MORGAN, LEWIS & BOCKIUS LLP
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
December 22, 2015
VIA EDGAR
Securities and Exchange Commission
Division of Investment Management
100 F Street, NE
Washington, D.C. 20549
Re: Pioneer Series Trust V (File Nos. 333-129005; 811-21823)
Registration Statement on Form N-1A
Ladies and Gentlemen:
This letter is to respond to comments we received from Mr. Jay
Williamson of the Staff of the Division of Investment Management of the
Securities and Exchange Commission (the "Commission") regarding Post-Effective
Amendment No. 25 to the Registration Statement on Form N-1A of Pioneer Series
Trust V (the "Registrant"), with respect to its series Pioneer Long/Short Bond
Fund (the "Fund"). Following are the Staff's comments and the Registrant's
responses thereto:
1. COMMENT: The Staff asked that the Registrant provide a letter to the
Commission responding to the Staff's comments and that includes
certain "Tandy" acknowledgments.
RESPONSE: A Tandy representation letter executed in connection with the
filing of this response is attached hereto as Exhibit A.
2. COMMENT: The Staff requested that the Registrant confirm in its response
that Pioneer has no ability to recoup any amounts waived or
expenses reimbursed under the contractual fee waiver discussed
in Footnote 2 to the Fee Table.
RESPONSE: The Registrant confirms that Pioneer has no ability to recoup
any amounts waived or expenses reimbursed under the contractual
fee waiver discussed in Footnote 2 to the Fee Table.
3. COMMENT: The Staff noted that the Fund appears to invest in credit
default swaps to a significant extent. The Staff suggested that
the Registrant add disclosure to the
Prospectus that highlights the extent of the Fund's use of
credit default swaps and related risks.
RESPONSE: The Registrant notes that, as indicated in the Prospectus, the
Fund has the flexibility to invest in a variety of derivative
instruments, including but not limited to credit default swaps.
The Registrant notes that it believes that the current
disclosure accurately describes the Fund's use of credit default
swaps and other derivative instruments, and that no additional
disclosure is required. However, the Registrant will revise the
second and third sentences of the Fund's principal investment
strategy disclosure to highlight the Fund's use of credit
default swaps, as follows: "The Fund holds long positions
through the purchase and sale of debt instruments and THROUGH
THE USE OF CREDIT DEFAULT SWAPS AND OTHER derivatives. The Fund
gains short exposure to markets, sectors or instruments mainly
through the use of CREDIT DEFAULT SWAPS AND OTHER derivatives."
4. The Staff noted that the Registrant states that "derivative instruments
that provide exposure to debt instruments or have similar economic
characteristics may be used to satisfy the Fund's 80% policy."
a. COMMENT: The Staff requested that the Registrant clarify what
derivatives it believes have similar economic characteristics to
debt instruments.
RESPONSE: The Registrant notes that it will revise the disclosure to state
that "derivative instruments that provide exposure to debt
instruments or have similar economic characteristics, including
but not limited to interest rate swaps, credit default swaps,
and other derivatives, may be used to satisfy the Fund's 80%
policy."
b. COMMENT: The Staff requested that the Registrant confirm how
derivatives will be valued for purposes of complying with the
Fund's 80% policy. The Staff noted that it is the Staff's
position that market value should be used for this purpose.
RESPONSE: The Registrant confirms that the Fund currently uses the market
value of derivatives for purposes of complying with the Fund's
80% policy.
5. COMMENT: The Staff noted that the Registrant states that "the Fund may
gain long and short exposure to individual sectors, markets,
currencies or securities by investing in a variety of derivative
instruments" and then lists multiple types of derivatives. The
Staff noted that it is unclear to the Staff from the disclosure
which types of derivatives the Fund principally invests in, and
how the Fund uses derivatives to meet its investment objectives.
The Staff referred the Registrant to the observations and
concerns noted in the letter from Barry D. Miller, Associate
Director, Division of Investment Management, SEC to Karrie
McMillan, General Counsel, ICI (July 30, 2010) regarding
derivatives related disclosure by
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investment companies, and requested that the Registrant revise
the disclosure as appropriate.
