80 FR 37330 - Context Capital Advisers, LLC, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 125 (June 30, 2015)

Page Range		37330-37331
FR Document		2015-15975

Applicants request an order to permit open-end management investment companies relying on rule 12d1-2 under the Act to invest in certain financial instruments.

Federal Register, Volume 80 Issue 125 (Tuesday, June 30, 2015)

[Federal Register Volume 80, Number 125 (Tuesday, June 30, 2015)]
[Notices]
[Pages 37330-37331]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-15975]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31689; 812-14392]


Context Capital Advisers, LLC, et al.; Notice of Application

June 24, 2015.
AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION:  Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a) 
under the Act.

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SUMMARY:  Applicants request an order to permit open-end management 
investment companies relying on rule 12d1-2 under the Act to invest in 
certain financial instruments.

APPLICANTS: Context Capital Funds (the ``Trust''), Context Capital 
Advisers, LLC (``Context Capital'') and Context Advisers II, L.P. 
(``Context II'').

DATES:  Filing Date: The application was filed on November 26, 2014, 
and amended on April 13, 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 applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on July 20, 2015 and should be accompanied by proof of service on 
applicants, in the form of an affidavit or, for lawyers, a certificate 
of service. Hearing requests should state the nature of the writer's 
interest, the reason for the request, and the issues contested. Persons 
who wish to be notified of a hearing may request notification by 
writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090; Applicants: Context Capital Funds, 
Three Canal Plaza, Suite 600, Portland, Maine 04101; Context Capital 
Advisers, LLC and Context Advisers II, L.P., 401 City Avenue, Suite 
815, Bala Cynwyd, PA 19004.

FOR FURTHER INFORMATION CONTACT:  Vanessa M. Meeks, Senior Counsel, or 
Melissa R. Harke, 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 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.

Applicants' Representations

    1. The Trust is organized under Delaware law as a statutory trust 
and is registered under the Act as an open-end management investment 
company. The Trust is a series trust which currently consists of two 
series. Context Capital is a limited liability corporation organized 
under the laws of Delaware and is registered as an investment adviser 
under the Investment Advisers Act of 1940 (the ``Advisers Act''). 
Context Capital currently serves as the investment adviser to the 
Context Alternative Strategies Fund, a series of the Trust. Context II 
is a limited partnership organized under the laws of Delaware and is 
registered as an investment adviser under the Advisers Act. Context II 
currently serves as the investment adviser to the Context Macro 
Opportunities Fund.
    2. Applicants request an exemption to the extent necessary to 
permit any existing or future series of the Trust and any other 
registered open-end management investment company or series thereof 
that: (a) is advised by Context Capital, Context II or any investment 
adviser controlling, controlled by, or under common control with 
Context Capital or Context II (any such adviser, Context Capital or 
Context II, an ``Adviser'' and collectively, the ``Advisers''); \1\ (b) 
is in the same group of investment companies as defined in section 
12(d)(1)(G) of the Act as the Trust; (c) invests in other registered 
open-end management investment companies (``Underlying Funds'') in 
reliance on section 12(d)(1)(G) of the Act; and (d) also is eligible to 
invest in securities (as defined in section 2(a)(36) of the Act) in 
reliance on rule 12d1-2 under the Act (each a ``Fund of Funds''), also 
to invest, to the extent consistent with its investment objectives, 
policies, strategies and limitations, in financial instruments that may 
not be securities within the meaning of section 2(a)(36) of the Act 
(``Other Investments'').\2\
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    \1\ Each Adviser will be registered as an investment adviser 
under the Advisers Act.
    \2\ Every existing entity that currently intends to rely on the 
requested order is named as an applicant. Any entity that relies on 
the order in the future will do so only in accordance with the terms 
and condition in the application.
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    3. Consistent with each Adviser's respective fiduciary obligations 
under the Act, each Fund of Funds' board of trustees will review the 
advisory fees charged by the applicable Fund of Funds' Adviser to 
ensure that they are based on services provided that are in addition 
to, rather than duplicative of, services provided pursuant to the 
advisory agreement of any investment company in which the Fund of Funds 
may invest.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no registered 
investment company (``acquiring company'') may acquire securities of 
another investment company (``acquired company'') if such securities 
represent more than 3% of the acquired company's outstanding voting 
stock or more than 5% of the acquiring company's total assets, or if 
such securities, together with the securities of other investment 
companies, represent more than 10% of the acquiring company's total 
assets. Section 12(d)(1)(B) of the Act provides that no registered 
open-end investment company may sell its securities to another 
investment company if the sale will cause the acquiring company to own 
more than 3% of the acquired company's voting stock, or cause more than 
10% of the acquired company's voting stock to be owned by investment

