80 FR 23064 - D-W Investments LLC; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 79 (April 24, 2015)

Page Range		23064-23065
FR Document		2015-09556

The Applicant requests that the Commission issue an order declaring the Applicant to be a person not within the intent of section 202(a)(11), which defines the term ``investment adviser.''

Federal Register, Volume 80 Issue 79 (Friday, April 24, 2015)

[Federal Register Volume 80, Number 79 (Friday, April 24, 2015)]
[Notices]
[Pages 23064-23065]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-09556]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IA-4066; File No. 803-00226]

D-W Investments LLC; Notice of Application

April 20, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of Application for Exemption under the Investment
Advisers Act of 1940 (``Advisers Act'').

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Applicant: D-W Investments LLC (the ``Applicant'').
Relevant Advisers Act Sections: Exemption requested under section
202(a)(11)(H) of the Advisers Act from section 202(a)(11) of the
Advisers Act.
SUMMARY: The Applicant requests that the Commission issue an order
declaring the Applicant to be a person not within the intent of section
202(a)(11), which defines the term ``investment adviser.''

DATES: Filing Dates: The application was filed on August 7, 2014,
amended on January 26, 2015, and further amended on March 30, 2015.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving the Applicant with a copy of the request,
personally or by mail. Hearing requests should be received by the
Commission by 5:30 p.m. on May 18, 2015 and should be accompanied by
proof of service on the Applicant, in the form of an affidavit or, for
lawyers, a certificate of service. Pursuant to rule 0-5 under the
Advisers Act, hearing requests should state the nature of the writer's
interest, any facts bearing upon the desirability of a hearing on the
matter, the reason for the request, and the issues contested. Persons
may request notification of a hearing by writing to the Commission's
Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549. Applicant, D-W Investments LLC, c/o Martin
E. Lybecker, Perkins Coie LLP, Suite 600, 700 Thirteenth Street NW.,
Washington, DC 20005.

FOR FURTHER INFORMATION CONTACT: Rachel Loko, Senior Counsel, at (202)
551-6883, or Holly L. Hunter-Ceci, Branch Chief, at (202) 551-6825
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site either at http://www.sec.gov/rules/iareleases.shtml or by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicant's Representations

1. The Applicant is a multi-generational single-family office that
provides services to the family and descendants of Myron A.Wick, Jr.
The Applicant is a Delaware limited liability company that is wholly-
owned, other than the exception discussed in representation 5 below, by
Family Clients and is exclusively controlled (directly or indirectly)
by one or more Family Members and/or Family Entities in compliance with
rule 202(a)(11)(G)-1 (``Family Office Rule''). For purposes of the
application, the term ``Wick Family'' means the lineal descendants of
Myron A. Wick, Jr., their spouses, and all of the persons and entities
that qualify as Family Clients as defined in paragraph (d)(4) of the
Family Office Rule. Capitalized terms have the same meaning as defined
in the Family Office Rule.
2. The Applicant provides both advisory and non-advisory services
(collectively, the ``Services''). Any Service provided by the Applicant
that relates to investment advice about securities or may otherwise be
construed as advisory in nature is considered an ``Advisory Service.''
3. The Applicant represents that, other than the exceptions
discussed in representations 4 and 5 below, (i) each of the persons
served by the Applicant is a Family Client, i.e., the Applicant has no
clients other than Family Clients as required by paragraph (b)(1) of
the Family Office Rule, (ii) the Applicant is a Delaware limited
liability company owned and controlled in a manner that complies in all
respects with paragraph (b)(2) of the Family Office Rule, and (iii) the
Applicant does not hold itself out to the public as an investment
adviser as required by paragraph (b)(3) of the Family Office Rule. At
the time of the application, the Applicant represents that Family
Members account for more than 95% of the natural persons to whom the
Applicant provides Advisory Services.
4. The Applicant provides Services to the sister of the spouse of a
lineal descendant of Myron A. Wick, Jr. (``Sister-in-Law''), as well as
an irrevocable trust (``Trust'') of which she is a beneficiary (the
Sister-in-Law and the Trust, collectively, the ``Additional Family
Client'' and, together with the Wick Family, the ``Extended Wick
Family''). The Applicant represents that if the Sister-in-Law were a
Family Client, the Trust would meet the requirements of (d)(4)(vii) of
the Family Office Rule.
5. The Sister-in-Law has less than a 3% limited liability company
membership interest in the Applicant, and the Trust has less than a 2%
limited liability company membership interest in the Applicant. Neither
the Sister-in-Law nor the Trust has a management role or exercises
control over the Applicant. The Applicant represents that the assets
owned beneficially by Family Members and/or Family Entities (excluding
the Additional Family Client) make up at least 75% of the total assets
for which the Applicant provides Advisory Services.
6. The Applicant represents that the Additional Family Client has
important familial ties to and is an integral part of the Wick Family.
The Applicant maintains that including the Additional Family Client in
the ``family'' simply recognizes and memorializes the familial ties and
intra-familial relationships that already exist, and have existed for
at least 9 years while the assets of the Additional Family Client were
managed by the Wick Family.

