Re:
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The Dreyfus Third Century Fund, Inc. (File No. 811-02192)
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Definitive Proxy Statement on Schedule 14A
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1. |
Staff Comment: Please confirm supplementally that any incomplete or missing information or exhibits in the preliminary proxy materials will be completed in or filed with the definitive proxy materials.
Response: Any incomplete or missing information or exhibits has been completed in or filed with the definitive proxy materials.
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2. |
Staff Comment: Please consider comments made by the Staff with respect to one section of the proxy materials as applicable to similar disclosure elsewhere in the proxy materials.
Response: We have considered comments made by the Staff with respect to one section of the proxy materials as applicable to similar disclosure elsewhere in the proxy materials.
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3. |
Staff Comment: The reason for each of the proposals, including for the considerable changes to the fund's investment strategies and fundamental policies, is often not stated and/or clear. Please state a reason for each proposal earlier and more prominently in the proxy statement (e.g., performance problems, more flexibility, a broader investment universe that might lead to better returns). Stating that the proposed change is in the "best interests of shareholders" is not sufficient.
Response: The requested revisions have been made.
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4. |
Staff Comment: Each proposal should be discussed individually for clarity. For example, the proposed changes to the Fund's fundamental restrictions currently are all in one section. Consider using sub-headings or other clarifying methods to better designate discussion about each proposal.
Response: Please note that each proposal is discussed individually. For Proposal 4, the changes to fundamental investment restrictions, each proposed investment restriction change is a seperatly lettered and titled subsection of Proposal 4.
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5. |
Staff Comment: Please include a clearer side-by-side comparison of the current and proposed fundamental policies. Consider using a tabular format or a chart.
Response: A chart of the current and proposed fundamental policies has been added.
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6. |
Staff Comment: Please revise the proxy materials to make it clear whether the Fund's board considered any factors that were adverse to the proposals (e.g., a potentially heighted risk profile as a result of the new strategy or adverse tax consequences). If the board did not consider any factors that were adverse to the proposals, please explain why. In particular, please note that the proxy statement states that management currently estimates a relatively large amount of realized capital gains.
Response: The requested revisions have been made.
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7. |
Staff Comment: In order to better highlight the changes to the Fund's investment strategy, consider revising the applicable disclosure to include a chart or a table presenting the current investment strategy and the proposed investment strategy. Additionally, the proxy materials do not discuss any changes to the Fund's investment risks. Please consider adding disclosure regarding changes to the Fund's investment risks in the same format.
Response: A chart presenting the current and proposed investment strategies has been added. In addition, we have added descriptions of additional risk factors associated with the proposed investment strategy.
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8. |
Staff Comment: Similarly, please clarify the disclosure regarding any changes between the current and proposed advisory fees, including sub-advisory fees. Please make more prominent the disclosure that advisory fee will not increase. Additionally, please clarify in the disclosure whether it is expected that the Fund's other expenses will remain the same, taking into account considerations like increased portfolio turnover.
Response: The requested revisions have been made. Please note that, in connection with and subject to shareholder approval of certain proposals, the management fee is proposed to decrease from 0.75% to 0.60% of the Fund's average daily net assets and, although other expenses are not expected to increase as a result of the proposed investment strategy change, The Dreyfus Corporation ("Dreyfus") will contractually agree, effective as of the effective date of the investment strategy change and until October 1, 2018, to waive receipt of its fees and/or assume the direct expenses of the Fund so that the expenses of none of the share classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed 0.70%.
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9. |
Staff Comment: The preliminary proxy materials state that a form of the proposed Sub-Advisory Agreement (the "Sub-Advisory Agreement") with Newton Investment Management (North America) Limited ("Newton") is attached as Exhibit A to the proxy materials, but the exhibit is not filed. Additionally, the description of the material terms of the Sub-Advisory Agreement is currently qualified by reference to the form of the Sub-Advisory Agreement contained in Exhibit A. Please note that all material terms of the Sub-Advisory Agreement must be summarized adequately in the proxy materials. Please delete the statement containing the qualification.
Response: The Sub-Advisory Agreement has been included as Exhibit A to the definitive proxy statement. We believe that all material terms of the Sub-Advisory Agreement are adequately summarized. The qualifying sentence has been deleted and the following sentence has been added: "Please refer to the form of the Newton Sub-Advisory Agreement contained in Exhibit A to this Proxy Statement for further information."
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10. |
Staff Comment: For clarity, consider including a table of contents and a Q&A section.
Response: We believe the shareholder letter adequately summarizes the proposals such that a Q&A section is not necessary, and that the proxy statement is short enough that a table of contents is not necessary.
