Correspondence 0000053808-24-000020 from BNY Mellon Investment Funds III (CIK 0000053808)
BNY Mellon Investment Funds III (CIK 0000053808)
Date: May 10, 2024 · CIK: 0000053808 · Accession: 0000053808-24-000020
AI Filing Summary & Sentiment
File numbers found in text: 811-00524, 811-04813, 811-07123, 811-23014
Letter
VIA EDGAR Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attention: John F. Kernan
Re: Funds Listed in Appendix A
Dear Mr. Kernan,
On behalf of the funds listed in Appendix A hereto (each, a "Fund"), transmitted for filing as EDGAR correspondence are the Funds' responses to the comments of the accounting staff (the "Staff") of the Securities and Exchange Commission, provided by you to Shaina Maldonado by telephone on April 12, 2024. The Staff's comments related to (i) an excise tax payment mentioned in the annual report on Form N-CSR for one of the Funds, and (ii) the volume of derivatives held by each of the Funds that have exposure to derivatives.
Set forth below is a summary of the Staff's comments, and the Funds' responses thereto.
BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc. Only
1. Staff Comment:
a. Please explain the cause of the Fund's excise tax payment referenced in the "Federal income taxes" disclosure in Note 1(g) of the Notes to Financial Statements in the Fund's annual report on Form N-CSR.
b. In your response, if applicable, please discuss the effectiveness of the design and operation of internal controls surrounding the monitoring of distributable income and capital gains to satisfy Subchapter M calendar-year distribution requirements.
Response: With respect to Staff Comment 1(a), the Fund confirms that the referenced excise tax payment resulted from Fund management's deliberate decision to retain a higher level of earned income in lieu of distributing that income to the Fund's shareholders by the end of the year, which higher level of income was in turn caused by the Fund's current monthly earnings slightly exceeding its stable distribution rate of $0.035 per common share. The proposal to retain a higher level of undistributed income at the end of the year was intended to facilitate the maintenance of a stable distribution rate going forward, as such retained amounts would operate as a cushion against potential adverse market developments that might otherwise negatively impact the Fund's ability to make distributions of ordinary income equaling $0.035 per common share to its shareholders. The proposal was additionally intended to better enable the Fund to realize its investment objective of returning at least $9.835 per common share to its shareholders on or about December 1, 2024 (the Fund's termination date). The Fund notes that, while the excise tax payment associated with the Fund's decision to retain a higher level of earned income totaled approximately $162,000, had the Fund instead sought to distribute the full amount needed to avoid paying any excise tax, the total amount that the Fund would have needed to distribute by the end of 2023 would have been
approximately $4.05 million. Fund management believed that it was prudent to preserve a higher level of undistributed income at that time and recommended to the Fund's Board that the excise tax payment be approved. Fund management intends to continue to focus on balancing the distribution of income to the Fund's shareholders and the retention of limited earnings in order to seek to achieve the Fund's objective of returning at least $9.835 per common share to its shareholders on or about December 1, 2024. The Fund disclosed to shareholders in its prospectus that it may (and, in fact, intended to) retain a limited portion of its net investment income beginning with its initial distribution and continuing until the final liquidating distribution. The Fund also disclosed in its prospectus that it may retain a portion of its short-term gains and all or a portion of its long-term gains in connection with pursuing this investment objective.
With respect to Staff Comment 1(b), Fund management confirms that it has procedures and controls in place to monitor the Fund's compliance with all distributable income- and capital gains-related requirements set forth in Subchapter M of the Internal Revenue Code of 1986, as amended, and further that Fund management believes the design and operation of such procedures and controls are both effective and sufficient to ensure compliance with the Subchapter M requirements. Fund management notes in particular that, when assessing the merits of the aforementioned proposal to retain a higher level of earned income at the end of 2023 and pay the associated excise tax in order to provide a cushion for the Fund against potential adverse market developments, one of the factors that the Board of Directors and Fund management both considered was that neither the level of earned income retained nor the payment of the associated excise tax would implicate or otherwise endanger the Fund's ability to maintain its status as a regulated investment company for federal tax purposes. Consistent with this, Fund management confirms that, notwithstanding the payment of the excise tax described above, the Fund did in fact satisfy its year-end Subchapter M distribution requirements for 2023.
All Funds
2. Staff Comment: Please consider enhancing average derivative volumes disclosure included in the Notes to Financial Statements for Funds holding derivative instruments to provide additional information, such as the breakdown of long versus short futures and protection purchased versus sold, that would enable users of the financial statements to better understand the volume of derivatives activity.
Response: Going forward, to the extent a Fund experiences derivatives exposure during the period covered in its respective annual or semi-annual shareholder reports on Form N-CSR, as applicable, that Fund will consider including in its shareholder report a tabular summary of the average monthly volume of derivatives traded, broken down by the type of derivative financial instrument(s) held by that Fund during the reporting period.
* * * * *
Should you have any questions or comments, please feel free to contact the undersigned at 212.969.3357 (dstephens@proskauer.com).
Very truly yours,
/s/ David Stephens
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Proskauer Rose LLP Eleven Times Square New York, NY 10036-8299
May 10, 2024
VIA EDGAR
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention: John F. Kernan
Re: Funds Listed in Appendix A
Dear Mr. Kernan,
On behalf of the funds listed in Appendix A
hereto (each, a "Fund"), transmitted for filing as EDGAR correspondence are the Funds' responses to the comments of the
accounting staff (the "Staff") of the Securities and Exchange Commission, provided by you to Shaina Maldonado by telephone
on April 12, 2024. The Staff's comments related to (i) an excise tax payment mentioned in the annual report on Form N-CSR for one of the
Funds, and (ii) the volume of derivatives held by each of the Funds that have exposure to derivatives.