Applicant's Legal Analysis

1. Section 202(a)(11) of the Advisers Act defines the term
``investment adviser'' to mean ``any person who, for compensation,
engages in the business of advising others, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or
who, for compensation and as a part of a regular business, issues or
promulgates analyses or reports concerning securities. . . .''
2. The Applicant falls within the definition of an investment
adviser under section 202(a)(11). The Family Office provides an
exclusion from the definition of investment adviser for which the
Applicant would be eligible but for the provision of services to the
Additional Family Client. Section 203(a) of the Advisers Act requires
investment advisers to register with the

[[Page 23065]]

Commission. Because the Applicant has regulatory assets under
management of more than $100 million, it is not prohibited from
registering with the Commission under Section 203A(a) of the Advisers
Act. Therefore, absent relief, the Applicant would be required to
register under Section 203(a) of the Advisers Act.
3. The Applicant submits that its relationship with the Additional
Family Client does not change the nature of the Applicant into that of
a commercial advisory firm. In support of this argument, the Applicant
notes that if the Sister-in-Law were the sister of a lineal descendant
of Myron A. Wick Jr., rather than the sister of a spouse of a lineal
descendant, there would be no question that each of the persons
presently being served by the Applicant would be a Family Member, and
that the related trust would meet the requirements of paragraph
(d)(4)(vii) of the Family Office Rule pertaining to any irrevocable
trust in which one or more other Family Clients are the only current
beneficiaries. The Applicant states that in requesting the order, the
Applicant is not attempting to expand its operations or engage in any
level of commercial activity to which the Advisers Act is designed to
apply. Indeed, although the Sister-in-Law does not fall within the
definition of Family Member, she is considered to be, and is treated
as, a member of the Wick Family, and the number of natural persons who
are not Family Members as a percentage of the total natural persons to
whom the Applicant would provide Advisory Services if relief were
granted would be less than 5%. The Applicant maintains that, from the
perspective of the Wick Family, the Applicant seeks to continue
providing Advisory Services exclusively to members of a single family.
4. The Applicant also submits that there is no public interest in
requiring the Applicant to be registered under the Advisers Act. The
Applicant states that the Applicant is a private organization that was
formed to be the ``family office'' for the Wick Family, and that the
Applicant does not have any public clients. The Applicant maintains
that its Advisory Services are tailored exclusively to the needs of the
Wick Family and the Additional Family Client. The Applicant argues that
the presence of the Additional Family Client, who has been receiving
Advisory Services from the Applicant for 9 years, does not create any
public interest that would require the Applicant to be registered under
the Advisers Act that is different in any manner from the
considerations that apply to a ``family office'' that complies in all
respects with the Family Office Rule.
5. The Applicant argues that, although the Family Office Rule
largely codified the exemptive orders that the Commission had
previously issued before the enactment of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, the Commission recognized in
proposing the rule that the exact representations, conditions, or terms
contained in every exemptive order could not be captured in a rule of
general applicability. The Commission noted that family offices would
remain free to seek a Commission exemptive order to advise an
individual or entity that did not meet the proposed family client
definition, and that certain situations may raise unique conflicts and
issues that are more appropriately addressed through an exemptive order
process where the Commission can consider the specific facts and
circumstances, than through a rule of general applicability. The
Applicant maintains that its unusual circumstances--providing Services
to Family Clients and to an Additional Family Client for the past 9
years--have not changed the nature of the Applicant's operations into
that of a commercial advisory business, and that an exemptive order is
appropriate based on the Applicant's specific facts and circumstances.
6. For the foregoing reasons, the Applicant requests an order
declaring it to be a person not within the intent of section 202(a)(11)
of the Advisers Act. The Applicant submits that the order is necessary
and appropriate, in the public interest, consistent with the protection
of investors, and consistent with the purposes fairly intended by the
policy and provisions of the Advisers Act.

Applicant's Conditions

1. The Applicant will offer and provide Advisory Services only to
Family Clients and to the Additional Family Client, who will generally
be deemed to be, and treated as if the Sister-in-Law and the Trust each
were, a Family Client; provided, however, that the Additional Family
Client will be deemed to be, and treated as if it were, a Family Member
for purposes of paragraph (b)(1) and for purposes of paragraph
(d)(4)(vii) of the Family Office Rule.
2. The Applicant will at all times be wholly owned by the Extended
Wick Family and exclusively controlled (directly or indirectly) by one
or more Family Members and/or Family Entities (excluding the Additional
Family Client and the Additional Family Client's Family Entities) as
defined in paragraph (d)(5) of the Family Office Rule.
3. At all times the assets beneficially owned by Family Members
and/or Family Entities (excluding the Additional Family Client and the
Additional Family Client's Family Entities) will account for at least
75% of the assets for which the Applicant provides Advisory Services.
4. The Applicant will comply with all the terms for exclusion from
the definition of investment adviser under the Advisers Act set forth
in the Family Office Rule except for the limited exception requested by
the application.

For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-09556 Filed 4-23-15; 8:45 am]
BILLING CODE 8011-01-P

Document Created: 2015-12-16 08:43:34
Document Modified: 2015-12-16 08:43:34

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of Application for Exemption under the Investment Advisers Act of 1940 (``Advisers Act'').
Contact		Rachel Loko, Senior Counsel, at (202) 551-6883, or Holly L. Hunter-Ceci, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		80 FR 23064