80_FR_61458 80 FR 61262 - Harvest Capital Credit Corporation, et al.; Notice of Application

80 FR 61262 - Harvest Capital Credit Corporation, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 196 (October 9, 2015)

Page Range61262-61266
FR Document2015-25760

Federal Register, Volume 80 Issue 196 (Friday, October 9, 2015) 
[Federal Register Volume 80, Number 196 (Friday, October 9, 2015)]
[Notices]
[Pages 61262-61266]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-25760]



[[Page 61262]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31860; File No. 812-14365]


Harvest Capital Credit Corporation, et al.; Notice of Application

October 5, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under sections 17(d) and 
57(i) of the Investment Company Act of 1940 (the ``Act'') and rule 17d-
1 under the Act to permit certain joint transactions otherwise 
prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 
under the Act.

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

Summary of Application:  Applicants request an order to permit a 
business development company (``BDC'') to co-invest in portfolio 
companies with certain affiliated investment funds and certain 
affiliated persons' proprietary accounts.

Applicants:  Harvest Capital Credit Corporation (``HCC''); HCAP 
Advisors LLC (the ``BDC Adviser''); JMP Credit Advisors LLC 
(``JMPCA''); JMP Group LLC (``JMPG LLC''), JMP Group Inc. (``JMPG''), 
JMP Capital LLC (``JMP Capital''), JMP Credit Corporation (``JMP 
Credit''), and JMP Holding LLC (``JMP Holding'' and together with JMPG 
LLC, JMPG, JMP Capital, and JMP Credit, the ``JMPG Companies'').

Filing Dates:  The application was filed on October 1, 2014, and 
amended on February 11, 2015, and June 2, 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 30, 2015, and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5, 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: Brent J. Fields, Secretary, U.S. Securities and Exchange 
Commission, 100 F St. NE., Washington, DC 20549-1090. Applicants: 
Richard Buckanavage, Harvest Capital Credit Corporation, 767 Third 
Avenue, 25th Floor, New York, NY 10017; Steven Boehm, Esq., and Harry 
Pangas, Esq., Sutherland Asbill & Brennan LLP, 700 Sixth Street NW., 
Suite 700, Washington, DC 20001-3980.

FOR FURTHER INFORMATION CONTACT: Anil K. Abraham, Senior Special 
Counsel, at (202) 551-2614 or James M. Curtis, Branch Chief, at (202) 
551-6712 (Chief Counsel's Office, Division of Investment Management).

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. HCC is a Delaware corporation organized in February 2011 as a 
closed-end management investment company that has elected to be 
regulated as a BDC under section 54(a) of the Act.\1\ HCC's Objectives 
and Strategies \2\ are to generate both current income and capital 
appreciation primarily by making direct investments in the form of 
subordinated debt, senior debt, and minority equity investments in 
privately-held, small to mid-sized U.S. companies. The board of 
directors of HCC (the ``HCC Board,'' and together with any board of 
directors of a Future Regulated Fund (defined below), the ``Boards,'' 
and each, a ``Board,'' as applicable) is composed of five directors, 
three of whom are not ``interested persons,'' as defined in section 
2(a)(19) of the Act (``Non-Interested Directors''), of HCC. Each 
Regulated Fund invests or intends to invest its assets so as to qualify 
for U.S. federal income tax treatment as a regulated investment 
company.
---------------------------------------------------------------------------

    \1\ Section 2(a)(48) defines a BDC to be any closed-end 
investment company that operates for the purpose of making 
investments in securities described in sections 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
    \2\ ``Objectives and Strategies'' means a Regulated Fund's 
(defined below) investment objectives and strategies, as described 
in the Regulated Fund's registration statement on Form N-2, other 
filings the Regulated Fund has made with the Commission under the 
Securities Act of 1933 (the ``Securities Act''), or under the 
Securities Exchange Act of 1934, and the Regulated Fund's reports to 
shareholders.
---------------------------------------------------------------------------

