80 FR 55885 - Pomona Investment Fund, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 180 (September 17, 2015)

[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Notices]
[Pages 55885-55887]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23288]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31819; 812-14416]


Pomona Investment Fund, et al.; Notice of Application

September 11, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from sections 18(c) 
and 18(i) of the Act and for an order pursuant to section 17(d) of the 
Act and rule 17d-1 under the Act.

-----------------------------------------------------------------------

Summary of Application:  Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of shares (``Shares'') and to impose asset-based distribution 
and service fees and contingent deferred sales loads (``CDSCs'').

[[Page 55886]]


Applicants:  Pomona Investment Fund (the ``Fund''), Pomona Management 
LLC (the ``Adviser'') and Voya Investments Distributor, LLC (the 
``Distributor'').

Filing Dates:  The application was filed on January 13, 2015, and 
amended on May 28, 2015 and August 10, 2015.

Hearing or Notification of Hearing:  An order granting the requested 
relief 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 October 6, 2015, and should be accompanied by proof of 
service on the applicants, in the form of an affidavit, or, for 
lawyers, a certificate of service. Pursuant to rule 0-5 under the 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 who wish to 
be notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090; Applicants, c/o Michael Granoff, 
Pomona Management LLC, 780 3rd Avenue, New York, New York 10017.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876 or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

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 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 Fund is a non-diversified closed-end management investment 
company registered under the Act and organized as a Delaware statutory 
trust. The Adviser, a Delaware limited liability company, is registered 
as an investment adviser under the Investment Advisers Act of 1940 and 
serves as investment adviser to the Fund. The Distributor, a broker-
dealer registered under the Securities Exchange Act of 1934 (``1934 
Act''), acts as principal underwriter of the Fund. The Distributor is 
under common control with the Adviser and is an affiliated person, as 
defined in section 2(a)(3) of the Act, of the Adviser.
    2. The Fund is engaged in a continuous public offering of Shares 
pursuant to its currently effective registration statement under the 
Securities Act of 1933 (``Securities Act'').\1\ The Fund's Shares are 
not listed on any securities exchange and are not traded on an over-
the-counter system such as Nasdaq. Applicants do not expect that any 
secondary market will develop for the Fund's Shares.
---------------------------------------------------------------------------

    \1\ Shares of the Fund will only be sold to ``accredited 
investors,'' as defined in Regulation D under the Securities Act.
---------------------------------------------------------------------------

    3. The Fund currently issues a single class of Shares (the ``Class 
A'') at net asset value per share (``NAV''), subject to a front-end 
sales load and an asset-based distribution and services fee. The Fund 
proposes to offer multiple classes of Shares (each a ``New Class'') at 
NAV and may also charge a front-end sales load and an annual asset-
based distribution and/or service fee. Each class of Shares would 
comply with the provisions of rule 12b-1 under the Act, as if the rule 
applied to closed-end management investment companies.
    4. In order to provide a limited degree of liquidity to 
shareholders, the Fund may from time to time offer to repurchase Shares 
at their then-current NAV in accordance with rule 13e-4 under the 1934 
Act. Repurchases of the Fund's Shares will be made at such times, in 
such amounts and on such terms as may be determined by the Fund's board 
of trustees (the ``Board'') in its sole discretion.\2\ The Adviser 
expects that it will generally recommend to the Board that the Fund 
offer to repurchase Shares from shareholders quarterly.
---------------------------------------------------------------------------

    \2\ For Class A, a 2% early repurchase fee will be charged by 
the Fund with respect to any repurchase of Shares from a shareholder 
at any time prior to the one-year anniversary of the shareholder's 
purchase of the respective Shares. Any early repurchase fee, and the 
Fund's waiver of, scheduled variation in, or elimination of, such 
early repurchase fee, will equally apply to all shareholders of the 
Fund, regardless of class, consistent with section 18 of the Act and 
rule 18f-3 thereunder. To the extent the Fund determines to waive, 
impose scheduled variations of, or eliminate the early repurchase 
fee, it will do so consistently with the requirements of rule 22d-1 
under the Act.
---------------------------------------------------------------------------

    5. Applicants request that the order also apply to any 
continuously-offered registered closed-end management investment 
company existing now or in the future for which the Adviser or the 
Distributor, or any entity controlling, controlled by, or under common 
control with the Adviser or the Distributor, acts as investment adviser 
or principal underwriter, and which provides periodic liquidity with 
respect to its Shares through tender offers conducted pursuant to rule 
13e-4 under the 1934 Act (collectively with the Fund, the 
``Funds'').\3\
---------------------------------------------------------------------------

    \3\ Any Fund relying on this relief will do so in a manner 
consistent with the terms and conditions of the application. 
Applicants represent that each investment company presently 
intending to rely on the requested order is listed as an applicant.
---------------------------------------------------------------------------

    6. Applicants represent that any asset-based distribution and/or 
service fees will comply with the provisions of rule 2830(d) of the 
Conduct Rules of the National Association of Securities Dealers, Inc. 
(``NASD Conduct Rule 2830'').\4\ Applicants also represent that the 
Fund will disclose in its prospectus, the fees, expenses and other 
characteristics of each class of Shares offered for sale by the 
prospectus, as is required for open-end, multiple class funds under 
Form N-1A. As if it were an open-end management investment company, the 
Fund will disclose fund expenses in shareholder reports, and disclose 
in its prospectus any arrangements that result in breakpoints in, or 
elimination of, sales loads.\5\ Each Fund and the Distributor will also 
comply with any requirements that may be adopted by the Commission or 
FINRA regarding disclosure at the point of sale and in transaction 
confirmations about the costs and conflicts of interest arising out of 
the distribution of open-end investment company shares, and regarding 
prospectus disclosure of sales loads and revenue sharing arrangements 
as if those requirements applied to the Fund and the Distributor.\6\
---------------------------------------------------------------------------