[[Page 37331]]

companies and companies controlled by them.
    2. Section 12(d)(1)(G) of the Act provides, in part, that section 
12(d)(1) will not apply to securities of an acquired company purchased 
by an acquiring company if: (i) The acquired company and acquiring 
company are part of the same group of investment companies; (ii) the 
acquiring company holds only securities of acquired companies that are 
part of the same group of investment companies, Government securities, 
and short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not 
excessive under rules adopted pursuant to section 22(b) or section 
22(c) of the Act by a securities association registered under section 
15A of the Securities Exchange Act of 1934 or by the Commission; and 
(iv) the acquired company has a policy that prohibits it from acquiring 
securities of registered open-end investment companies or registered 
unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the 
Act.
    3. Rule 12d1-2 under the Act permits a registered open-end 
investment company or a registered unit investment trust that relies on 
section 12(d)(1)(G) of the Act to acquire, in addition to securities 
issued by another registered investment company in the same group of 
investment companies, Government securities, and short-term paper: (i) 
Securities issued by an investment company that is not in the same 
group of investment companies, when the acquisition is in reliance on 
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii) securities (other 
than securities issued by an investment company); and (iii) securities 
issued by a money market fund, when the investment is in reliance on 
rule 12d1-1 under the Act. For the purposes of rule 12d1-2, 
``securities'' means any security as defined in section 2(a)(36) of the 
Act.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction from any provision of the Act, or 
from any rule under the Act, if such exemption is necessary or 
appropriate in the public interest and consistent with the protection 
of investors and the purposes fairly intended by the policies and 
provisions of the Act. Applicants submit that their request for relief 
meets this standard.
    5. Applicants request an order under section 6(c) of the Act for an 
exemption from rule 12d1-2(a) to allow the Funds of Funds to invest in 
Other Investments while investing in Underlying Funds. Applicants state 
that the Funds of Funds will comply with rule 12d1-2 under the Act, but 
for the fact that the Funds of Funds may invest a portion of their 
assets in Other Investments. Applicants assert that permitting the 
Funds of Funds to invest in Other Investments as described in the 
application would not raise any of the concerns that the requirements 
of section 12(d)(1) were designed to address.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Applicants will comply with all provisions of rule 12d1-2 under the 
Act, except for paragraph (a)(2) to the extent that it restricts any 
Fund of Funds from investing in Other Investments as described in the 
application.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-15975 Filed 6-29-15; 08:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 125 / Tuesday, June 30, 2015 / Notices 37331