RESPONSE: The Registrant notes that, as indicated in the Prospectus, the
Fund has the flexibility to invest in a variety of derivative
instruments and will invest in a particular type of derivative
instrument based on a number of factors. The Registrant notes
that the Prospectus contains disclosure regarding specific
derivatives instruments the Fund may use as part of its
principal investment strategies, as well as the associated
purposes of such use. The Registrant notes that it believes that
the disclosure regarding the Fund's use of derivatives addresses
the observations and concerns noted in the letter from the
Division of Investment Management to the ICI regarding
derivatives-related disclosure by investment companies.
Accordingly, the Registrant submits that no change to the
disclosure is required. However, the Registrant will revise the
second and third sentences of the Fund's principal investment
strategy disclosure to highlight the Fund's use of credit
default swaps, as indicated in the response to Comment No. 3
above.
6. COMMENT: The Staff requested that the Registrant review the risk
disclosure responsive to Items 4 and 9 of Form N-1A in light of
the general disclosure requirements of Form N-1A. In this
respect, the Staff noted that the disclosure should be clear,
concise and understandable, and include only as much information
as is necessary for an average investor to understand the
particular characteristics of the Fund.
RESPONSE: The Registrant notes that it believes that the disclosure
referenced by the Staff accurately describes the risks
associated with the Fund's investment strategies, and that no
change to the disclosure is required.
7. COMMENT: The Staff noted that it read the Fund's Form N-CSR for the
period ended February 28, 2015, including the Q&A with the
Fund's portfolio managers. The Staff noted that, in its view,
the Q&A portion of the Form N-CSR is more informative for retail
investors and better enables them to understand the Fund's
investment strategy than what is currently included in the
Prospectus in response to Items 4 and 9 of Form N-1A. The Staff
noted that, at the same time, the investment strategy described
in the Form N-CSR appears at times to the Staff to be
inconsistent with the Prospectus disclosure. The Staff noted
that, for example, in the Q&A portion of the Form N-CSR, the
Fund's portfolio managers indicate an investment approach in two
distinct strategies. The Staff noted that one strategy is
directional and the other involves relative value-based trading
strategies, and noted that the portfolio managers also reference
a risk budget and currency strategies. The Staff noted that the
Prospectus refers to an alpha strategy and a beta strategy and
noted that, in its view, it is not entirely clear how the
discussion in the Form N-CSR reconciles with the discussion in
the Fund's Prospectus. The Staff requested that the Registrant
review its Items
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4 and 9 disclosure to ensure that it is consistent with how the
portfolio managers are currently managing the Fund.
RESPONSE: The Registrant notes that it believes that the disclosure in the
Prospectus is consistent with the discussion in the Form N-CSR
and with how the portfolio managers are currently managing the
Fund. Accordingly, the Registrant respectfully submits that no
change to the disclosure is required.
8. COMMENT: The Staff noted that in the Fund's Form N-CSR, the Fund's
portfolio managers state that virtually all of the Fund's
investment strategies are implemented through derivatives and,
therefore, the Fund's performance will always be affected by
derivatives. The Staff requested that the Registrant explain how
the Fund's use of derivatives complies with the Fund's 80%
policy, relevant Staff and Commission guidance, and is otherwise
consistent with the Fund's disclosure.
RESPONSE: The Registrant notes that the discussion in the Fund's Form
N-CSR refers to the use of derivatives in implementing the
Fund's trading strategies, in terms of their effect on return
and risk, and does not refer to the composition of the Fund's
portfolio for purposes of the Fund's 80% policy. The Registrant
notes that the Fund holds a substantial portfolio of debt
securities in satisfaction of the Fund's 80% policy. To the
extent that derivatives are also used to satisfy the Fund's 80%
policy, the Registrant notes that the Staff has indicated that
an investment company may include a synthetic instrument in the
80% basket if it has economic characteristics similar to the
securities included in that basket in the adopting release for
Rule 35d-1 under the Investment Company Act of 1940, as amended
(the "1940 Act"). Consistent with the Staff's guidance, the
Registrant states in the Prospectus that "derivative instruments
that provide exposure to debt instruments or have similar
economic characteristics may be used to satisfy the Fund's 80%
policy." Accordingly, the Registrant believes that the use of
derivatives to satisfy the Fund's 80% policy is consistent with
the 80% policy, relevant Staff and Commission guidance, and the
Fund's disclosure.
9. COMMENT: The Staff requested that, given the extent of the Fund's credit
default swap activities, the Registrant disclose in the
Statement of Additional Information the Fund's segregation
activities in the event the Fund is a buyer or seller of credit
default swaps. The Staff requested that the Registrant confirm
that, if the Fund sells credit default swaps, the Fund's
segregation cover will be based on the notional value of the
credit default swap contract.
