SEC Company Response from CREDIT SUISSE TRUST (CIK 0000941568) — Feb 25, 2020
CREDIT SUISSE TRUST (CIK 0000941568)
Date: Feb. 25, 2020 · CIK: 0000941568 · Accession: 0001104659-20-024953
AI Filing Summary & Sentiment
File numbers found in text: 811-07261
Letter
Via Edgar Securities and Exchange Commission Division of Investment Management Attention: Kim Browning Securities Act File No. 33-58125 Investment Company Act File No. 811-07261
Re: Credit Suisse Trust (the “Registrant”)
Dear Ms. Browning:
This letter responds to comments provided by the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the “SEC”) to the undersigned and Elliot J. Gluck on February 12-13, 2020 regarding Post-Effective Amendment No. 52 to the Registrant’s Registration Statement on Form N-1A under the Securities Act of 1933, as amended, and Amendment No. 53 to the Registrant’s Registration Statement under the Investment Company Act of 1940, as amended (the “Amendment”). The Amendment contains the prospectus and statement of additional information (“SAI”) for the Credit Suisse Commodity Return Strategy Portfolio (the “Portfolio”).
For your convenience, the substance of the Staff’s comments has been restated below to the best of the Registrant’s understanding in italicized text. The Registrant’s responses to each comment are set out immediately under the restated comment. A Post-Effective Amendment to the Registration Statement, which reflects changes made in response to the Staff’s comments, along with changes made to update certain other information in the Registration Statement will be filed separately. Defined terms, unless otherwise defined herein, have the meanings given them in the Amendment.
I. General
Comment 1: Please file your responses to the Staff’s comments as correspondence with the SEC via EDGAR at least 5 business days prior to the effective date of the Registration Statement to give the Staff adequate time to review the responses. Please confirm that all excluded and bracketed language (i.e., the performance bar chart, the average annual total returns table and the financial highlights table) will be updated 5 days prior to effectiveness to allow the Staff time to review it.
New York Washington Houston Palo Alto San Francisco Paris London Frankfurt Brussels Milan Rome
Kim Browning
February 25, 2020
Page 2
Response 1: The Registrant will seek to respond to the Staff’s comments at least five business days prior to the effective date of the Amendment. A completed fee table, expense example, performance bar chart and table and financial highlights table are attached hereto as Exhibit A. The Registrant will update all information that was excluded or in brackets in the next Post-Effective Amendment to be filed.
II. Prospectus
Comment 2: In the subsection entitled “Portfolio Summary – Fees and Portfolio Expenses,” please include disclosure that the table does not reflect the withdrawal charges incurred from investing through a variable annuity or life insurance contract. Please include similar disclosure in the subsection entitled “Portfolio Summary – Example.”
Response 2: The requested disclosure has been added.
Comment 3: In the subsection entitled “Portfolio Summary – Fees and Portfolio Expenses,” please confirm that the fee and expense table reflects expenses incurred by the Portfolio for dividends from short sales, if any.
Response 3: The Registrant confirms that there were no expenses incurred by the Portfolio for dividends from short sales.
Comment 4: Please confirm supplementally that (a) the management fee of the Subsidiary, if any, will be included in “Management Fees,” and the expenses of the Subsidiary will be included in “Other Expenses” in the Portfolio’s fee table; (b) the Subsidiary and its board of directors will agree to designate agents for service of process in the United States; and (c) the Subsidiary and its board of directors will agree to inspection by the Staff of the books and records of the Subsidiary, which will be maintained in accordance with Section 31 of the 1940 Act and the rules thereunder.
Response 4: The Registrant confirms each of the above-listed items.
Comment 5: Footnote 2 in the subsection entitled “Portfolio Summary – Fees and Portfolio Expenses” states that Other Expenses are estimated. Please confirm if there is an expense component that is unique to the Class 2 shares and why the expenses are not based on actual fund expenses.
Response 5: Other Expenses are based on actual expenses for the Portfolio with respect to Class 1 shares. Footnote 2 has been deleted.
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Kim Browning
February 25, 2020
Page 3
Comment 6: In the subsection entitled “Portfolio Summary – Fees and Portfolio Expenses,” footnote 3 to the fee table states that “any reimbursements must be paid at a date not more than three years after the end of the fiscal year during which such fees were limited or expenses were paid by Credit Suisse and the reimbursements do not cause a class to exceed the expense limitation in the contract at the time the fees were limited or expenses were paid.” Please confirm that the Registrant conducted a FAS 5 analysis and concluded that recoupment of waived fees and/or reimbursed expenses under the Portfolio’s expense limitation agreement is not probable. Please also confirm that the FAS 5 analysis was provided to the Portfolio’s auditors. Alternatively, please revise the above-referenced footnote to state that any recoupment must be paid at a date not more than three years after the date of the waiver/reimbursement provided that the recoupment does not cause a class to exceed either (i) the applicable expense limitation in the expense limitation agreement at the time the fees were waived or expenses reimbursed or (ii) the applicable expense limitation at the time of such recoupment.
Response 6: The Registrant notes that its Form N-CSR to be filed with the SEC in March, 2020 will contain the following disclosure regarding Credit Suisse’s ability to recoup waived fees and reimbursed expenses:
“The Portfolio is authorized to reimburse Credit Suisse for management fees previously limited and/or for expenses previously reimbursed by Credit Suisse, provided, however, that any reimbursements must be paid at a date not more than thirty-six months following the applicable month during which such fees were limited or expenses were reimbursed by Credit Suisse and the reimbursements do not cause the Portfolio to exceed the applicable expense limitation in the contract at the time the fees are recouped.”
The Registrant further notes that Credit Suisse’s ability to recoup waived fees and reimbursed expenses is consistent with such disclosure. In addition, the Registrant will seek to amend the Portfolio’s expense limitation agreement to provide that any recoupment of fees waived or expenses reimbursed by Credit Suisse will not be made more than three years after the date of the waiver or reimbursement and will not cause a class to exceed either (i) the applicable expense limitation in the agreement at the time the fees were waived or expenses reimbursed or (ii) the applicable expense limitation at the time of such recoupment. Following such amendment, the Registrant intends to update the above referenced footnote to state as follows (additions bolded and underlined; deletions in strikethrough text):
Credit Suisse Trust (the “Trust”) and Credit Suisse Asset Management, LLC (“Credit Suisse”) have entered into a written contract limiting operating expenses to 0.80% of the portfolio’s average daily net assets for Class 2 at least through May 1, 2021. This limit excludes certain expenses, including interest charges on fund borrowings, taxes, brokerage commissions, dealer spreads and other transaction charges, expenditures that are capitalized in accordance with generally accepted accounting principles, acquired fund fees and expenses, short sale dividends, and extraordinary expenses (e.g., litigation and indemnification and any other costs and expenses that may be approved by the Trust’s board of trustees (the “Board of Trustees”)). The Trust is authorized to reimburse Credit Suisse for management fees previously limited and/or for expenses previously paid by Credit Suisse, provided, however, that any reimbursements must be paid at a date not more than three years after the end of the fiscal year during date on which such fees were limited or expenses were paid by Credit Suisse and the reimbursements do not cause the portfolio to exceed the expense limitation in the contract that was in effect either at the time (i) the fees were limited or expenses were paid or (ii) of such reimbursement. This contract may not be terminated before May 1, 2021.
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Kim Browning
February 25, 2020
Page
Comment 7: In footnote 3 of the fee table under the subsection entitled “Portfolio Summary – Fees and Portfolio Expenses,” please disclose who can terminate the expense limitation agreement and under what circumstances (see Instruction 3(e) to Item 3 of Form N-1A).
Response 7: The above-referenced footnote is based on the Portfolio’s current expense limitation agreement, which does not include an explicit right of termination for either party. Accordingly, the Registrant submits that the above-referenced disclosure is accurate and consistent with the requirement of Instruction 3(e) to Item 3 of Form N-1A.
Comment 8: The Portfolio currently includes “Portfolio Turnover Risk” as a principal risk. Please incorporate disclosure in the subsection entitled “Portfolio Summary – Principal Investment Strategies” stating that the Portfolio engages in active and frequent trading.
Response 8: As the Fund has another class of shares with an effective prospectus, the Registrant intends to add the requested disclosure in the Portfolio’s annual update.
Comment 9: Please confirm that all principal investment strategies of the Portfolio are contained in the section required by Item 4 of Form N-1A and revise and/or enhance any disclosure as necessary.
Response 9: The Registrant confirms that all principal investment strategies of the Portfolio are contained in the section of the Prospectus required by Item 4 of Form N-1A.
Comment 10: The Portfolio’s performance was previously compared to the Dow Jones-UBS Commodity Index Total Return. Currently, the Portfolio’s performance is compared to the Bloomberg Commodity Index Total Return. Please discuss why a post-effective amendment pursuant to Rule 485(a) under the Securities Act of 1933 was not filed with respect to such change.
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Kim Browning
February 25, 2020
Page 5
Response 10: The Registrant does not consider a change in a benchmark index against which a fund measures its performance to be a material change necessitating a filing pursuant to Rule 485(a).
Comment 11: In the subsection entitled “Portfolio Summary – Principal Investment Strategies,” please confirm if the Portfolio intends to invest directly or indirectly in commodity-linked instruments.
Response 11: As set out in the above-referenced section, the Portfolio intends to invest both directly and indirectly in commodity-linked instruments.
Comment 12: Please confirm whether the Portfolio intends to invest in variable and floating rate securities as part of its principal investment strategies.
Response 12: The Portfolio does not intend to invest in variable and floating rate securities as part of its principal investment strategies.
Comment 13: In light of the July 30, 2010 letter from Barry Miller, Associate Director of the Commission’s Office of Legal and Disclosure, to the Investment Company Institute, the Registrant should review its derivative disclosure to assess the accuracy and completeness of the disclosure, including whether the disclosure is presented in an understandable manner using plain English, to ensure that the disclosure related to derivatives is tailored specifically to how the Registrant expects to be managed and should address those strategies that the Registrant expects to be the most important means of achieving its objectives and that it anticipates will have a significant effect on its performance. Additionally, the disclosure concerning the principal risks of the Registrant should similarly be tailored to the types of derivatives used by the Registrant, the extent of their use, and the purpose for using derivative transactions. Generic disclosure, either brief or overly detailed should be avoided.
Response 13: The Registrant has reviewed the disclosure contained in the prospectus regarding its proposed use of derivative instruments and the related risks and believes that such disclosure is accurate and complete and presented in an understandable manner.
Comment 14: The subsection entitled “Portfolio Summary – Principal Investment Strategies” states that the Portfolio “gains exposure to commodities markets by investing through the Subsidiary and in structured notes linked to the BCOM Index, other commodity indices, or the value of a particular commodity….” Please confirm if other commodity indices have been selected, and if so, please disclose. Please confirm if the Portfolio is investing in structured notes linked to other commodity indices, not just the BCOM Index.
Response 14: The Registrant submits that the above-referenced disclosure of “other commodity indices” is intended to indicate that the Portfolio may invest in structured notes, from time to time, linked to indices other than the BCOM Index. As of the date of the Portfolio’s most recent shareholder report, the Portfolio was not invested in structured notes linked to commodity indices.
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Kim Browning
February 25, 2020
Page 6
Comment 15: Please confirm if the Portfolio will investment in non-U.S. government securities as a principal investment.
Response 15: The Portfolio does not currently intend to invest in non-U.S. government securities as a principal investment.
Comment 16: In the subsection entitled “Portfolio Summary – Principal Investment Strategies,” please disclose all countries and regions in which the Portfolio invests.
Response 16: As the principal investment strategies of the Portfolio contemplate investment in commodity-linked instruments and fixed-income securities, the Portfolio’s principal investment strategies do not focus on investment in specific countries or regions.
Comment 17: If the transition from LIBOR is a principal risk, please add appropriate risk disclosure.
Response 17: The transition from LIBOR is not a principal risk of the Portfolio.
Comment 18: In
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CORRESP
1
filename1.htm
February
25, 2020
Via Edgar
Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549
Attention: Kim Browning
Re:
Credit Suisse Trust (the “Registrant”)
Securities Act File No. 33-58125
Investment Company Act File No. 811-07261
Dear Ms. Browning:
This letter responds to comments provided
by the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the
“SEC”) to the undersigned and Elliot J. Gluck on February 12-13, 2020 regarding Post-Effective Amendment No. 52 to
the Registrant’s Registration Statement on Form N-1A under the Securities Act of 1933, as amended, and Amendment No. 53 to
the Registrant’s Registration Statement under the Investment Company Act of 1940, as amended (the “Amendment”).
The Amendment contains the prospectus and statement of additional information (“SAI”) for the Credit Suisse Commodity
Return Strategy Portfolio (the “Portfolio”).
For
your convenience, the substance of the Staff’s comments has been restated below to the best of the Registrant’s understanding
in italicized text. The Registrant’s responses to each comment are set out immediately under the restated comment. A
Post-Effective Amendment to the Registration Statement, which reflects changes made in response to the Staff’s comments,
along with changes made to update certain other information in the Registration Statement will be filed separately. Defined terms,
unless otherwise defined herein, have the meanings given them in the Amendment.
I. General
Comment 1: Please
file your responses to the Staff’s comments as correspondence with the SEC via
EDGAR at least 5 business days prior to the effective date of the Registration Statement
to give the Staff adequate time to review the responses. Please confirm that all excluded
and bracketed language (i.e., the performance bar chart, the average annual total returns
table and the financial highlights table) will be updated 5 days prior to effectiveness
to allow the Staff time to review it.
New York Washington Houston Palo Alto San Francisco Paris London Frankfurt Brussels Milan Rome
Kim Browning
February 25, 2020
Page 2
Response 1: The
Registrant will seek to respond to the Staff’s comments at least five business days prior to the effective date of the Amendment.
A completed fee table, expense example, performance bar chart and table and financial highlights table are attached hereto as
Exhibit A. The Registrant will update all information that was excluded or in brackets in the next Post-Effective Amendment
to be filed.
II. Prospectus
Comment
2: In the subsection entitled “Portfolio Summary
– Fees and Portfolio Expenses,” please include disclosure that the table does not reflect the withdrawal charges incurred
from investing through a variable annuity or life insurance contract. Please include similar disclosure in the subsection entitled
“Portfolio Summary – Example.”
Response
2: The requested disclosure has been added.
Comment
3: In the subsection entitled “Portfolio Summary
– Fees and Portfolio Expenses,” please confirm that the fee and expense table reflects expenses incurred by the Portfolio
for dividends from short sales, if any.
Response
3: The Registrant confirms that there were no expenses incurred
by the Portfolio for dividends from short sales.
Comment
4: Please confirm supplementally that (a) the management
fee of the Subsidiary, if any, will be included in “Management Fees,” and the expenses of the Subsidiary will be included
in “Other Expenses” in the Portfolio’s fee table; (b) the Subsidiary and its board of directors will agree to
designate agents for service of process in the United States; and (c) the Subsidiary and its board of directors will agree to
inspection by the Staff of the books and records of the Subsidiary, which will be maintained in accordance with Section 31 of
the 1940 Act and the rules thereunder.
Response
4: The Registrant confirms each of the above-listed items.
Comment
5: Footnote 2 in the subsection entitled “Portfolio
Summary – Fees and Portfolio Expenses” states that Other Expenses are estimated. Please confirm if there is an expense
component that is unique to the Class 2 shares and why the expenses are not based on actual fund expenses.
Response
5: Other Expenses are based on actual expenses for the Portfolio
with respect to Class 1 shares. Footnote 2 has been deleted.
