RESPONSE OF THE OFFICE OF CHIEF COUNSEL DIVISION OF INVESTMENT MANAGEMENT

IM Ref. No. 2013781556 BlackRock Multi-Sector Income Trust

Your letter dated June 18, 2013 requests our assurance that we would not recommend enforcement action to the Commission under Section 8(b)(1) of the Investment Company Act of 1940 ("1940 Act") if the BlackRock Multi-Sector Income Trust (the "Trust") implements a concentration policy pursuant to which it would invest at least 25% of its total assets in the securities of issuers of mortgage-backed securities ("MBS") issued by private entities ("Private MBS") and MBS issued or guaranteed by U.S. federal agencies or government-related guarantors ("Government MBS"), as described below.¹

Facts
You state the following: the Trust is a closed-end management investment company for which BlackRock Advisors, LLC serves as investment adviser. As disclosed in the Trust’s registration statement on Form N-2 ("Registration Statement"), the Trust will, under normal market conditions, invest at least 80% of its Managed Assets (as defined in the Registration Statement) in loan and debt instruments and other investments with similar economic characteristics ("fixed-income securities"). The Trust may invest in a wide range of fixed-income securities, but will concentrate its investments in mortgage related securities. The Trust has adopted a fundamental investment policy regarding industry concentration, pursuant to which the Trust may not:

Concentrate its investments in a particular industry, as that term is used in the Investment Company Act; provided, that the Trust will invest at least 25% of its total assets in mortgage related securities, which for purposes of this investment restriction the Trust will treat as an industry or group of industries.

The Registration Statement defines mortgage-related securities to include a variety of securities that are backed by, or that provide exposure to mortgages including both Private MBS and Government MBS. The Registration Statement includes narrative disclosure accompanying the Trust’s fundamental investment restrictions that clarifies that Government MBS will not be excluded from "mortgage related securities" as such term is used in the Trust’s industry concentration policy.

Analysis
Section 8(b)(1) of the 1940 Act requires an investment company ("fund") to recite in its registration statement, among other things, whether it reserves the freedom to concentrate investments in a particular industry or group of industries. If such freedom is reserved, Section 8(b)(1) requires the fund to include a statement briefly indicating, insofar as is practicable, the extent to which the fund intends to concentrate its investments.  A fund is concentrated if it invests more than 25% of the value of its assets in any one industry. ²Section 13(a)(3) of the 1940 Act requires a fund to obtain shareholder approval to change its concentration policy.

Section 8(b)(1) permits a fund to implement a concentration policy that allows for some degree of discretion, provided that the circumstances under which the manager may exercise its discretion to change the fund’s concentration status are described, to the extent practicable, in the fund’s registration statement. To satisfy this standard, we believe that a fund must clearly and precisely describe, with as much specificity as is practicable, the circumstances under which the fund intends to concentrate its investments.³ You state that the Trust’s proposed concentration policy describes, insofar as practicable, the extent to which the Trust intends to concentrate in an industry by setting clear, objective limitations on the manager’s ability to freely concentrate in an industry or group of industries.

You state that both Government MBS and Private MBS represent interests in pools of mortgages and involve the financing of real estate and the pooling of such financings. You believe, therefore, that Government MBS and Private MBS share many of the same or substantially similar economic attributes and are subject to many of the same or substantially similar risks, including prepayment, extension, and interest rate risks. You state that with respect to these risks, issuers of Government MBS and Private MBS may be similarly impacted by developments in the housing and mortgage markets and economy generally. Therefore, you contend that it is reasonable to treat issuers of Government MBS and Private MBS as being in a particular industry or group of industries, and that the Trust’s industry concentration policy describes, insofar as practicable, the extent to which the Trust intends to concentrate its investments.

Based on the facts and circumstances set forth in your letter, we would not recommend enforcement action to the Commission under Section 8(b)(1) of the 1940 Act if the Trust implements the concentration policy described above.⁴ Any different facts and circumstances may require different conclusions.