Set forth below is a summary of the Staff's
comments, and the Funds' responses thereto.
BNY Mellon Alcentra Global Credit Income
2024 Target Term Fund, Inc. Only
1. Staff Comment:
a. Please explain the cause of the Fund's excise tax payment referenced in the "Federal income taxes"
disclosure in Note 1(g) of the Notes to Financial Statements in the Fund's annual report on Form N-CSR.
b. In your response, if applicable, please discuss the effectiveness of the design and operation of internal
controls surrounding the monitoring of distributable income and capital gains to satisfy Subchapter M calendar-year distribution requirements.
Response: With
respect to Staff Comment 1(a), the Fund confirms that the referenced excise tax payment resulted from Fund management's deliberate decision
to retain a higher level of earned income in lieu of distributing that income to the Fund's shareholders by the end of the year, which
higher level of income was in turn caused by the Fund's current monthly earnings slightly exceeding its stable distribution rate of $0.035
per common share. The proposal to retain a higher level of undistributed income at the end of the year was intended to facilitate the
maintenance of a stable distribution rate going forward, as such retained amounts would operate as a cushion against potential adverse
market developments that might otherwise negatively impact the Fund's ability to make distributions of ordinary income equaling $0.035
per common share to its shareholders. The proposal was additionally intended to better enable the Fund to realize its investment objective
of returning at least $9.835 per common share to its shareholders on or about December 1, 2024 (the Fund's termination date). The Fund
notes that, while the excise tax payment associated with the Fund's decision to retain a higher level of earned income totaled approximately
$162,000, had the Fund instead sought to distribute the full amount needed to avoid paying any excise tax, the total amount that the Fund
would have needed to distribute by the end of 2023 would have been
approximately $4.05 million. Fund management
believed that it was prudent to preserve a higher level of undistributed income at that time and recommended to the Fund's Board that
the excise tax payment be approved. Fund management intends to continue to focus on balancing the distribution of income to the Fund's
shareholders and the retention of limited earnings in order to seek to achieve the Fund's objective of returning at least $9.835 per common
share to its shareholders on or about December 1, 2024. The Fund disclosed to shareholders in its prospectus that it may (and, in fact,
intended to) retain a limited portion of its net investment income beginning with its initial distribution and continuing until the final
liquidating distribution. The Fund also disclosed in its prospectus that it may retain a portion of its short-term gains and all or a
portion of its long-term gains in connection with pursuing this investment objective.
With respect to Staff
Comment 1(b), Fund management confirms that it has procedures and controls in place to monitor the Fund's compliance with all distributable
income- and capital gains-related requirements set forth in Subchapter M of the Internal Revenue Code of 1986, as amended, and further
that Fund management believes the design and operation of such procedures and controls are both effective and sufficient to ensure compliance
with the Subchapter M requirements. Fund management notes in particular that, when assessing the merits of the aforementioned proposal
to retain a higher level of earned income at the end of 2023 and pay the associated excise tax in order to provide a cushion for the Fund
against potential adverse market developments, one of the factors that the Board of Directors and Fund management both considered was
that neither the level of earned income retained nor the payment of the associated excise tax would implicate or otherwise endanger the
Fund's ability to maintain its status as a regulated investment company for federal tax purposes. Consistent with this, Fund management
confirms that, notwithstanding the payment of the excise tax described above, the Fund did in fact satisfy its year-end Subchapter M distribution
requirements for 2023.
All Funds
2. Staff Comment: Please consider enhancing average derivative volumes disclosure included in the
Notes to Financial Statements for Funds holding derivative instruments to provide additional information, such as the breakdown of long
versus short futures and protection purchased versus sold, that would enable users of the financial statements to better understand the
volume of derivatives activity.
Response: Going
forward, to the extent a Fund experiences derivatives exposure during the period covered in its respective annual or semi-annual shareholder
reports on Form N-CSR, as applicable, that Fund will consider including in its shareholder report a tabular summary of the average monthly
volume of derivatives traded, broken down by the type of derivative financial instrument(s) held by that Fund during the reporting period.
* * * * *
Should you have any questions or comments,
please feel free to contact the undersigned at 212.969.3357 (dstephens@proskauer.com).
Very truly yours,
/s/ David Stephens
David Stephens
2
cc: James Windels
Robert Svagna
Sarah Kelleher
Amanda Quinn
3
APPENDIX
A
CIK
File #
Registrant Name
Series ID
Series Name
0000053808
811-00524
BNY Mellon Investment Funds III
S000005159
BNY Mellon International Bond Fund
0000799295
811-04813
BNY Mellon Investment Funds I
S000011511
BNY Mellon International Equity Fund
0000053808
811-00524
BNY Mellon Investment Funds III
S000018029
BNY Mellon Global Equity Income Fund
0000799295
811-04813
BNY Mellon Investment Funds I
S000011516
BNY Mellon Small Cap Value Fund
0000799295
811-04813
BNY Mellon Investment Funds I
S000011499
BNY Mellon Small/Mid Cap Growth Fund
0000914775
811-07123
BNY Mellon Advantage Funds, Inc.
S000028808
BNY Mellon Global Real Return Fund
0000914775
811-07123
BNY Mellon Advantage Funds, Inc.
S000011967
BNY Mellon Dynamic Total Return Fund
0000799295
811-04813
BNY Mellon Investment Funds I
S000011515
BNY Mellon Small Cap Growth Fund
0000914775
811-07123
BNY Mellon Advantage Funds, Inc.
S000031204
BNY Mellon Global Dynamic Bond Income Fund
0001627854
811-23014
BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc.
CEF0010855
BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc.