SEC Division of Investment Management staff letter: First Trust, et al.

June 26, 2013
IM Ref. No. 20134121538
First Trust Strategic High Income
Fund II, First Trust Senior Floating
Rate Income Fund II, and First Trust
RESPONSE OF THE OFFICE OF CHIEF COUNSEL Mortgage Income Fund DIVISION OF INVESTMENT MANAGEMENT File No. 811-21842 Your letter dated June 20,2013 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 (the "Securities Act") against First Trust Strategic High Income Fund II ("FHY"), First Trust Senior Floating Rate Income Fund II ("FCT") or First Trust Mortgage Income Fund ("FMY") (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 (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 on a delayed basis in accordance with Rule 415(a)(1)(x) under the Securities Act and the positions ofthe Commission staff. 1 First Trust Advisors L.P. serves as the investment adviser to each Fund. Brookfield Investment Management Inc. serves as the subadviser to FHY and FMY. Each Fund's common shares are registered under Section 12(b) of the Securities Exchange Act of 1934 and are listed and traded on the New York Stock Exchange. FHY and FMY have a fiscal year ending on October 31. FCT has a fiscal year ending on May 31. You state that each Fund's board oftrustees (the "Board"), including a majority of independent trustees, has concluded that a continuously effective shelf registration statement would be beneficial to each 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) ofthe 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 each 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 the Funds have the ability to raise capital as the opportunity arises, and could reduce expenses incurred by the Funds in the Post-Effective Amendment process. You See Nuveen Virginia Premium Income Municipal Fund, SEC Staff No-Action Letter (Oct.
6, 2006); Pilgrim America Prime Rate Trust, SEC StaffNo-Action Letter (May I, 1998) ("Pilgrim Letter").