UNIFIED SERIES TRUST
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
July 27, 2020
Securities & Exchange Commission
Division of Investment Management
100 F Street NE
Washington, DC 20549
Attention: Mr. David Orlic
Re: | Absolute Core Strategy ETF |
Unified Series Trust (“Registrant”) (SEC File Nos. 811-21237 and 333-100654)
Dear Mr. Orlic:
Below please find our responses to your comments with respect to the Securities and Exchange Commission staff’s review of the Registrant’s Preliminary Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934, filed July 16, 2020 (the “Proxy”), for the Absolute Core Strategy ETF (the “Fund”).
(1) | Comment: Page 10 of the Proxy indicates in the second to last paragraph that the cost of Okapi’s services will be paid by Absolute. Pursuant to Item 4(a)(3) please disclose the anticipated cost. |
Response: We intend to add the following sentence to the Proxy: “Okapi estimated the cost of these services to be approximately $16,000.”
(2) | Comment: Page 13 of the Proxy indicates in the first paragraph that the terms of the New ELA are substantially similar to the terms of the Amended Original ELA. Please disclose material dissimilarities or disclose that there are not any. |
Response: We intend to add the following sentence to the Proxy: “The New ELA permits Absolute to recoup fees previously waived under the Original ELA and Amended ELA.”
(3) | Comment: Page 17 of the Proxy indicates in the first paragraph that based upon the representations from Absolute, the Fund is not expected to be subject to any “unfair burden” as a result of the Transaction within the meaning of Section 15(f) under the Investment Company Act. Please confirm the Fund is in compliance with the Section 15(f) safe harbor. |
Response: Section 15(f) of the 1940 Act provides a safe harbor to investment advisers who may receive compensation or benefits in connection with the sale of securities or a sale of any other interest in the investment adviser, which results in an assignment of an investment advisory contract. That safe harbor is conditioned on the following: (a) for a period of three years after the time of such sale, at least 75% of the board of trustees are not interested persons of the investment adviser, as the term is defined in the 1940 Act, and (b) there is not imposed an unfair burden as a result of the sale.
Under Section 15(f), paragraph 2(B), an unfair burden includes any arrangement, during the two-year period after the date on which any such transaction occurs, whereby the investment adviser or corporate trustee or predecessor or successor investment advisers or corporate trustee or any interested person of any such adviser or any such corporate trustee receives or is entitled to receive any compensation directly or indirectly (i) from any person in connection with the purchase or sale of securities or other property to, from, or on behalf of such company, other than bona fide ordinary compensation as principal underwriter for such company, or (ii) from such company or its security holders for other than bona fide investment advisory or other services.
As detailed in the “Background” section related to Proposal 1 on page 11 of the Proxy, the transaction, which resulted in the change of control of Absolute did not and is not anticipated to result in any compensation payments, either direct or indirect, as contemplated by Section 15(f)(2)(B). Moreover, the only compensation that Absolute will receive following the transaction will be for bona fide investment advisory services provided to the Fund.
We further note, with respect to Section 15(f)(1)(A), all Trustees that comprise the Board of the Registrant are not interested as defined in Section 15(f)(2)(A).
(4) | Comment: Page 21 of the Proxy provides the voting standard for Proposal 1. Please add the voting standard for Proposal 2. |
Response: We intend to insert “and for approval of the New Sub-Advisory Agreement with respect to the Fund (Proposal 2)”.
(5) | Comment: Please add the principal officers of St. James on page 22. |
Response: We intend to add the below paragraph to page 22:
Investment Sub-Adviser. St. James serves as the investment sub-adviser to the Fund under the Interim Sub-Advisory Agreement. The address of St. James is 3838 Oak Lawn Avenue, Suite 1414, Dallas, TX 75219.
The following list includes the name, address and principal occupation of the principal executive officer and each director of St. James:
Name | Position | Principal Occupation |
Robert J. Mark | Managing Member | Portfolio Management |
Larry J. Redell | Member | Marketing |
The address for each of the aforementioned persons is 3838 Oak Lawn Avenue, Suite 1414, Dallas, TX 75219.
(6) | Comment: Please attach the actual proxy card to the response letter. |
Response: The proxy card is attached to this letter.
If you have any additional questions, or need additional information, please contact me at 513-346-3324.
Sincerely,
/s/ Elisabeth Dahl
Elisabeth Dahl
Secretary, Unified Series Trust
Copy to: | Mr. David R. Carson, President, Unified Series Trust |
Ms. Cassandra W. Borchers, Esq., Thompson Hine LLP