SEC Division of Investment Management staff letter: Royal Bank of Canada

Katten
525 W. Monroe Street
Chicago, IL 60661-3693
312.902.5200 tel
www.kattenlaw.com
Arthur W. Hahn arthur.hahn@kattenlaw.com
312.902.5241 direct
312.577.8892 fax
Associate Director and ChiefCounsel
Division ofInvestment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-0506
Re: CFTC v. Royal Bank ofCanada, 2012-cv-2497 (S.D.N.Y. Apr. 2, 2012) Dear Mr. Scheldt:
We submit this letter on behalf of our client, Royal Bank of Canada (“RBC”), the defendant in the above-captioned civil proceeding, which was filed on April 2, 2012.1 RBC seeks the assurance of the staff of the Division of Investment Management (the “Staff”) that it would not recommend any enforcement action to the U.S. Securities and Exchange Commission (the “Commission”) under Section 206(4) of the Investment Advisers Act of 1940 (the “Advisers Act”) and Rule 206(4)-3 thereunder (the “Rule”), if any investment adviser that is required to be registered pursuant to Section 203 ofthe Advisers Act pays RBC, or any of its associated persons as defined in Section 202(a)(17) of the Advisers Act, a cash solicitation fee, directly or indirectly, for the solicitation of advisory clients in accordance with the Rule, notwithstanding the existence of a consent order (the “Consent Order”)2 (as described below) that otherwise would preclude such an investment adviser from paying such a fee, directly or indirectly, to RBC or certain related persons. While the Consent Order does not operate to prohibit or suspend RBC or any of its associated persons from being associated with or (except as provided in Section 9(a) of the Investment Company Act of 1940, from which Section relief has been separately requested as described in footnote 3) acting as an investment adviser and does not relate to solicitation activities on behalf of any investment adviser, it may affect the ability ofRBC and its associated persons to receive such payments.3 The Staff in many other instances has granted no-action 1 An amended complaint (“Amended Complaint”) was filed on October 17, 2012. 2 CFTC v. Royal Bank ofCanada, Case No. 2012-cv-2497 (S.D.N.Y. Apr. 2, 2012). 3 Under Section 9(a) of the Investment Company Act of 1940 (“Investment Company Act”), RBC, the settling defendant and its affiliated persons will, as a result of the Consent Order, be prohibited from serving or acting as, AUSTIN CENTURY CITY CHARLOTTE CHICAGO HOUSTON IRVING LOS ANGELES NEW YORK ORANGE COUNTY SAN FRANCISCO BAY AREA SHANGHAI WASHINGTON, DC LONDON: KATTEN MUCHIN ROSENMAN UK LLP A limited liability partnership including professional corporations