companies and companies controlled by Funds will comply with rule 12d1–2 I. Self-Regulatory Organization’s
them. under the Act, but for the fact that the Statement of the Terms of Substance of
2. Section 12(d)(1)(G) of the Act Funds of Funds may invest a portion of the Proposed Rule Change
provides, in part, that section 12(d)(1) their assets in Other Investments. The Exchange proposes to amend
will not apply to securities of an Applicants assert that permitting the Commentary .02 to Exchange Rule 6.72
acquired company purchased by an Funds of Funds to invest in Other in order to extend the Penny Pilot in
acquiring company if: (i) The acquired Investments as described in the options classes in certain issues (‘‘Pilot
company and acquiring company are application would not raise any of the Program’’) previously approved by the
part of the same group of investment Securities and Exchange Commission
concerns that the requirements of
companies; (ii) the acquiring company (‘‘Commission’’) through June 30, 2016.
section 12(d)(1) were designed to
holds only securities of acquired The Pilot Program is currently
companies that are part of the same address.
scheduled to expire on June 30, 2015.
group of investment companies, Applicants’ Condition The text of the proposed rule change is
Government securities, and short-term available on the Exchange’s Web site at
paper; (iii) the aggregate sales loads and Applicants agree that any order
www.nyse.com, at the principal office of
distribution-related fees of the acquiring granting the requested relief will be the Exchange, and at the Commission’s
company and the acquired company are subject to the following condition: Public Reference Room.
not excessive under rules adopted Applicants will comply with all
pursuant to section 22(b) or section II. Self-Regulatory Organization’s
provisions of rule 12d1–2 under the Act,
22(c) of the Act by a securities Statement of the Purpose of, and
except for paragraph (a)(2) to the extent
association registered under section 15A Statutory Basis for, the Proposed Rule
that it restricts any Fund of Funds from Change
of the Securities Exchange Act of 1934
or by the Commission; and (iv) the investing in Other Investments as
described in the application. In its filing with the Commission, the
acquired company has a policy that self-regulatory organization included
prohibits it from acquiring securities of For the Commission, by the Division of statements concerning the purpose of,
registered open-end investment Investment Management, under delegated and basis for, the proposed rule change
companies or registered unit investment authority. and discussed any comments it received
trusts in reliance on section 12(d)(1)(F) Robert W. Errett, on the proposed rule change. The text
or (G) of the Act. Deputy Secretary. of those statements may be examined at
3. Rule 12d1–2 under the Act permits the places specified in Item IV below.
[FR Doc. 2015–15975 Filed 6–29–15; 08:45 am]
a registered open-end investment The Exchange has prepared summaries,
company or a registered unit investment BILLING CODE 8011–01–P
set forth in sections A, B, and C below,
trust that relies on section 12(d)(1)(G) of of the most significant parts of such
the Act to acquire, in addition to statements.
securities issued by another registered SECURITIES AND EXCHANGE
investment company in the same group COMMISSION A. Self-Regulatory Organization’s
of investment companies, Government Statement of the Purpose of, and the
securities, and short-term paper: (i) [Release No. 34–75280; File No. SR– Statutory Basis for, the Proposed Rule
Securities issued by an investment NYSEArca-2015–51] Change
company that is not in the same group 1. Purpose
of investment companies, when the Self-Regulatory Organizations; NYSE
acquisition is in reliance on section Arca, Inc.; Notice of Filing and The Exchange hereby proposes to
12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii) Immediate Effectiveness of Proposed amend Commentary .02 to Exchange
securities (other than securities issued Rule Change Amending Commentary Rule 6.72 to extend the time period of
by an investment company); and (iii) .02 to Exchange Rule 6.72 in Order To the Pilot Program,4 which is currently
securities issued by a money market scheduled to expire on June 30, 2015,
Extend the Penny Pilot in Options
fund, when the investment is in reliance through June 30, 2016. The Exchange
Classes in Certain Issues Through also proposes that the dates to replace
on rule 12d1–1 under the Act. For the June 30, 2016
purposes of rule 12d1–2, ‘‘securities’’ issues in the Pilot Program that have
means any security as defined in section June 24, 2015. been delisted be revised to the second
2(a)(36) of the Act. trading day following July 1, 2015 and
Pursuant to Section 19(b)(1) 1 of the January 1, 2016.5
4. Section 6(c) of the Act provides that
Securities Exchange Act of 1934 (the This filing does not propose any
the Commission may exempt any
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 substantive changes to the Pilot
person, security, or transaction from any
provision of the Act, or from any rule notice is hereby given that on June 15, Program: all classes currently
under the Act, if such exemption is 2015, NYSE Arca, Inc. (the ‘‘Exchange’’ participating will remain the same and
necessary or appropriate in the public or ‘‘NYSE Arca’’) filed with the all minimum increments will remain
interest and consistent with the Securities and Exchange Commission
4 See Securities Exchange Act Release No. 73777
protection of investors and the purposes (the ‘‘Commission’’) the proposed rule
(December 8, 2014), 79 FR 73913 (December 12,
fairly intended by the policies and change as described in Items I and II 2014) (SR–NYSEArca–2014–136).
provisions of the Act. Applicants submit below, which Items have been prepared
asabaliauskas on DSK5VPTVN1PROD with NOTICES

5 The month immediately preceding a

that their request for relief meets this by the self-regulatory organization. The replacement class’s addition to the Pilot Program
Commission is publishing this notice to (i.e., June) would not be used for purposes of the
standard. analysis for determining the replacement class.
5. Applicants request an order under solicit comments on the proposed rule Thus, a replacement class to be added on the
section 6(c) of the Act for an exemption change from interested persons. second trading day following July 1, 2015 would be
from rule 12d1–2(a) to allow the Funds identified based on The Option Clearing
Corporation’s trading volume data from December
of Funds to invest in Other Investments 1 15 U.S.C. 78s(b)(1). 1, 2014 through May 31, 2015. The Exchange will
while investing in Underlying Funds. 2 15 U.S.C. 78a. announce the replacement issues to the Exchange’s
Applicants state that the Funds of 3 17 CFR 240.19b–4. membership through a Trader Update.

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Document Created: 2018-02-22 11:16:45
Document Modified: 2018-02-22 11:16:45

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 an application under section 6(c) of the Investment Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a) under the Act.
Dates		Filing Date: The application was filed on November 26, 2014, and amended on April 13, 2015.
Contact		Vanessa M. Meeks, Senior Counsel, or Melissa R. Harke, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		80 FR 37330