Investment Company Act of 1940
File No. 812-[ ]
Optimum Fund Trust, Delaware Group Adviser Funds, Delaware Group Cash Reserve, Delaware Group Equity Funds I, Delaware Group Equity Funds II, Delaware Group
Equity Funds IV, Delaware Group Equity Funds V, Delaware Group Foundation Funds, Delaware Group Global & International Funds, Delaware Group Government Fund, Delaware Group Income Funds, Delaware Group Limited-Term Government Funds, Delaware
Group State Tax-Free Income Trust, Delaware Group Tax Free Fund, Delaware Pooled Trust, Delaware VIP Trust, Voyageur Insured Funds, Voyageur Intermediate Tax Free Funds, Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur Mutual Funds III, and
Voyageur Tax Free Funds (each, a “Trust”),1 each a registered open-end investment company that offers one or more series of shares (each, a “Series” and collectively, the “Series”) and Macquarie Investment Management Business Trust (“MIMBT”),
on behalf of its series, Delaware Management
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As used herein, the term “Trust” includes any existing or future type of business organization operating as a registered management investment company that is managed by an Adviser.
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Company (“Adviser” or “DMC”, and
together with the Trusts and the Series, the “Applicants”), 2 the investment adviser to the Trusts, hereby file this application (the “Application”) for an order of the Securities and Exchange Commission (the “Commission”) under Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”).
Applicants request an order exempting Applicants from Section 15(c) of the 1940 Act to permit the board of trustees of the Trust (the “Board”),3 including a majority of those board members who are not parties to such contract or agreement or “interested persons,” as defined in Section 2(a)(19) of the 1940 Act, of any
such party (the “Independent Board Members”), to promptly enter into or materially amend a contract or agreement pursuant to which a sub-adviser (each, a “Sub-Adviser”) manages all or a portion of the assets of a Series or provides model portfolio or investment recommendation(s) to the Adviser that would be utilized in connection with the management of a Series (each, a “Sub-Advisory Agreement”) (each such action, a “Sub-Adviser Change”) at a non-in-person meeting called for the purpose of voting on
such approval,4 which would allow a Subadvised Series (as defined below) and its shareholders to benefit from a prompt Sub-Adviser Change.
Applicants request that the relief sought herein apply to the named Applicants, as well as to any future Series and any other existing or future registered
management investment company or series thereof that intends to rely on the requested order in the future and that (i) is managed by an Adviser, (ii) uses the multi-manager structure described in this Application, and (iii) complies with the terms
and conditions set forth herein (each, a “Subadvised Series”).5 All registered investment companies that intend to rely on the requested order are named as Applicants.
Any entity that relies on the requested order will do so only in accordance with the terms and conditions contained in this Application.
Applicants are seeking this exemption to enable the Adviser and the Board to obtain for each Subadvised Series the services of one or more Sub-Advisers
believed by the Adviser and the Board to be particularly well suited to manage, or to provide model portfolio or investment recommendation(s) with respect to, all or a portion of the assets of the Subadvised Series, and to make material amendments to
Sub-Advisory Agreements believed by the Adviser and the Board to be appropriate, without the delay and expense of convening an in-person meeting of the Board to approve the Sub-Adviser Change. The requested relief is necessary so that the Board can
take action quickly under the circumstances set out in this Application.
If the requested relief is granted, the Adviser would be permitted to implement a Sub-Adviser Change related to a Subadvised Series that was approved by the
Board, including a majority of the Independent Board Members, at a non-in-person meeting. For the reasons discussed below, Applicants believe that the requested relief is appropriate in the public interest and consistent with the protections of
investors and the purposes fairly intended by the policy and provisions of the 1940 Act. Applicants believe that each Subadvised Series and its shareholders would benefit from the requested relief because of delays in hiring or replacing a
Sub-Adviser and costs associated with holding an in-person Board meeting to approve a Sub-Adviser Change in the absence of such relief.
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The term “Adviser” includes (i) the Adviser or its successors and (ii) any entity controlling, controlled by, or under common control with, the Adviser or its successors. For the purposes of the requested order, “successor” is limited to
an entity resulting from a reorganization into another jurisdiction or a change in the type of business organization.
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The term “Board” also includes the board of trustees or directors of a future Subadvised Series.
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References in this Application to “non-in-person” Board meetings refer to any Board meeting (other than an in-person meeting) in which Board members may participate by any means of communication that allows those Board members
participating to hear each other simultaneously during the meeting.
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For purposes of this Application, the term “Sub-Adviser” will also apply to any Sub-Adviser to any wholly-owned subsidiary, as defined in the 1940 Act, of a Subadvised Series (each, a “Subsidiary”
and collectively, the “Subsidiaries”). The Adviser will serve as investment adviser to each Subsidiary and may retain one or more Sub-Advisers to manage or provide model portfolio or
investment recommendation(s) with respect to the assets of a Subsidiary. Applicants also request relief with respect to any Sub-Advisers who serve as Sub-Advisers to a Subsidiary. Where appropriate, Subsidiaries are also included in the term
“Subadvised Series.”
