SEC Division of Investment Management staff letter: The BNY Mellon Family of Funds, et al.

July 9, 2019

Investment Company Act of 1940 – Section 15(a) Certain Disclosure Requirements

July 9, 2019

The BNY Mellon Family of Funds
BNY Mellon Funds Trust and
BNY Mellon Investment Adviser, Inc.

Chief Counsel’s Office
Division of Investment Management

Your letter dated July 9, 2019 requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission (“Commission”) under section 15(a) of the Investment Company Act of 1940 (“Act”) and certain disclosure requirements[1] if: (i) subadvisers to certain registered open-end investment companies (“funds”), including subadvisers that are affiliated persons, as defined in section 2(a)(3) of the Act, of the funds or the funds’ primary investment adviser (“Affiliated Subadvisers”), serve under subadvisory agreements that have not been approved by the funds’ shareholders (“Subadviser Voting Relief”); and (ii) the funds disclose the advisory fees paid to the subadvisers on an aggregate, rather than individual, basis (“Aggregate Fee Disclosure Relief,” and together with Subadviser Voting Relief, “Multi-Manager Relief”). You state that the purpose of your request is to extend the funds’ existing exemptive relief under section 15(a) and the disclosure requirements to Affiliated Subadvisers.[2]

The Commission recently issued an order under section 6(c) of the Act granting Multi-Manager Relief with respect to Affiliated Subadvisers.[3] The Carillon Order, in essence, extended the Multi-Manager Relief that the Commission has been granting since 1995 to any Affiliated Subadviser, subject to the terms and conditions set forth in the application for the Carillon Order (such conditions, “2019 Multi-Manager Relief Conditions”). We agree that the position you are requesting from us is appropriate to provide additional flexibility to funds and investment advisers operating under a Prior Multi-Manager Order without having to seek amendments to their orders.

Accordingly, we would not recommend enforcement action to the Commission under section 15(a) of the Act and the disclosure requirements[4] against a person covered by a Prior Multi-Manager Order if a fund relies on its Prior Multi-Manager Order with respect to any subadviser, provided the fund complies with the 2019 Multi-Manager Relief Conditions in their entirety.[5] The statements in this letter represent the views of the Division of Investment Management. This letter is not a rule, regulation or statement of the Commission, and the Commission has neither approved nor disapproved its content.

Jessica Shin
Attorney-Adviser

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[1] These disclosure requirements include Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8), and 22(c)(9) of Schedule 14A under the Securities Exchange Act of 1934, and sections 6-07(2)(a), (b), and (c) of Regulation S-X.

[2] See The Dreyfus Corporation, et al., Investment Company Act Release Nos. 30580 (June 26, 2013) (notice) and 30608 (July 23, 2013) (order) (“Dreyfus Order”).

[3] See Carillon Tower Advisers, Inc., et al., Investment Company Act Release Nos. 33464 (May 2, 2019) (notice) and 33494 (May 29, 2019) (order) (“Carillon Order”). Prior to the Carillon Order, Commission orders granting Multi-Manager Relief (including the Dreyfus Order) extended only to subadvisers that were not Affiliated Subadvisers or were wholly-owned subsidiaries of the fund’s primary adviser (“Prior Multi-Manager Orders”).

[4] The Prior Multi-Manager Orders also included relief from rule 18f-2 under the Act. Because the Commission had determined that relief from rule 18f-2 was unnecessary due to the fact that the Subadviser Voting Relief granted an exemption from section 15(a) of the Act, the Carillon Order did not include relief from rule 18f-2. See Exemption from Shareholder Approval for Certain Subadvisory Contracts, Investment Company Act Release No. 26230, at n. 11 (Oct. 23, 2003).

[5] We would not expect a fund or investment adviser that relies on this position to comply with the conditions of their Prior Multi-Manager Order. A fund that wishes to rely on its Prior Multi-Manager Order with respect to an Affiliated Subadviser not covered by the Prior Multi-Manager Order, must comply with the 2019 Multi-Manager Conditions, including obtaining shareholder approval to operate as a fund using Multi-Manager Relief for Affiliated Subadvisers, with respect to any existing or future subadviser going forward. A fund that wishes to rely on its Prior Multi-Manager Order solely with respect to the type(s) of subadvisers covered by the Prior Multi-Manager Order, may choose to comply with the 2019 Multi-Manager Conditions, in their entirety, instead of the conditions in its Prior Multi-Manager Order, provided the fund does so with respect to all existing and future subadvisers going forward. If a fund’s Prior Multi-Manager Order provides only Subadviser Voting Relief, our no-enforcement position extends only to that relief.