    2. JMPG was incorporated in Delaware in January 2000 and completed 
its initial public offering in May 2007. On January 1, 2015, JMP Merger 
Corp., a Delaware corporation and wholly-owned subsidiary of JMPG LLC, 
merged with and into JMPG, with JMPG as the surviving entity. 
Consequently, JMPG LLC replaced JMPG as the publicly traded company, 
and JMPG LLC's common stock is currently listed on the New York Stock 
Exchange under the symbol ``JMP.''
    3. JMPG LLC is a Delaware limited liability company and, together 
with its subsidiaries, is a full-service investment banking and asset 
management firm that provides investment banking, sales and trading, 
and equity research services to corporate and institutional clients, 
and alternative asset management products and services to institutional 
investors and high net-worth individuals. JMPG, JMP Capital, JMP 
Credit, and JMP Holding are direct or indirect wholly-owned 
subsidiaries of JMPG LLC.
    4. The JMPG Companies, from time to time, may hold various 
financial assets in a principal capacity (together, in such capacity, 
``Existing JMPG Proprietary Accounts,'' and together with any Future 
JMPG Proprietary Account (defined below), the ``JMPG Proprietary 
Accounts'').
    5. The BDC Adviser and JMPCA are Delaware limited liability 
companies registered with the Commission as investment advisers under 
the Investment Advisers Act of 1940 (the ``Advisers Act''). The BDC 
Adviser is a majority-owned subsidiary of JMPG LLC. The BDC Adviser 
serves as investment adviser to HCC and manages HCC's portfolio in 
accordance with HCC's Objectives and Strategies. JMPCA, a wholly-owned 
subsidiary of JMPG LLC, serves as the administrator to HCC. JMPCA also 
serves as investment adviser to several collateralized loan obligation 
vehicles (``CLOs'') and manages the portfolios of the CLOs.
    6. Applicants seek an order (``Order'') to permit one or more 
Regulated Funds \3\ and/or one or more Affiliated Funds \4\ to

[[Page 61263]]

participate in the same investment opportunities through a co-
investment program (the ``Co-Investment Program'') where such 
participation would otherwise be prohibited by section 17(d) or section 
57(a)(4) and rule 17d-1 by (a) co-investing with each other in 
securities issued by issuers in private placement transactions in which 
an Adviser negotiates terms in addition to price; \5\ and (b) making 
additional investments in securities of such issuers, including through 
the exercise of warrants, conversion privileges, and other rights to 
purchase securities of the issuers (``Follow-On Investments''). ``Co-
Investment Transaction'' means any transaction in which a Regulated 
Fund (or its Wholly-Owned Investment Sub, as defined below) has 
participated together with one or more other Regulated Funds and/or one 
or more Affiliated Funds in reliance on the requested Order. 
``Potential Co-Investment Transaction'' means any investment 
opportunity in which a Regulated Fund (or its Wholly-Owned Investment 
Sub) could not participate together with one or more Affiliated Funds 
and/or one or more other Regulated Funds without obtaining and relying 
on the Order.\6\
---------------------------------------------------------------------------

    \3\ ``Regulated Fund'' means HCC and any Future Regulated Fund. 
``Future Regulated Fund'' means any closed-end management investment 
company (a) that is registered under the Act or has elected to be 
regulated as BDC, (b) whose investment adviser is an Adviser, and 
(c) that intends to participate in the Co-Investment Program 
(defined below). The term ``Adviser'' means (a) the BDC Adviser and 
JMPCA and (b) any future investment adviser that controls, is 
controlled by or is under common control with JMPG LLC and is 
registered as an investment adviser under the Advisers Act.
    \4\ ``Affiliated Fund'' means the Existing JMPG Proprietary 
Accounts, any Future JMPG Proprietary Accounts, and any Future 
Affiliated Funds. ``Future JMPG Proprietary Account'' means any 
direct or indirect, wholly- or majority-owned subsidiary of JMPG LLC 
that is formed in the future and, from time to time, may hold 
various financial assets in a principal capacity. ``Future 
Affiliated Fund'' means any entity (a) whose investment adviser is 
an Adviser, (b) that would be an investment company but for section 
3(c)(1) or 3(c)(7) of the Act, and (c) that intends to participate 
in the Co-Investment Program.
    \5\ The term ``private placement transactions'' means 
transactions in which the offer and sale of securities by the issuer 
are exempt from registration under the Securities Act.
    \6\ All existing entities that currently intend to rely upon the 
requested Order have been named as applicants. Any other existing or 
future entity that subsequently relies on the Order will comply with 
the terms and conditions of the application.
---------------------------------------------------------------------------