    \4\ Any references to NASD Conduct Rule 2830 include any 
successor or replacement Financial Industry Regulatory Authority 
(``FINRA'') rule to NASD Conduct Rule 2830.
    \5\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release); and 
Disclosure of Breakpoint Discounts by Mutual Funds, Investment 
Company Act Release No. 26464 (June 7, 2004) (adopting release).
    \6\ See Confirmation Requirements and Point of Sale Disclosure 
Requirements for Transactions in Certain Mutual Funds and Other 
Securities, and Other Confirmation Requirement Amendments, and 
Amendments to the Registration Form for Mutual Funds, Investment 
Company Act Release No. 26341 (Jan. 29, 2004) (proposing release).
---------------------------------------------------------------------------

    7. The Fund will allocate all expenses incurred by it among the 
various classes of Shares based on net assets of the Fund attributable 
to each such class, except that the NAV and expenses of each class will 
reflect the expenses associated with the distribution fees paid 
pursuant to a plan adopted in compliance with rule 12b-1 of that class 
(if any), shareholder servicing fees attributable to a particular class 
(as well as transfer agency fees, if any) and any other incremental 
expenses particular to that class. Expenses of the Fund allocated to a 
particular class of the

[[Page 55887]]

Fund's Shares will be borne on a pro rata basis by each outstanding 
Share of that class. Applicants state that the Fund will comply with 
the provisions of rule 18f-3 under the Act as if it were an open-end 
investment company.
    8. In the event the Funds impose a CDSC, applicants will comply 
with the provisions of rule 6c-10 under the Act, as if that rule 
applied to closed-end management investment companies. With respect to 
any waiver of, scheduled variation in, or elimination of the CDSC, the 
Fund will comply with the requirements of rule 22d-1 under the Act as 
if the Fund were an open-end investment company.

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the creation of 
multiple classes of Shares of the Fund may be prohibited by section 
18(c).
    2. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that permitting multiple classes of the Fund 
may violate section 18(i) of the Act because each class would be 
entitled to exclusive voting rights with respect to matters solely 
related to that class.
    3. Section 6(c) of the Act provides that the Commission may exempt 
any person, security or transaction or any class or classes of persons, 
securities or transactions from any provision of the Act, or from any 
rule under the Act, if and to the extent such exemption is necessary or 
appropriate in the public interest and consistent with the protection 
of investors and the purposes fairly intended by the policy and 
provisions of the Act. Applicants request an exemption under section 
6(c) from sections 18(c) and 18(i) to permit the Fund to issue multiple 
classes of Shares.
    4. Applicants submit that the proposed allocation of expenses and 
voting rights among multiple classes is equitable and will not 
discriminate against any group or class of shareholders. Applicants 
submit that the proposed system would permit the Fund to facilitate the 
distribution of Shares through diverse distribution channels and would 
provide investors with a broader choice of shareholder options. 
Applicants assert that the proposed closed-end investment company 
multiple class structure does not raise the concerns underlying section 
18 of the Act to any greater degree than open-end investment companies' 
multiple class structures that are permitted by rule 18f-3 under the 
Act. Applicants state the Fund will comply with the provisions of rule 
18f-3 as if it were an open-end investment company.

CDSCs

    5. Applicants believe that the requested relief meets the standards 
of section 6(c) of the Act. Rule 6c-10 under the Act permits open-end 
investment companies to impose CDSCs, subject to certain conditions. 
Applicants state that any CDSC imposed by the Fund will comply with 
rule 6c-10 under the Act as if that rule were applied to closed-end 
investment companies. The Fund also will make all required disclosures 
in accordance with the requirements of Form N-1A concerning CDSCs. 
Applicants further state that, in the event the Fund imposes CDSCs, the 
Fund will apply the CDSCs (and any waivers, scheduled variations, or 
eliminations of the CDSCs) uniformly to all shareholders in a given 
class and consistently with the requirements of rule 22d-1 under the 
Act.

Asset-Based Service and/or Distribution Fees

    6. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in which such registered 
company is a joint or a joint and several participant unless the 
Commission issues an order permitting the transaction. In reviewing 
applications submitted under section 17(d) and rule 17d-1, the 
Commission considers whether the participation of the investment 
company in a joint enterprise or joint arrangement is consistent with 
the provisions, policies and purposes of the Act, and the extent to 
which the participation is on a basis different from or less 
advantageous than that of other participants.
    7. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to permit the Fund to pay asset-based distribution and/or 
service fees. Applicants have agreed to comply with rules 12b-1 and 
17d-3 as if those rules applied to closed-end investment companies.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Applicants will comply with the provisions of rules 6c-10, 12b-1, 
17d-3, 18f-3 and 22d-1 under the Act, as amended from time to time or 
replaced, as if those rules applied to closed-end management investment 
companies, and will comply with the NASD Conduct Rule 2830, as amended 
from time to time, as if that rule applied to all closed-end management 
investment companies.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-23288 Filed 9-16-15; 8:45 am]
BILLING CODE 8011-01-P