majority of the independent trustees ("Independent Board Members"), 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 of each Fund has also concluded that a continuously effective equity shelf registration statement is beneficial to the applicable Fund, its shareholders and potential investors. As discussed below, however, each Fund is subject to the periodic risk of being unable to sell securities pursuant to their effective equity shelf registration statement for significant portions of each year due to the post-effective amendment process currently required to bring each 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 each Fund's financial statements up to date. The Board of each Fund believes that the applicable Fund, its shareholders and potential investors would benefit if the Fund was 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 each Fund's ability to raise capital in delayed or continuous offerings of its securities at non-dilutive prices, without potentially significant periods of disruption to such offering process. In addition, each Fund’s shareholders could benefit from considerable cost savings, as expenses incurred in respect of the current post-effective amendment process can be significant. Due to the limited purpose for which the Funds propose to use Rule 486(b), no erosion of investor protections would occur if the requested relief were extended to each Fund.
II. Discussion
Section 5(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. 1 The Funds are not organized as interval funds pursuant to Rule 23c-3 under the Investment Company Act, and therefore Rule 486(b) is not currently available to the Funds.

Section 10(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 10(a)(3) states that, notwithstanding Section 10(a)(1), 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 unreasonable effort or expense (a "10(a)(3) Prospectus"). Open-end management investment companies ("Open-end funds"), unit investment 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 part 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 under the Securities Act, which provides for automatic or immediate effectiveness.2Notably, 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 filing.3 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 N-2 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 10(a)(3) of the 1933 Act." Each Fund has made this undertaking in its registration statement. As a consequence, each Fund currently has or will be 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. Each Fund currently has or will satisfy 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, each 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. 2 Rule 485(a) permits automatic effectiveness after the passage of a
specified period of time. Rule 485(b) provides for immediate effectiveness of filings made for certain purposes, including, among other things, updating financial statements and making non-material changes. 3 See Section 24(e) of the Investment Company Act; L. Loss, J. Seligman & T. Paredes, 1 Securities Regulation, 998-1000 (5th ed. 2014). 4 But see supra note 2 and accompanying text for a discussion of Rule 485, which provides for automatic and immediate effectiveness for Open-end funds.

Closed-end funds which are operated as interval funds pursuant to Rule 23c-3 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 that makes periodic repurchase offers under Rule 23c-3 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 after the filing is made, provided that the post-effective amendment or registration statement is filed solely: (i) to register 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 Rule 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 Form N-25 ; (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 Funds believe that this line of reasoning should be extended to them as a closed-end fund that is conducting offerings pursuant to Rule 415(a)(1)(x). The Staff has concurred with this approach.7 In the Prior No-Action Letters, the Staff granted no-action assurances to many closed-end fund complexes that were engaged in delayed or continuous offerings pursuant to Rule 415(a)(1)(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 fund's 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. 5 We note that Form N-2 does not have, and has never had an "Item 9c." Based upon a review of the administrative history of Rule 486, we believe that this should be a reference to Item 9.1.c. of Form N-2, which relates to information regarding individual portfolio managers. Accordingly, the Funds plan to treat the reference to "Item 9c" as
a reference to Item 9.1.c. of Form N-2. 6 Post-Effective Amendments to Investment Company Registration Statements, SEC Rel. No. 33-7083 (Aug. 17, 1994). 7 The staff has granted over 20 no-action assurances to closed-end fund complexes concurring with this approach since 2010. See, e.g., Nuveen California Select Tax-Free Income Portfolio, SEC Staff No-Action Letter (Nov. 21, 2017), PIMCO Dynamic Income Fund, SEC Staff No-Action Letter (Dec. 12, 2017), PIMCO Corporate & Income Opportunity Fund and PIMCO Income Opportunity Fund, SEC Staff No-Action Letter (Sep. 13, 2018), and DNP Select Income Fund, Inc., SEC Staff No-Action Letter (Oct. 4, 2018). These and previous similar no-action assurances are collectively referred to as the "Prior No-Action Letters."

The Staff has stated in the Prior No-Action Letters 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. The Staff has also stated, however, that it "is willing to consider similar requests from other registered closed-end management investment companies." We submit that the facts presented by the Funds in 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 of each Fund, including a majority of its Independent Board Members, 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 of each Fund has concluded that a continuously effective equity shelf registration statement would be beneficial to the applicable Fund, its shareholders and potential investors. In furtherance of these conclusions, the Funds have effective registration statements on file with the Commission pursuant to which the Funds may issue common shares of beneficial interest on a delayed and continuous basis in accordance with Rule 415(a)(l)(x) under the Securities Act and the positions of the Commission staff in the Nuveen and Pilgrim letters. As is the case with Interval Funds, each 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 each Fund and its investors:

• Each Fund would have the ability to raise capital as the opportunity arises;
• Each 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 each Fund including its
  updated financial information.
  In addition, because the ability to rely on Rule 486(b) would only permit each Fund to update its financial statements, or to make non-material changes to its registration statement, each Fund believes that the public policy of protecting investors would be safeguarded.8 Each 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 each Fund will file post-effective amendments 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 per share. In relying on the requested relief to sell common shares of beneficial interest, each Fund will sell newly issued shares at a price no lower than the sum of the Fund's net asset value per share plus any per share commission or underwriting discount.9 8 Additionally, pursuant to Rule 415(a)(5) under the Securities Act, shelf registration statements, including the Funds’ registration statements, have a maximum lifespan of three years, meaning limits on the Funds’ ability to file automatically effective post-effective amendments would remain in place. 9 See Pilgrim.