FR 2024-31497

The document issued by the Securities and Exchange Commission (SEC) is a notice regarding applications for the deregistration of certain investment companies. The notice is directed specifically towards companies that wish to cease being recognized as investment companies under Section 8(f) of the Investment Company Act of 1940. The primary focus is on four main applicants: BNY Mellon Municipal Bond Funds, John Hancock Tax-Advantaged Global Shareholder Yield Fund, List Income Opportunities Fund, and PREDEX. Each of these entities is in the process of transferring their assets to other funds and have completed the necessary distributions to their shareholders.

General Summary

In December 2024, several companies filed applications to deregister as investment companies. These applications are processed as per the Investment Company Act of 1940, aiming for an order of cessation. Each applicant plans or has completed asset transfers to another fund, ensuring their shareholders receive distributions based on the net asset value. Furthermore, the transformation incurs several expenses specific to each case, ranging from over $100,000 to approximately $700,000.

Significant Issues and Concerns

One of the critical issues highlighted is the lack of detailed explanation or justification for the significant expenses incurred upon reorganization by these funds. For instance, BNY Mellon Municipal Bond Funds reported expenses of $176,946, raising questions about the necessity and fairness of such amounts. Similarly, John Hancock's expenses totaled $707,832, pointedly shared between the applicant, the acquiring fund, and its advisor, yet without explicit clarity on the equitable nature of this arrangement.

There is also a concern that the document contains technical jargon and procedural specifics that may not be easily digestible by a layperson. Terms like 'deregistration' and procedures involving filing and amendments may benefit from a more straightforward explanation. Moreover, the detailed instructions for requesting a hearing, while comprehensive, might be overwhelming for those unfamiliar with SEC processes.

Impact on the Public

Broadly, the document addresses regulatory actions that could affect investors and stakeholders involved in these specific funds. The public might perceive these reorganizations either as another step towards potential transparency and effective fund management or as a move that potentially involves high costs without clear justification.

For specific stakeholders, particularly shareholders of these investment companies, there could be both positive and negative impacts. The positive aspect is that shareholders receive distributions from the funds as part of these transitions, potentially offering a clear conclusion to their investment. However, the complexity and opacity around incurred expenses might be challenging for stakeholders to fully understand, bringing about uncertainty or dissatisfaction with the financial implications.

Impact on Specific Stakeholders

For the companies involved, deregistration could be advantageous in terms of reducing regulatory burdens and aligning their strategic interests. However, the process involves significant expenses that must be justified to maintain trust and acceptance among stakeholders.

Meanwhile, the involved acquiring funds and their advisories must manage the expectations and communications surrounding these expenses, sharing an equitable burden where necessary. Therefore, there is a chance for enhanced collaboration and communication between companies, advisors, and stakeholders if these concerns are properly addressed and clarified.

Overall, while the document serves a specific, regulatory function, its intricacies and financial implications warrant a careful examination and clearer communication to ensure understanding and informed participation from all interested or affected parties.

The document provides notice of applications for deregistration under Section 8(f) of the Investment Company Act of 1940, with a focus on financial transactions related to the reorganization of several investment companies. It highlights specific expenses involved in these processes, which are important to understand in the context of fund management and reorganization endeavors.

Expenses Incurred and Financial Allocations

The document mentions several key financial figures related to the costs incurred during the reorganization of different investment companies. For instance, the BNY Mellon Municipal Bond Funds, Inc. incurred expenses amounting to $176,946. These expenses were directly paid by the applicant as part of its reorganization process, which included transferring its assets to another fund and distributing the final proceeds to its shareholders.

Similarly, the John Hancock Tax-Advantaged Global Shareholder Yield Fund reported expenses totaling $707,832. The costs for this fund's reorganization were shared among the applicant, the acquiring fund, and the acquiring fund's investment adviser. This collaborative financial approach signifies that the financial burden of reorganization was not solely on the original fund but involved multiple stakeholders contributing to the overall expense.

Additionally, the PREDEX fund's reorganization expenses were recorded at $105,679, with these costs being covered by the investment adviser's resources. The sharing of costs, in this case, reflects an operational decision by the investment adviser to bear the financial responsibilities associated with the transfer of assets and final shareholder distributions.

Relation to Identified Issues

The document raises a few issues concerning the transparency and justification of these expenses. There is an absence of detailed explanations or justifications for the necessity of the specific amounts spent during reorganization processes. For example, while it states that the John Hancock fund's expenses were shared between the applicant and other parties, it does not provide details on whether this cost-sharing arrangement was equitable or based on a formalized agreement.

Moreover, the document contains technical jargon that might not be readily accessible to those unfamiliar with investment and legal terminologies, which could obscure the understanding of financial practices enacted during the deregistration process. For a general audience, more accessible language or detailed breakdowns of these financial transactions could improve comprehension. Similarly, the instructions for requesting a hearing might benefit from simplification to ensure broader accessibility, especially for stakeholders not well-versed in SEC protocols.

Overall, while the financial references in the document are clear in reporting the amounts and parties involved, further elaboration on the rationalization and fairness of these expenses could enhance transparency and aid in addressing the raised issues.