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Each Trust is organized as a Delaware statutory trust and is registered with the Commission as an open-end management investment company under the 1940 Act.
Each Trust either has or may have a Series that operates under a multi-manager structure and which is or will be offered and sold pursuant to a registration statement on Form N-1A. The Adviser serves as an “investment adviser,” as defined in Section
2(a)(20) of the 1940 Act, to each Series. The Trusts and their Series are not required to hold annual shareholder meetings. Each Series may have its own distinct investment objective, policies, and restrictions.
DMC is a series of MIMBT, which is a Delaware statutory trust and is registered with the Commission as an investment adviser under the Investment Advisers Act
of 1940, as amended (the “Advisers Act”). DMC provides investment advisory services to registered investment companies including the Series, as well as to certain other affiliated funds and
pooled vehicles. DMC serves, and each other Adviser will serve, as the investment adviser to each Subadvised Series pursuant to an investment advisory agreement with the relevant Trust (each an “Investment
Management Agreement” and together the “Investment Management Agreements”). DMC and each other Adviser is or will be registered with the Commission as an investment adviser under
the Advisers Act.
Each Investment Management Agreement will be approved by the Board, including a majority of the Independent Board Members, and by the shareholders of the
relevant Subadvised Series in the manner required by Sections 15(a) and 15(c) of the 1940 Act and, if applicable, Rule 18f-2 thereunder. The terms of these Investment Management Agreements will comply with Section 15(a) of the 1940 Act. Applicants
are not seeking an exemption from the 1940 Act with respect to the Investment Management Agreements. Pursuant to the terms of each Investment Management Agreement, the Adviser, subject to the supervision of the Board, will provide continuous
investment management services to each Subadvised Series. The Adviser will have responsibility for determining what portion of each Subadvised Series’ portfolio will be invested in securities and other assets and what portion, if any, will be held
uninvested in cash or cash equivalents. The Adviser will periodically review a Subadvised Series’ investment policies and strategies and based on the need of a particular Series may recommend changes to the investment policies and strategies of the
Series for consideration by the Board.
Each Investment Management Agreement will provide that the Adviser may, subject to the approval of the Board, including a majority of the Independent Board
Members, and the shareholders of the applicable Subadvised Series (if required), delegate portfolio management responsibilities of all or a portion of the assets of a Subadvised Series to one or more Sub-Advisers. In accordance with each Investment
Management Agreement, the Adviser will oversee each Sub-Adviser in its performance of its duties. The Adviser will continue to have overall responsibility for the management and investment of the assets of each Subadvised Series. For its services to
each Subadvised Series under the applicable Investment Management Agreement, the Adviser will receive an investment management fee from that Subadvised Series. A Sub-Adviser will receive an investment management fee from the Adviser or directly from
the Subadvised Series.
Under this structure, the Adviser, in its capacity as investment adviser, evaluates and oversees Sub-Advisers and makes recommendations about the hiring,
termination, and replacement of Sub-Advisers to the Board, at all times subject to the authority of the Board. This structure is commonly referred to as a “multi-manager” structure.
Pursuant to the authority under the Investment Management Agreement, the Adviser may enter into Sub-Advisory Agreements with various Sub-Advisers on behalf of
the Subadvised Series. The Sub-Advisers will be “investment advisers” to the Subadvised Series within the meaning of section 2(a)(20) of the 1940 Act and will provide investment management services to the Subadvised Series subject to, without
limitation, the requirements of Sections 15(c) and 36(b) of the 1940 Act. In addition, the Sub-Advisers will be registered with the Commission as
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investment advisers under the Advisers Act or not subject to such registration. The Adviser will engage in an on-going analysis of the continued advisability
of retaining a Sub-Adviser and will make recommendations to the Board as needed. The Adviser will also negotiate and renegotiate the terms of the Sub-Advisory Agreements with the Sub-Advisers, including the fees paid to the Sub-Advisers, and will
make recommendations to the Board as needed.
All Sub-Advisory Agreements currently in effect have been approved by the Board, including a majority of the Independent Board Members, and the initial
shareholder of the applicable Subadvised Series in accordance with Sections 15(a) and 15(c) of the 1940 Act and Rule 18f-2 thereunder, unless shareholder approval was not required in reliance on applicable exemptive relief.6 All future
Sub-Advisory Agreements will be approved by the Board in the same manner, provided that the Independent Board Members could approve a Sub-Adviser Change at a non-in-person Board meeting in reliance on the requested relief. The terms of each
Sub-Advisory Agreement will comply fully with the requirements of Section 15(a) of the 1940 Act.