Last Reviewed or Updated: July 9, 2019

Resources

• Incoming Letter

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rOSkBLIBr,/' P ke R LLP ale e Time Eq ee Ne Yak, NYiliaaeeeee July 9, 2019 David Stephens Member of the Firm d +1.212. 969. 3357 f 212.969.2900 DStephens@proskauer. corn Nadya B.Roytblat, Esq. www. proskauer. corn Assistant Chief Counsel Division of Investment Management U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Re: Request for No-Action Relief —Section 15(a) of the 1940 Act:
The BNY Mellon Family of Funds
BNY Mellon Funds Trust and
BNY Mellon Investment Adviser, Inc.
Dear Ms. Roytblat:
On behalf of the funds in the BNY Mellon Family of Funds and BNY Mellon Funds Trust, and each series, if any, thereof (each, a "Fund" and collectively, the "Funds" ), and BNY Mellon Investment Adviser, Inc., each Fund's investment adviser (the "Adviser" ), we seek assurance that the staff of the Division of Investment Management (the "StafF') will not recommend enforcement action to the Securities and Exchange Commission (the "Commission" ) if, in reliance on their existing exemptive order (discussed below), (i) the Funds or the Adviser enters into or materially amend subadvisory agreements with subadvisers without shareholder approval and (ii) the Funds disclose the fees paid to the subadvisers on an aggregate, rather than an individual, basis, subject to the Funds and the Adviser complying with the terms and conditions to the Commission's exemptive order recently granted in Carillon Series Trust, et al. ' (nCarillonn). The Commission has granted an order exempting the Funds and the Adviser from Section 15(a) of the Investment Company Act of 1940, as amended (the n1940 Acta), permitting the Funds and the Adviser, subject to the terms and conditions set forth in the application for such order, to enter into and materially amend subadvisory agreements with one or more subadvisers who are either unaffiliated with the Adviser or are wholly-owned subsidiaries (as defined in the 1940 Act) of the Adviser's ultimate parent company, ' The Bank of New York Mellon Corporation, without obtaining shareholder approval. The Dreyfus order also exempts the Funds and the Adviser from certain disclosure obligations to disclose the advisory fees paid to these subadvisers on an aggregate basis. Subject to the Staffs assurances that it would not recommend enforcement action, the relief previously granted to the Funds and the Adviser would extend not only to subadvisory agreements with wholly-owned and non-affiliated subadvisers, but also to subadvisory agreements with "Affiliated Subadvisersn (as defined in the Carillon order), as long as the Funds and the Adviser comply with the terms and conditions of the Carillon order. ' We request this Carillon Series Trust, et al. , Investment Company Act Rel. Nos. 33464 (May 2, 2019) (notice) and 33494 (May 29,
2019) (order) (the "Carillon order").
The Dufus Corporation, et al. , Investment Company Act Rel. Nos. 30580 (June 26, 2013) (notice) and 30608 (July 23, 2013) (order) (the "Dreyfus order"). As is the case under the Dreyfus order, the request herein would apply to the Adviser and any entity controlling, controlled by or under common control with, the Adviser or its "successors" (i.e., an entity that results from a reorganization into another jurisdiction or a change in the type of business organization). Beijing Boca Raton i Boston i Chicago Hong Kong i London i Los Angeles i New Orleans New York i Newark i Paris i Sao Paulo Washington, Dc i

assurance to provide the flexibility to the Funds and the Adviser to operate under the Dreyfus order with respect to Affiliated Subadvisers without having to seek an amendment to their order. Thank you in advance for your consideration of this request. Should you or any member of the Staff have any questions concerning the foregoing request, please contact me at 212.969.3357 or dstephens@proskauer. corn. We greatly appreciate the assistance from your office in this matter. Very truly yours, avid Stephens cc: Kaitlin Bottock Jeff Prusnofsky Jessica Shin Robert Spiro