No-Action Letter: Ellsworth Fund Ltd, (November 6, 2014)

Steven B. King
Ballard Spahr LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599

In a letter dated September 26, 2014, on behalf of the Fund, you requested confirmation from the staff of the Securities and Exchange Commission (the “Commission”) that we would not recommend enforcement action to the Commission if the Fund omits from the proxy materials for its 2015 annual meeting a shareholder proposal and supporting statement (the “Proposal”) submitted by Robert H. Daniels (the “Proponent”).^[1] The Proposal provides:

You assert that the Proposal may be excluded for several reasons: (1) contrary to the requirements of Rule 14a-8(b), the Proposal was incomplete when originally made; (2) the first submission of proof of ownership by the Proponent covered a time period that did not comply with the requirements of Rule 14a-8(b); and (3) the Proponent sent the first submission of proof of ownership afterthe Fund’s deadline for submission of shareholder proposals and sent a second submission of proof of ownership almost four weeks after the deadline.

We are unable to concur in your view that the Fund may exclude the Proposal pursuant to Rule 14a-8(b). Accordingly, we do not believe that the Fund may omit the Proposal from the proxy materials for its 2015 annual meeting of shareholders.
Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning this matter, please call me at (202) 551-6795.

DIVISION OF INVESTMENT MANAGEMENT

INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS

The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent's representative.

The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary procedure.

The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to “adjudicate” the merits of an investment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly, a discretionary determination not to recommend or take Commission enforcement actions, does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court, should the management omit the proposal from the investment company's proxy material.

[1] We also received a letter from the proponent, dated October 6, 2014, and a response letter from you, on behalf of the Fund, dated October 8, 2014.

Incoming Letter

http://www.sec.gov/divisions/investment/noaction/2014/ellsworth-fund-110614-14a8.htm

Securities Exchange Act of 1934 - Rule 14a-8

Incoming Letter

Modified: 11/10/2014