Pursuant to the Sub-Advisory Agreements, the Adviser has agreed or will agree to pay the Sub-Advisers a fee out of the fee paid to the Adviser under the
Investment Management Agreement.7
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Multi-Manager Structure
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In recent years, a number of investment advisers, including the Adviser, have sponsored investment companies registered under the 1940 Act or series thereof
(each, a “registered fund”) that provide exposure to multiple strategies across various asset classes. These registered funds allow investors to more easily access such strategies without
the additional transaction costs and administrative burdens of investing in multiple funds to seek to achieve comparable exposures and investment allocations. Such registered funds may be structured as (i) multi-manager funds, where the investment
adviser selects multiple sub-advisers to manage portions of the registered fund’s assets (this is the typical approach currently utilized by the Adviser); (ii) fund of funds where an investment adviser invests a registered fund’s assets in multiple
registered funds or investment companies that rely on an exception from registration under the 1940 Act (each, a “private fund” and, together with the registered funds, each a “fund” and together, the “funds”) to gain the exposures; or (iii) a combination of a multi-manager fund and a fund of funds.
When a Subadvised Series utilizes a multi-manager strategy, its Adviser achieves its desired exposures to specific strategies by allocating discrete portions
of the Subadvised Series’ assets to various Sub-Advisers and, in some cases, by managing a portion of the Subadvised Series’ assets directly. Each Sub-Adviser manages its discrete portion of the Subadvised Series’ assets in accordance with specific
investment guidelines. Over time, the Adviser may adjust the Subadvised Series’ allocations among the various strategies and sub-strategies based on the Adviser’s assessment of market conditions and potential investment opportunities.
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Rationale for the Requested Relief
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When the Adviser deploys a multi-manager structure to access the desired exposures, each Sub-Advisory Agreement must be entered into, materially amended and
renewed in accordance with the provisions of Section 15 of the 1940 Act, as modified by any applicable exemptive relief. Section 15(c) requires that the Sub-Advisory Agreement be approved by the vote of a majority of the Independent Board Members
cast at an in-person meeting. Boards of registered funds, including the Boards of the Trusts, typically hold in-person meetings on a quarterly basis. Markets are not static, however, throughout the three to four months between in-person registered
fund board meeting dates. During these periods, market conditions may change or investment opportunities may arise that the Adviser may wish to take advantage of by implementing a Sub-Adviser Change. At these moments it may be impractical and/or
costly to hold an additional in-person Board meeting, especially given the geographic diversity of Board members and the additional cost of holding in-person Board meetings. As a result, once the Adviser completes its diligence of
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Applicants currently rely on a multi-manager exemptive order to implement Sub-Adviser Changes without obtaining shareholder approval. See Delaware Management Business Trust, et al., Investment Company Act Release Nos. 32395 (Dec. 19, 2016) (notice) and 32423 (Jan. 17, 2017) (order). In the future, an Adviser, a Sub-Adviser and a Subadvised Series may rely on an amended version
of this multi-manager exemptive order or substantially similar relief.
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A Subadvised Series also may pay advisory fees directly to a Sub-Adviser.
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a prospective Sub-Adviser, the in-person Board meeting requirement creates an unnecessary burden for the Board that does not benefit the Subadvised Series’
shareholders.
Unlike the burdensome process for approving Sub-Advisory Agreements, Board approval may not be required if the Adviser accesses the desired exposures through
investments in other funds. Investments by Subadvised Series in registered funds could be made in compliance with the limitations in Section 12(d)(1) of the 1940 Act or rules under the 1940 Act. If the Adviser were to access the desired exposures
through investing the Subadvised Series’ assets in private funds, Section 12(d)(1) would not limit the amount of a registered fund’s total assets that may be invested in the underlying private fund.8 If the requested order is not granted,
the Adviser could potentially have the option of accessing a desired investment exposure between in-person Board meeting dates through investments in other funds managed by the prospective Sub-Adviser, including private funds, which could increase
costs for shareholders when retaining the Sub-Adviser to manage a sleeve of the Subadvised Series directly is a viable option. For example, acquired fund fees and expenses generated by a fund investing in another fund are generally higher than the
fees generated if a sub-adviser were hired to manage the strategy directly for the fund.
The requested order would be consistent with the Board’s statutory duty to request and evaluate such information as may reasonably be necessary to evaluate
the terms of a Sub-Advisory Agreement. For example, an Adviser may identify a Sub-Adviser prior to an in-person Board meeting date that it wants to engage, but there may not be enough time before the in-person meeting date for management to compile
and furnish the complete package of materials that the Board requests to evaluate the Sub-Advisory Agreement in accordance with its duties under Section 15(c), along with a summary of the Sub-Adviser’s compliance program to support the Board’s
approval of the Sub-Adviser’s policies and procedures in accordance with Rule 38a-1(a)(2) under the 1940 Act. The requested order would benefit a Subadvised Series by allowing the Board, including a majority of the Independent Board Members, to
approve a Sub-Adviser Change at an appropriate time once diligence is complete, instead of waiting until the next in-person Board meeting date and potentially missing out on market opportunities.