    7. Applicants state that a Regulated Fund may, from time to time, 
form one or more Wholly-Owned Investment Subs.\7\ Such a subsidiary 
would be prohibited from investing in a Co-Investment Transaction with 
any Affiliated Fund or Regulated Fund because it would be a company 
controlled by its parent Regulated Fund for purposes of section 
57(a)(4) and rule 17d-1. Applicants request that each Wholly-Owned 
Investment Sub be permitted to participate in Co-Investment 
Transactions in lieu of its parent Regulated Fund and that the Wholly-
Owned Investment Sub's participation in any such transaction be 
treated, for purposes of the requested Order, as though the parent 
Regulated Fund were participating directly. Applicants represent that 
this treatment is justified because a Wholly-Owned Investment Sub would 
have no purpose other than serving as a holding vehicle for the 
Regulated Fund's investments, and, therefore, no conflicts of interest 
could arise between the Regulated Fund and the Wholly-Owned Investment 
Sub. The Regulated Fund's Board would make all relevant determinations 
under the Conditions with regard to a Wholly-Owned Investment Sub's 
participation in a Co-Investment Transaction, and the Regulated Fund's 
Board would be informed of, and take into consideration, any proposed 
use of a Wholly-Owned Investment Sub in the Regulated Fund's place. If 
the Regulated Fund proposes to participate in the same Co-Investment 
Transaction with any of its Wholly-Owned Investment Subs, the Board of 
the Regulated Fund will also be informed of, and take into 
consideration, the relative participation of the Regulated Fund and the 
Wholly-Owned Investment Sub.
---------------------------------------------------------------------------

    \7\ The term ``Wholly-Owned Investment Sub'' means an entity (i) 
that is wholly-owned by a Regulated Fund (with the Regulated Fund at 
all times holding, beneficially and of record, 100% of the voting 
and economic interests); (ii) whose sole business purpose is to hold 
one or more investments on behalf of the Regulated Fund; (iii) with 
respect to which the Regulated Fund's Board has the sole authority 
to make all determinations with respect to the entity's 
participation under the conditions of the application; and (iv) that 
would be an investment company but for section 3(c)(1) or 3(c)(7) of 
the Act.
---------------------------------------------------------------------------

    8. When considering Potential Co-Investment Transactions for any 
Regulated Fund, the applicable Adviser will consider only the 
Objectives and Strategies, investment policies, investment positions, 
capital available for investment, and other pertinent factors 
applicable to that Regulated Fund. The Regulated Fund Advisers expect 
that any portfolio company that is an appropriate investment for a 
Regulated Fund should also be an appropriate investment for one or more 
other Regulated Funds and/or one or more Affiliated Funds, with certain 
exceptions based on available capital or diversification.\8\
---------------------------------------------------------------------------

    \8\ The Regulated Funds, however, will not be obligated to 
invest, or co-invest, when investment opportunities are referred to 
them.
---------------------------------------------------------------------------

    9. Other than pro rata dispositions and Follow-On Investments as 
provided in Conditions 7 and 8, and after making the determinations 
required in Conditions 1 and 2(a), the Adviser will present each 
Potential Co-Investment Transaction and the proposed allocation to the 
directors of the Board eligible to vote under section 57(o) of the Act 
(``Eligible Directors''), and the ``required majority,'' as defined in 
section 57(o) of the Act (``Required Majority'') \9\ will approve each 
Co-Investment Transaction prior to any investment by the participating 
Regulated Fund.
---------------------------------------------------------------------------

    \9\ In the case of a Regulated Fund that is a registered closed-
end fund, the Board members that make up the Required Majority will 
be determined as if the Regulated Fund were a BDC subject to section 
57(o).
---------------------------------------------------------------------------

    10. With respect to the pro rata dispositions and Follow-On 
Investments provided in Conditions 7 and 8, a Regulated Fund may 
participate in a pro rata disposition or Follow-On Investment without 
obtaining prior approval of the Required Majority if, among other 
things: (i) The proposed participation of each Regulated Fund and 
Affiliated Fund in such disposition is proportionate to its outstanding 
investments in the issuer immediately preceding the disposition or 
Follow-On Investment, as the case may be; and (ii) the Board of the 
Regulated Fund has approved that Regulated Fund's participation in pro 
rata dispositions and Follow-On Investments as being in the best 
interests of the Regulated Fund. If the Board does not so approve, any 
such disposition or Follow-On Investment will be submitted to the 
Regulated Fund's Eligible Directors. The Board of any Regulated Fund 
may at any time rescind, suspend or qualify its approval of pro rata 
dispositions and Follow-On Investments with the result that all 
dispositions and/or Follow-On Investments must be submitted to the 
Eligible Directors.
    11. No Non-Interested Director of a Regulated Fund will have a 
financial interest in any Co-Investment Transaction, other than through 
share ownership in one of the Regulated Funds.