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11. |
Staff Comment: Pursuant to Rule 35d-1 under the Investment Company Act of 1940, as amended, an investment company is required to invest at least 80% of its assets in the type of investment suggested by its name ("80% policy"). Please note that the Staff considers "sustainable" to be a type of investment that falls within Rule 35d-1. However, the Fund's proposed 80% policy only relates to equity securities of U.S. companies. The requirements of Rule 35d-1 can be satisfied if the Fund invests at least 80% of its assets in investments that are environmentally-friendly or environmental, social and governance ("ESG") compatible. Please revise the Fund's 80% policy as appropriate.
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12. |
Staff Comment: The first sentence of the third paragraph of the proxy statement states that "if no voting instructions are given, shares will be voted "FOR" the Proposals except as to broker non-votes as described below." Please include a cross reference to where broker non-votes are described.
Response: The requested revision has been made.
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13. |
Staff Comment: Under the proposed investment strategy, the Fund normally would invest in companies that, in the opinion of Newton, demonstrate attractive investment attributes and sustainable business practices and have no material unresolvable ESG issues. Please clarify what the Fund means by "sustainable business practices."
Response: The following disclosure has been added to the proxy statement:
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14. |
Staff Comment: Please more clearly explain the differences between the social screening criteria the Fund currently uses and the Fund's proposed investment strategy, which "integrates sustainable and ESG considerations in the investment process."
Response: Currently, the portfolio managers evaluate each stock considered to be a potential purchase candidate, by industry or sector, to determine whether the company enhances the quality of life in America by considering its record in the areas of (i) protection and improvement of the environment and the proper use of our natural resources, (ii) occupational health and safety, (iii) consumer protection and product purity and (iv) equal employment opportunity (collectively, the "Four Social Screens"). The proposed investment strategy eliminates the Four Social Screens and the consideration of whether the company "enhances the quality of life in America," and replaces it with a policy of investing in companies that, among other things, demonstrate sustainable business practices, as described above. The chart added in response to the Staff's comment further clarifies these changes. See the response to Staff Comment No. 7.
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15. |
Staff Comment: Please clarify whether the Fund is seeking shareholder approval of both the existing manager of managers order and the order the Fund has applied for. If so, please separate the two proposals.
Response: The Fund is seeking shareholder approval for both the existing manager of managers order and the order the Fund has applied for. We have separated the two proposals in the definitive proxy statement and accompanying proxy card.
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16. |
Staff Comment: The proxy statement states that if Proposal 3 is not approved, shareholder approval would continue to be required for Dreyfus to enter into or materially amend a sub-investment advisory agreement with respect to the Fund. Please add similar disclosure about what would happen if the other proposals were not approved. Additionally, the proxy statement states that board approval of certain proposals is subject to shareholder approval of other proposals. Please ensure such disclosure is complete and consider describing all such dependencies in one section.
Response: The requested revisions have been made.
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17. |
Staff Comment: The Proxy Statement states that "the proposed change to the Fund's fundamental investment restriction regarding industry concentration would clarify that . . . securities issued or guaranteed by governments other than the U.S. Government or by foreign supranational entities are not considered to be the securities of issuers in a single industry for purposes of this fundamental investment restriction." Please clarify that all the sovereign debt of a single country would be considered investments in a single industry.1
Response: The requested revision has been made.
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18. |
Staff Comment: Please more prominently disclose, in the beginning of the proxy statement, the fact that the expenses of the proxy will be borne by the Fund.
Response: The requested revision has been made.
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19. |
Staff Comment: Please note that, if the Fund does decide to retain an outside proxy solicitor, Schedule 14A requires that the Fund disclose the material features of any contract or arrangement for such solicitation and identify the party, as well as the cost or anticipated cost thereof.
Response: The Fund has retained D.F. King as an external proxy solicitor. The required disclosure has been added to the definitive proxy statement.
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20. |
Staff Comment: Please note that Item 403 of Regulation S-K requires the information in the table to be as of the most recent practicable date.
Response: The beneficial ownership table has been updated as of December 15, 2016.
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21. |
Staff Comment: Please revise Proposal 3 on the proxy card to include unaffiliated subadvisers and subadvisers that are affiliated with Dreyfus or The Bank of New York Mellon.
Response: We have separated the proposals to reflect Staff Comment No. 15 and revised them as follows:
To approve the implementation of a "manager of managers" arrangement whereby Dreyfus, under certain circumstances, would be able to hire and replace Fund sub-advisers that are either unaffiliated with Dreyfus or are wholly-owned subsidiaries of Dreyfus' ultimate parent company, The Bank of New York Mellon Corporation ("BNY Mellon"), without obtaining shareholder approval.
To approve the implementation of a "manager of managers" arrangement whereby Dreyfus, under certain circumstances, and subject to the Securities and Exchange Commission's issuance of an exemptive order to the Fund and Dreyfus, would be able to hire and replace Fund sub-advisers that are either unaffiliated or affiliated with Dreyfus (whether or not wholly-owned subsidiaries of BNY Mellon) without obtaining shareholder approval.
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Very truly yours,
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/s/ Lisa Goldstein
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Lisa Goldstein
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cc: David Stephens
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