The requested order would also apply to material amendments to a Sub-Advisory Agreement.9 For example, a Sub-Advisory Agreement with an existing
Sub-Adviser may be limited to a particular sub-strategy, although the Sub-Adviser has the expertise and ability to manage additional sub-strategies. If the Adviser desires to engage the Sub-Adviser to manage a separate discrete portion of a
Subadvised Series’ assets in accordance with a sub-strategy that is not currently within the scope of the guidelines under the Sub-Adviser’s existing Sub-Advisory Agreement, but is otherwise consistent with a Subadvised Series’ investment objective
and strategies, the Adviser may determine it is necessary to materially amend the Sub-Advisory Agreement. If an Adviser’s portfolio management team makes this determination between in-person Board meeting dates, the Board of the Subadvised Series
could approve the Sub-Adviser Change at a non-in-person meeting in reliance on, and subject to the conditions of, the requested order. See Section IV.B. below for additional legal analysis supporting the
rationale for the requested relief.
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REQUEST FOR EXEMPTIVE RELIEF
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Section 6(c) of the 1940 Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or
transactions, from any provision or provisions of the 1940 Act or any rule or regulation thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the 1940 Act. Applicants believe that the requested relief described in this Application meets this standard.
Section 15(c) of the 1940 Act prohibits a registered fund having a board from entering into, renewing or performing any contract or agreement whereby a person
undertakes regularly to serve or act as an investment adviser (including
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Such investments in private funds would be subject to other applicable provisions of the 1940 Act.
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The requested relief would not apply to renewals of a Sub-Advisory Agreement.
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a sub-adviser) of the registered fund, unless the terms of such contract or agreement and any renewal thereof have been approved by the vote of a majority of
the registered fund’s board members, who are not parties to such contract or agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval.
Section 15(c) provides that it shall be the duty of the board members of a registered fund to request and evaluate, and the duty of an investment adviser (or
sub-adviser) to such registered fund to furnish, such information as may reasonably be necessary to evaluate the terms of any contract whereby a person undertakes regularly to serve or act as investment adviser (or sub-adviser) of such registered
fund.
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Necessary or Appropriate in the Public Interest
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Applicants believe that permitting the Independent Board Members to approve Sub-Adviser Changes at non-in-person meetings without incurring unnecessary delay
or expense is necessary or appropriate and in the interests of Subadvised Series shareholders and will allow the Subadvised Series to operate more efficiently. Without the delay inherent in holding in-person Board meetings (and the attendant
difficulty of obtaining the necessary quorum for, and the additional costs of, an unscheduled in-person Board meeting), the Subadvised Series will be able to act more quickly and with less expense to add or replace Sub-Advisers when the Board and the
Adviser believe that a change would benefit the Subadvised Series. Under the multi-manager structure, the selection of a Sub-Adviser is similar to changes in the membership of a registered fund’s portfolio management team, which do not require
registered fund board approval.
In essence, the in-person meeting requirement creates an artificial impediment that may prevent the Board of a Subadvised Series from taking immediate action
once an Adviser completes its diligence of a potential Sub-Adviser that it wishes to on-board. Requiring a Board to hold an off-cycle in-person meeting to approve a Sub-Adviser Change, or to delay its approval until its next regularly scheduled
in-person meeting, creates an unnecessary burden for the Board and the Adviser that is not beneficial for shareholders or necessary or appropriate in the public interest.
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Consistent with the Protection of Investors
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Applicants believe that the requested relief is consistent with the protection of investors. Primary responsibility for management of the Subadvised Series,
including the selection and supervision of the Sub-Advisers, is vested in the Adviser, subject to the oversight of the Board. Each Investment Management Agreement is, and will remain, fully subject to the requirements of Section 15(c) of the 1940
Act.
Once the Adviser makes an informed selection of a Sub-Adviser, Applicants believe it would be consistent with the protection of investors to permit the Board,
including a majority of the Independent Board Members, to approve the Sub-Adviser Change at a non-in-person meeting called for the purpose of voting on such approval. Any such non-in-person approval would be conducted in accordance with the Board’s
typical process for approving a Sub-Adviser Change and consistent with the Board’s duty under Section 15(c) to request and evaluate such information as may reasonably be necessary to evaluate the terms of any Sub-Advisory Agreement, and the Adviser’s
and Sub-Adviser’s duty under Section 15(c) to furnish such information. Management will represent that the materials provided to the Board for the non-in-person meeting include the same information the Board would have received if approval of the
Sub-Adviser Change were sought at an in-person Board meeting. In connection with seeking Board approval of a Sub-Adviser Change at a non-in-person meeting, the Adviser will recommend the retention of the Sub-Adviser and the Trust’s chief compliance
officer or his or her designee will provide such information as the Board may reasonably request to assist it in determining that the Sub-Adviser has adopted policies and procedures reasonably designed to prevent violation of the “federal securities
laws”10 by the Sub-Adviser. If, however, one or more Board members assert that an in-person meeting would make a difference and request that the Sub-Advisory
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As defined in Rule 38a-1(e)(1) under the 1940 Act, as amended.
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Agreement be considered in-person, then the Board will wait to consider the Sub-Advisory Agreement until an in-person meeting is convened, unless such request
is rescinded.
If the requested relief is not granted, the Adviser would potentially still have the option of accessing a desired exposure by investing a Subadvised Series’
assets in a fund managed by the Sub-Adviser. Retaining a Sub-Adviser to manage a portion of a Subadvised Series, as opposed to investing in a fund managed by the Sub-Adviser, provides several benefits to the Subadvised Series and its shareholders
that support the requested exemptive relief and are consistent with the protection of investors. The benefits to a Subadvised Series and its shareholders from retaining a Sub-Adviser to gain a desired exposure, instead of accessing the exposure
through an investment in another fund, include:
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Daily transparency regarding investments managed by the Sub-Adviser;
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Annual review of the Sub-Adviser’s compliance program;
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Avoiding additional acquired fund fees and expenses;
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Annual Board review of the Sub-Advisory Agreement and related compensation;
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Ability to access the exposure directly instead of through a vehicle that may not allow for daily liquidity and may not be subject to the protections of the 1940 Act;
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Allowing the Adviser to customize the sub-strategy implemented by the Sub-Adviser to access the exposure;
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Avoiding costs that would be borne by the Subadvised Series to hold additional in-person Board meetings, such as travel, lodging and meals and Board member compensation for attending additional in-person
meetings (which is typically greater than Board member compensation for attending additional non-in-person meetings); and
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Under Section 36(b) of the 1940 Act, the Sub-Adviser will be deemed to have a fiduciary duty with respect to the receipt of compensation for services, or of payments of a material nature, from the Subadvised Series.
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3. |
Consistent with the Policy and Provisions of the 1940 Act
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Applicants believe the requested relief is consistent with the policy and provisions of the 1940 Act. The requirement that the vote of a majority of a
registered fund’s disinterested board members approving an advisory agreement or a sub-advisory agreement be cast in person was added to Section 15(c) of the 1940 Act by the Investment Company Amendments Act of 1970 (the “1970 Amendments Act”).11 Congress states in the legislative history of the 1970 Amendments Act that the bill would amend Section 15(c) to provide that the voting requirements of the Section “can be
satisfied only by directors who are personally present at a meeting at which their votes are taken. The proposed amendment is intended to assure informed voting on
matters which require action by the board of directors of registered investment companies.”12 (emphasis added.) The staff of the Commission has stated that this “requirement that disinterested directors cast their votes in person
represents a strong Congressional policy in favor of eliminating absentee approval by board members.”13
The Commission has provided exemptive relief from the in-person meeting requirement in Section 15(c) by amending Rule 15a-4 under the 1940 Act to, among other
things, permit registered fund boards “to participate in a meeting to approve an interim contract [with an investment adviser or a sub-adviser] by any means of communication that allows all participants to hear each other at the same time, such as a
telephone conference.”14
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See Investment Company Amendments Act of 1970, Public Law 91-547, enacted December 14, 1970.
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Investment Company Amendments Act of 1970, H.R. Rep. No. 1382, 91st Cong., 2d Sess. 25-26 (1970); Investment Company Amendments Act of 1969, S. Rep. No. 184, 91st Cong., 1st Sess. 39 (1969).
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American National Growth Fund, Inc., SEC Staff Letter (Nov. 17, 1974). The in-person voting requirements were added as part of the 1970 Amendments Act and have historically been viewed as requiring directors to be “physically present” when
voting. Pub. L. 91-547 (Dec. 14, 1970).
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Temporary Exemption for Certain Investment Advisers, Investment Company Act Release No. 24177 (Nov. 29, 1999).
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The Commission stated at the time that “[t]his provision should result in savings in time and travel costs.”15 In the twenty years that have passed
since this amendment to Rule 15a-4, registered fund boards have routinely relied on this exemptive relief from the in-person meeting requirement to approve certain interim advisory contracts at non-in-person board meetings while continuing to fulfill
their statutory duty to evaluate the terms of the contract.
Almost five decades have elapsed since the in-person meeting requirement was added to Section 15(c) of the 1940 Act. Due to the countless technological
advances that have occurred since the 1970s, registered funds are able to provide materials to their board members electronically in an easily readable format, and board members can easily communicate with one another and with management in advance
of a meeting through various forms of communication, many of which did not exist in 1970. These technological advances allow registered fund board members to assure they are well informed prior to a board meeting date. Given the various forms of
communication available today, registered fund boards can hold non-in-person meetings at which each board member is personally present and able to assure themselves that they are informed as to the matters at the non-in-person meeting that require
action by the registered fund board.
The requested relief would not result in absentee approval of Sub-Adviser Changes by the Independent Board Members. The Independent Board Members necessary to
approve a Sub-Adviser Change would be personally present and participating in a meeting where all participating Board members can hear each other and be heard by each other during the meeting.16 The requested relief could not be relied
upon to approve a Sub-Adviser Change by written consent or another form of absentee approval by the Independent Board Members. Similar to the amendments to Rule 15a-4, the requested relief would result in savings in time and travel costs. In light of
the foregoing analysis, the Applicants submit that the requested relief would be consistent with the policies and provisions of the 1940 Act and would eliminate unnecessary expenses and delays associated with conducting an in-person Board meeting.
The Commission has issued an exemptive order under the 1940 Act permitting a fund’s board to consider a Sub-Adviser Change, without complying with the
requirement under Section 15(c) of the 1940 Act that the board meet in-person to conduct such approvals, in situations where the fund would benefit from effecting a Sub-Adviser Change promptly.17 The Commission stated in Blackstone, that
while it continued to believe that a board’s decision- making process may benefit from the directors’ having the opportunity to interact in person, as a group, and individually, it recognized that under the circumstances described in the application,
the need to act promptly for the benefit of a fund may justify the board’s meeting on a non-in-person basis, and that technological advances enable directors to hold such meetings in a manner where the directors can be personally present and able to
assure themselves that they are informed as to the matter that requires action by the board.
Applicants agree that any order of the Commission granting the requested relief will be subject to the following conditions:
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Id. See also Temporary Exemption for Certain Investment Advisers, Investment Company Act Release No. 23325 (July 22, 1998) (“The proposed amendments also would facilitate a special meeting to
approve an interim contract, by permitting the fund’s board of directors to participate by telephone or similar means of communication that allows all participants to hear each other at the same time.”). Allowing the flexibility to approve
Sub-Adviser Changes at a non-in-person meeting would avoid unnecessarily burdening registered fund board members with the time and cost associated with travel for and attendance at additional in-person meetings.
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Technology that includes visual capabilities will typically be used unless unanticipated circumstances arise.
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Blackstone Alternative Investment Funds and Blackstone Alternative Investment Advisors LLC, Investment Company Act Release Nos. 33748 (Jan. 21, 2020) (notice) and 33801 (Feb.19, 2020) (order) (“Blackstone”).
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The Independent Board Members will approve the Sub-Adviser Change at a non-in-person meeting in which Board members may participate by any means of communication that allows those Board members participating to
hear each other simultaneously during the meeting.
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2. |
Management will represent that the materials provided to the Board for the non-in-person meeting include the same information the Board would have received if a Sub-Adviser Change were sought at an in-person
Board meeting.
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The notice of the non-in-person meeting will explain the need for considering the Sub-Adviser Change at a non-in-person meeting. Once notice of the non-in-person meeting to consider a Sub-Adviser Change is
sent, Board members will be given the opportunity to object to considering the Sub-Adviser Change at a non-in-person Board meeting. If a Board member requests that the Sub-Adviser Change be considered in-person, the Board will consider the
Sub-Adviser Change at an in-person meeting, unless such request is rescinded.
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4. |
A Subadvised Series’ ability to rely on the requested relief will be disclosed in the Subadvised Series’ registration statement.
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5. |
In the event that the Commission adopts a rule under the 1940 Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.
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Pursuant to Rule 0-2(f), each Applicant states that its address is as indicated below:
David F. Connor, Esq.
Macquarie Investment Management
100 Independence
610 Market Street
Philadelphia, PA 19106-2354
Applicants further state that all written or oral communications concerning this Application should be directed to:
Bruce G. Leto, Esq.
Michael W. Mundt, Esq.
Stradley Ronon Stevens & Young, LLP
One Commerce Square
2005 Market Street, Ste. 2600
Philadelphia, PA 19103-7018
(215) 564-8115, BLeto@stradley.com
(202) 419-8403, MMundt@stradley.com
All of the requirements for execution and filing of this Application on behalf of the Applicants have been complied with in accordance with the applicable
organizational documents of the Applicants, and the undersigned officers of the Applicants are fully authorized to execute this Application. The authorizations of the Applicants, including the resolutions of the Applicants authorizing the filing of
this Application, required by Rule 0-2(c) under the 1940 Act are included as Exhibits A-1 through A-3 to this Application. The verifications required by Rule 0-2(d) under the 1940 Act are included as Exhibits B-1 through B-3 to this Application.