- 2
-
Kim Browning
February 25, 2020
Page 3
Comment
6: In the subsection entitled “Portfolio Summary
– Fees and Portfolio Expenses,” footnote 3 to the fee table states that “any reimbursements must be paid at
a date not more than three years after the end of the fiscal year during which such fees were limited or expenses were paid by
Credit Suisse and the reimbursements do not cause a class to exceed the expense limitation in the contract at the time the fees
were limited or expenses were paid.” Please confirm that the Registrant conducted a FAS 5 analysis and concluded that recoupment
of waived fees and/or reimbursed expenses under the Portfolio’s expense limitation agreement is not probable. Please also
confirm that the FAS 5 analysis was provided to the Portfolio’s auditors. Alternatively, please revise the above-referenced
footnote to state that any recoupment must be paid at a date not more than three years after the date of the waiver/reimbursement
provided that the recoupment does not cause a class to exceed either (i) the applicable expense limitation in the expense limitation
agreement at the time the fees were waived or expenses reimbursed or (ii) the applicable expense limitation at the time of such
recoupment.
Response
6: The Registrant notes that its Form N-CSR to be filed
with the SEC in March, 2020 will contain the following disclosure regarding Credit Suisse’s ability to recoup waived fees
and reimbursed expenses:
“The
Portfolio is authorized to reimburse Credit Suisse for management fees previously limited and/or for expenses previously reimbursed
by Credit Suisse, provided, however, that any reimbursements must be paid at a date not more than thirty-six months following
the applicable month during which such fees were limited or expenses were reimbursed by Credit Suisse
and the reimbursements do not cause the Portfolio to exceed the applicable expense limitation in the contract at the time the
fees are recouped.”
The Registrant further notes that Credit Suisse’s ability to recoup waived
fees and reimbursed expenses is consistent with such disclosure. In addition, the Registrant will seek to amend the
Portfolio’s expense limitation agreement to provide that any recoupment of fees waived or expenses reimbursed by Credit
Suisse will not be made more than three years after the date of the waiver or reimbursement and will not cause a class to
exceed either (i) the applicable expense limitation in the agreement at the time the fees were waived or expenses reimbursed
or (ii) the applicable expense limitation at the time of such recoupment. Following such amendment, the Registrant intends to
update the above referenced footnote to state as follows (additions bolded and underlined; deletions in strikethrough
text):
Credit Suisse Trust (the “Trust”) and Credit Suisse Asset Management, LLC (“Credit Suisse”) have entered
into a written contract limiting operating expenses to 0.80% of the portfolio’s average daily net assets for Class 2
at least through May 1, 2021. This limit excludes certain expenses, including interest charges on fund borrowings, taxes, brokerage
commissions, dealer spreads and other transaction charges, expenditures that are capitalized in accordance with generally accepted
accounting principles, acquired fund fees and expenses, short sale dividends, and extraordinary expenses (e.g., litigation and
indemnification and any other costs and expenses that may be approved by the Trust’s board of trustees (the “Board
of Trustees”)). The Trust is authorized to reimburse Credit Suisse for management fees previously limited and/or for expenses
previously paid by Credit Suisse, provided, however, that any reimbursements must be paid at a date not more than three years
after the end of the fiscal year during date on which such fees were limited or expenses were paid
by Credit Suisse and the reimbursements do not cause the portfolio to exceed the expense limitation in the contract that
was in effect either at the time (i) the fees were limited or expenses were paid or (ii) of such reimbursement.
This contract may not be terminated before May 1, 2021.
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Kim Browning
February 25, 2020
Page
4
Comment
7: In footnote 3 of the fee table under the subsection
entitled “Portfolio Summary – Fees and Portfolio Expenses,” please disclose who can terminate the expense limitation
agreement and under what circumstances (see Instruction 3(e) to Item 3 of Form N-1A).
Response
7: The above-referenced footnote is based on the Portfolio’s
current expense limitation agreement, which does not include an explicit right of termination for either party. Accordingly, the
Registrant submits that the above-referenced disclosure is accurate and consistent with the requirement of Instruction 3(e) to
Item 3 of Form N-1A.
Comment
8: The Portfolio currently includes “Portfolio
Turnover Risk” as a principal risk. Please incorporate disclosure in the subsection entitled “Portfolio Summary –
Principal Investment Strategies” stating that the Portfolio engages in active and frequent trading.