RESPONSE: The Registrant notes that it will add a statement that "to the
extent the Fund sells or writes credit default swaps, the Fund
segregates liquid assets at least equal to the full notional
value of such credit default swaps" to address the Staff's
comment. However, the Registrant reserves the right to modify
this approach in the future, including with respect to
index-based credit default swaps, which are cash-settled, based
on then-current market practice and applicable SEC Staff
guidance.
10. The Staff noted that the Fund's concentration policy states that "except as
permitted by exemptive or other relief or permission from the SEC, SEC
Staff or other authority of
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competent jurisdiction, the Fund may not make any investment if, as a
result, the Fund's investments will be concentrated in any one industry."
a. COMMENT: The Staff noted that, while the Fund's policy addresses
concentration "in any one industry," Section 8(b) of the 1940
Act requires the policy to address concentration in a particular
industry or group of industries.
RESPONSE: The Registrant acknowledges the Staff's comment. The Registrant
notes that it believes that the Fund's policy addresses the
requirements of Section 8(b) of the 1940 Act. The Registrant
also notes that the Fund's concentration policy cannot be
changed without shareholder approval.
b. COMMENT: The Staff requested that the Registrant confirm that it will not
change the Fund's concentration policy without a requisite
shareholder vote.
RESPONSE: The Registrant confirms that it will not change the Fund's
concentration policy without a requisite shareholder vote.
11. COMMENT: The Staff requested that the Registrant confirm that it will
complete the tables in the Statement of Additional Information
that provide additional information about the Fund's portfolio
managers in the Registrant's Rule 485(b) filing with respect to
the Fund.
RESPONSE: The Registrant confirms that it will complete the tables in the
Statement of Additional Information that provide additional
information about the Fund's portfolio managers in the
Registrant's Rule 485(b) filing with respect to the Fund.
12. The Staff noted that the Registrant states in the Description of Shares
section in the Statement of Additional Information that its declaration of
trust includes two fee-shifting provisions in connection with the bringing
of derivative actions by shareholders.
a. COMMENT: The Staff requested that the Registrant indicate in its
response when such fee-shifting provisions were added to the
declaration of trust.
RESPONSE: The Registrant notes that shareholders of the Fund authorized
the amendment of the Registrant's declaration of trust in 2008
to include the fee-shifting provisions, among other changes.
b. COMMENT: The Staff requested that the Registrant indicate in its
response whether the fee shifting provisions in the declaration
of trust remain in effect following the adoption of recent
legislation limiting fee-shifting provisions under the Delaware
General Corporation Law and, if not, revise the disclosure.
RESPONSE: The Registrant notes that it is a Delaware statutory trust
established under the Delaware Statutory Trust Act, and is not a
corporation established under
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Delaware General Corporation Law. The Registrant believes that
the fee shifting provisions set forth in the declaration of
trust are permitted under the Delaware Statutory Trust Act and
remain in effect.
c. COMMENT: The Staff requested that the Registrant indicate whether such
fee-shifting provisions apply to derivative actions under the
Securities Laws and, if so, explain how such fee-shifting
provisions are consistent with Sections 36 and 44 of the 1940
Act, as well as the general principles behind Sections 1(b)(3),
47(a) and 50 of the 1940 Act.
RESPONSE: The Registrant believes that the fee-shifting provisions apply
to derivative actions under the Securities Laws. The Registrant
notes that the fee-shifting provisions take effect only if: (1)
a court determines that a demand that was rejected by a majority
of the Independent Trustees as not being in the best interests
of the Registrant was made without reasonable cause or for an
improper purpose; or (2) a court determines that a derivative
action that was dismissed by a court on the basis of failure to
comply with the derivative action provisions of the declaration
of trust was brought without reasonable cause or for an improper
purpose. The Registrant believes that the fee-shifting
provisions protect and benefit the Registrant and its
shareholders and are, therefore, consistent with the Securities
Laws, including the sections of the 1940 Act cited by the Staff.
Please call the undersigned at (617) 951-8458 or Toby Serkin at (617)
951-8760 with any questions.
Sincerely,
/s/ Jeremy Kantrowitz
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Jeremy Kantrowitz
cc: Terrence J. Cullen
Christopher J. Kelley
Roger P. Joseph
Toby R. Serkin
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