Applicants desire that the Commission issue the requested order pursuant to Rule 0-5 under the 1940 Act without conducting a hearing.
For the foregoing reasons, Applicants respectfully request that the Commission issue an order under Section 6(c) of the 1940 Act granting the relief requested
in the Application. Applicants submit that the requested exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.
Page 11 of 19 Sequentially Numbered Pages
The Applicants have caused this Application to be duly signed on their behalf on the 8th day of December, 2020.
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OPTIMUM FUND TRUST
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By:
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/s/ Anthony G. Ciavarelli
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Name:
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Anthony G. Ciavarelli
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Title:
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Assistant Secretary
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DELAWARE GROUP ADVISER FUNDS, DELAWARE GROUP CASH RESERVE, DELAWARE GROUP EQUITY FUNDS I, DELAWARE GROUP EQUITY FUNDS II, DELAWARE GROUP EQUITY FUNDS IV, DELAWARE
GROUP EQUITY FUNDS V, DELAWARE GROUP FOUNDATION FUNDS, DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, DELAWARE GROUP GOVERNMENT FUND, DELAWARE GROUP INCOME FUNDS, DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, DELAWARE GROUP STATE TAX-FREE
INCOME TRUST, DELAWARE GROUP TAX FREE FUND, DELAWARE POOLED TRUST, DELAWARE VIP TRUST, VOYAGEUR INSURED FUNDS, VOYAGEUR INTERMEDIATE TAX FREE FUNDS, VOYAGEUR MUTUAL FUNDS, VOYAGEUR MUTUAL FUNDS II, VOYAGEUR MUTUAL FUNDS III, AND VOYAGEUR TAX
FREE FUNDS
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By:
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/s/ David F. Connor
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Name:
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David F. Connor
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Title:
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Secretary
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MACQUARIE INVESTMENT MANAGEMENT BUSINESS TRUST, ON BEHALF OF ITS SERIES, DELAWARE MANAGEMENT COMPANY
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By:
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/s/ David F. Connor
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Name:
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David F. Connor
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Title:
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Senior Vice President/General Counsel/Secretary
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Page 12 of 19 Sequentially Numbered Pages
EXHIBITS TO APPLICATION
The following materials are made a part of the Application and are attached hereto:
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Designation
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Document
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Exhibits A-1 through A-3
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Authorizations
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Exhibits B-1 through B-3
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Verifications
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Page 13 of 19 Sequentially Numbered Pages
Exhibit A-1
AUTHORIZATION
The undersigned, Anthony G. Ciavarelli, hereby certifies that he is the duly elected Assistant Secretary of the Optimum Fund Trust (the “Trust”); that, with
respect to the attached application for exemption from the provisions of the Investment Company Act of 1940, the rules and forms thereunder and any amendments thereto (such application along with any amendments, the “Application”), all actions
necessary to authorize the execution and filing of the Application have been taken and the person signing and filing the Application on behalf of the Trust is fully authorized to do so; and that the Board of the Trust adopted the following
resolutions on May 15, 2020:
RESOLVED, that the appropriate officers of the Trust be, and each hereby is, authorized and directed, with the
assistance of counsel, to prepare, execute and file with the U.S. Securities and Exchange Commission, an Application for an Order of Exemption pursuant to Section 6(c) of the 1940 Act, and any amendments thereto, exempting the Trust and Macquarie
Investment Management Business Trust, on behalf of its series Delaware Management Company (“DMC”), from the provisions of Section l5(c) of the 1940 Act to permit DMC to enter into or materially amend Sub-Advisory Agreements that were approved by the
Board, including a majority of the non-interested members of the Board, at a non-in-person meeting called for the purpose of voting on such Sub-Adviser Changes; and it is
FURTHER RESOLVED, that the officers of the Trust be, and each hereby is, authorized and directed to execute and
deliver any and all documents and take any and all other action as may be necessary or appropriate in order to effectuate the foregoing resolution.
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By:
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/s/ Anthony G. Ciavarelli
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Name:
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Anthony G. Ciavarelli
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Title:
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Assistant Secretary
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Page 14 of 19 Sequentially Numbered Pages
Exhibit A-2
AUTHORIZATION
The undersigned, David F. Connor, hereby certifies that he is the duly elected Secretary of the Delaware Group Adviser Funds, Delaware Group Cash Reserve,
Delaware Group Equity Funds I, Delaware Group Equity Funds II, Delaware Group Equity Funds IV, Delaware Group Equity Funds V, Delaware Group Foundation Funds, Delaware Group Global & International Funds, Delaware Group Government Fund, Delaware
Group Income Funds, Delaware Group Limited-Term Government Funds, Delaware Group State Tax-Free Income Trust, Delaware Group Tax-Free Fund, Delaware Pooled Trust, Delaware VIP Trust, Voyageur Insured Funds, Voyageur Intermediate Tax Free Funds,
Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur Mutual Funds III, and Voyageur Tax Free Funds (each, a “Trust” and collectively, the “Trusts”), that, with respect to the attached application for exemption from the provisions of the
Investment Company Act of 1940, the rules and forms thereunder and any amendments thereto (such application along with any amendments, the “Application”), all actions necessary to authorize the execution and filing of the Application have been taken
and the person signing and filing the Application on behalf of each Fund is fully authorized to do so; and that the Board of each Fund adopted the following resolutions on May 20, 2020:
RESOLVED, that the appropriate officers of the Trusts be, and each hereby is, authorized and directed, with the
assistance of counsel, to prepare, execute and file with the U.S. Securities and Exchange Commission, an Application for an Order of Exemption pursuant to Section 6(c) of the 1940 Act, and any amendments thereto, exempting the Trusts and Macquarie
Investment Management Business Trust, on behalf of its series Delaware Management Company (“DMC”), from the provisions of Section l5(c) of the 1940 Act to permit DMC to enter into or materially amend Sub-Advisory Agreements that were approved by the
Boards, including a majority of the non-interested members of the Boards, at a non-in-person meeting called for the purpose of voting on such Sub-Adviser Changes; and it is
FURTHER RESOLVED, that the officers of the Trusts be, and each hereby is, authorized and directed to execute and
deliver any and all documents and take any and all other action as may be necessary or appropriate in order to effectuate the foregoing resolution.
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By:
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/s/ David F. Connor
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Name:
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David F. Connor
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Title:
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Secretary
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Page 15 of 19 Sequentially Numbered Pages
Exhibit A-3
AUTHORIZATION
The undersigned, David F. Connor, hereby certifies that he is the duly elected Secretary of Macquarie Investment Management Business Trust (“MIMBT”), on
behalf of its series, Delaware Management Company (“DMC”), that, with respect to the attached application for exemption from the provisions of the Investment Company Act of 1940, rules and forms thereunder and any amendments thereto (such application
along with any amendments, the “Application”), all actions necessary to authorize the execution and filing of the Application under the charter documents and By-laws of the MIMBT have been taken and the person signing and filing the Application by
MIMBT on behalf of the DMC is fully authorized to do so.
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By:
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/s/ David F. Connor
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Name:
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David F. Connor
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Title:
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Secretary
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Page 16 of 19 Sequentially Numbered Pages
Exhibit B-1
VERIFICATION
The undersigned, states that he has duly executed this Application for an Exemptive Order dated December 8, 2020, for and on behalf of Optimum Fund Trust,
that he is the Assistant Secretary of such company; and that all action by trustees and other persons necessary to authorize the undersigned to execute and file such instrument has been taken. The undersigned further states that he is familiar with
such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.
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By:
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/s/ Anthony G. Ciavarelli
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Name:
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Anthony G. Ciavarelli
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Title:
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Assistant Secretary
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Page 17 of 19 Sequentially Numbered Pages
Exhibit B-2
VERIFICATION
The undersigned, states that he has duly executed this Application for an Exemptive Order dated December 8, 2020, for and on behalf of the Delaware Group
Adviser Funds, Delaware Group Cash Reserve, Delaware Group Equity Funds I, Delaware Group Equity Funds II, Delaware Group Equity Funds IV, Delaware Group Equity Funds V, Delaware Group Foundation Funds, Delaware Group Global & International
Funds, Delaware Group Government Fund, Delaware Group Income Funds, Delaware Group Limited-Term Government Funds, Delaware Group State Tax-Free Income Trust, Delaware Group Tax-Free Fund, Delaware Pooled Trust, Delaware VIP Trust, Voyageur Insured
Funds, Voyageur Intermediate Tax Free Funds, Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur Mutual Funds III, and Voyageur Tax Free Funds (each, a “Trust”), that he is the Secretary of each Trust; and that all action by trustees and other
persons necessary to authorize the undersigned to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the
best of his knowledge, information and belief.
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By:
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/s/ David F. Connor
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Name:
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David F. Connor
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Title:
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Secretary
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Page 18 of 19 Sequentially Numbered Pages
Exhibit B-3
VERIFICATION
The undersigned, states that he has duly executed this Application for an Exemptive Order dated December 8, 2020, for and on behalf of the Macquarie
Investment Management Business Trust on behalf of its series, Delaware Management Company, that he is the Senior Vice President/General Counsel/Secretary of such company; and that all action by trustees and other persons necessary to authorize the
undersigned to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information
and belief.
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By: |
/s/ David F. Connor
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Name:
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David F. Connor
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Title:
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Senior Vice President/General Counsel/Secretary
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