Response
8: As the Fund has another class of shares with an effective
prospectus, the Registrant intends to add the requested disclosure in the Portfolio’s annual update.
Comment
9: Please confirm that all principal investment strategies
of the Portfolio are contained in the section required by Item 4 of Form N-1A and revise and/or enhance any disclosure as necessary.
Response
9: The Registrant confirms that all principal investment
strategies of the Portfolio are contained in the section of the Prospectus required by Item 4 of Form N-1A.
Comment
10: The Portfolio’s performance was previously compared
to the Dow Jones-UBS Commodity Index Total Return. Currently, the Portfolio’s performance is compared to the Bloomberg Commodity
Index Total Return. Please discuss why a post-effective amendment pursuant to Rule 485(a) under the Securities Act of 1933 was
not filed with respect to such change.
- 4
-
Kim Browning
February 25, 2020
Page 5
Response
10: The Registrant does not consider a change in a benchmark
index against which a fund measures its performance to be a material change necessitating a filing pursuant to Rule 485(a).
Comment
11: In the subsection entitled “Portfolio Summary
– Principal Investment Strategies,” please confirm if the Portfolio intends to invest directly or indirectly in commodity-linked
instruments.
Response
11: As set out in the above-referenced section, the Portfolio
intends to invest both directly and indirectly in commodity-linked instruments.
Comment
12: Please confirm whether the Portfolio intends to invest
in variable and floating rate securities as part of its principal investment strategies.
Response
12: The Portfolio does not intend to invest in variable and
floating rate securities as part of its principal investment strategies.
Comment
13: In light of the July 30, 2010 letter from Barry Miller,
Associate Director of the Commission’s Office of Legal and Disclosure, to the Investment Company Institute, the Registrant
should review its derivative disclosure to assess the accuracy and completeness of the disclosure, including whether the disclosure
is presented in an understandable manner using plain English, to ensure that the disclosure related to derivatives is tailored
specifically to how the Registrant expects to be managed and should address those strategies that the Registrant expects to be
the most important means of achieving its objectives and that it anticipates will have a significant effect on its performance.
Additionally, the disclosure concerning the principal risks of the Registrant should similarly be tailored to the types of derivatives
used by the Registrant, the extent of their use, and the purpose for using derivative transactions. Generic disclosure, either
brief or overly detailed should be avoided.
Response
13: The Registrant has reviewed the disclosure contained
in the prospectus regarding its proposed use of derivative instruments and the related risks and believes that such disclosure
is accurate and complete and presented in an understandable manner.
Comment
14: The subsection entitled “Portfolio Summary –
Principal Investment Strategies” states that the Portfolio “gains exposure to commodities markets by investing through
the Subsidiary and in structured notes linked to the BCOM Index, other commodity indices, or the value of a particular commodity….”
Please confirm if other commodity indices have been selected, and if so, please disclose. Please confirm if the Portfolio is investing
in structured notes linked to other commodity indices, not just the BCOM Index.
Response
14: The Registrant submits that the above-referenced disclosure
of “other commodity indices” is intended to indicate that the Portfolio may invest in structured notes, from time
to time, linked to indices other than the BCOM Index. As of the date of the Portfolio’s most recent shareholder report,
the Portfolio was not invested in structured notes linked to commodity indices.
- 5
-
Kim Browning
February 25, 2020
Page 6
Comment
15: Please confirm if the Portfolio will investment in
non-U.S. government securities as a principal investment.
Response
15: The Portfolio does not currently intend to invest in
non-U.S. government securities as a principal investment.
Comment
16: In the subsection entitled “Portfolio Summary
– Principal Investment Strategies,” please disclose all countries and regions in which the Portfolio invests.
Response
16: As the principal investment strategies of the Portfolio
contemplate investment in commodity-linked instruments and fixed-income securities, the Portfolio’s principal investment
strategies do not focus on investment in specific countries or regions.
Comment
17: If the transition from LIBOR is a principal risk,
please add appropriate risk disclosure.
Response
17: The transition from LIBOR is not a principal risk of
the Portfolio.
Comment
18: In