Applicants' Legal Analysis

    1. Section 57(a)(4) of the Act prohibits certain affiliated persons 
of a BDC from participating in joint transactions with the BDC or a 
company controlled by a BDC in contravention of rules as prescribed by 
the Commission. Under section 57(b)(2) of the Act, any person who is 
directly or indirectly controlling, controlled by, or under common 
control with a BDC is subject to section 57(a)(4). Applicants submit 
that each of the Regulated Funds and Affiliated Funds could be deemed 
to be a person related to each Regulated Fund in a manner described by 
section 57(b) by virtue of being under common control. Section 57(i) of 
the Act provides that, until the Commission prescribes rules under 
section 57(a)(4), the Commission's rules under section 17(d) of the Act 
applicable to registered closed-end investment companies will be deemed 
to apply to transactions subject to section 57(a)(4). Because the 
Commission has not adopted any rules under section 57(a)(4), rule 17d-1 
also applies to joint transactions with Regulated Funds that are BDCs. 
Section 17(d) of the Act and rule 17d-1 under

[[Page 61264]]

the Act are applicable to Regulated Funds that are registered closed-
end investment companies.
    2. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
affiliated persons of a registered investment company from 
participating in joint transactions with the company unless the 
Commission has granted an order permitting such transactions. In 
passing upon applications under rule 17d-1, the Commission considers 
whether the company's participation in the joint transaction is 
consistent with the provisions, policies, and purposes of the Act and 
the extent to which such participation is on a basis different from or 
less advantageous than that of other participants.
    3. Applicants state that in the absence of the requested relief, 
the Regulated Funds would be, in some circumstances, limited in their 
ability to participate in attractive and appropriate investment 
opportunities. Applicants believe that the proposed terms and 
conditions will ensure that the Co-Investment Transactions are 
consistent with the protection of each Regulated Fund's shareholders 
and with the purposes intended by the policies and provisions of the 
Act. Applicants state that the Regulated Funds' participation in the 
Co-Investment Transactions will be consistent with the provisions, 
policies, and purposes of the Act and on a basis that is not different 
from or less advantageous than that of other participants.
    4. Under Condition 16 below, if the Advisers, the principals of any 
of the Advisers (the ``Principals''), or any person controlling, 
controlled by, or under common control with the Advisers or the 
Principals, and the Affiliated Funds (collectively, the ``Holders'') 
own in the aggregate more than 25 percent of the outstanding voting 
shares of a Regulated Fund (the ``Shares''), then the Holders will vote 
such Shares as directed by an independent third party (such as the 
trustee of a voting trust or a proxy adviser) when voting on (1) the 
election of directors; (2) the removal of one or more directors; or (3) 
any matters requiring approval by the vote of a majority of the 
outstanding voting securities, as defined in section 2(a)(42) of the 
Act. Applicants believe that this Condition will ensure that the Non-
Interested Directors will act independently in evaluating the Co-
Investment Program, because the ability of the Advisers or the 
Principals to influence the Non-Interested Directors by a suggestion, 
explicit or implied, that the Non-Interested Directors can be removed 
will be limited significantly. Applicants represent that the Non-
Interested Directors shall evaluate and approve any such voting trust 
or proxy adviser, taking into account its qualifications, reputation 
for independence, cost to the shareholders, and other factors that they 
deem relevant.

Applicants' Conditions

    Applicants agree that the Order will be subject to the following 
Conditions:
    1. Each time an Adviser considers a Potential Co-Investment 
Transaction for an Affiliated Fund or another Regulated Fund that falls 
within a Regulated Fund's then-current Objectives and Strategies, the 
Regulated Fund's Adviser will make an independent determination of the 
appropriateness of the investment for such Regulated Fund in light of 
the Regulated Fund's then-current circumstances.
    2. (a) If the Adviser deems a Regulated Fund's participation in any 
Potential Co-Investment Transaction to be appropriate for the Regulated 
Fund, it will then determine an appropriate level of investment for the 
Regulated Fund.
    (b) If the aggregate amount recommended by the applicable Adviser 
to be invested by the applicable Regulated Fund in the Potential Co-
Investment Transaction, together with the amount proposed to be 
invested by the other participating Regulated Funds and Affiliated 
Funds, collectively, in the same transaction, exceeds the amount of the 
investment opportunity, the investment opportunity will be allocated 
among them pro rata based on each participant's capital available for 
investment in the asset class being allocated, up to the amount 
proposed to be invested by each. The applicable Adviser will provide 
the Eligible Directors of each participating Regulated Fund with 
information concerning each participating party's available capital to 
assist the Eligible Directors with their review of the Regulated Fund's 
investments for compliance with these allocation procedures.
    (c) After making the determinations required in Conditions 1 and 
2(a), the applicable Adviser will distribute written information 
concerning the Potential Co-Investment Transaction (including the 
amount proposed to be invested by each participating Regulated Fund and 
Affiliated Fund) to the Eligible Directors of each participating 
Regulated Fund for their consideration. A Regulated Fund will co-invest 
with one or more other Regulated Funds and/or one or more Affiliated 
Funds only if, prior to the Regulated Fund's participation in the 
Potential Co-Investment Transaction, a Required Majority concludes 
that:
    (i) the terms of the Potential Co-Investment Transaction, including 
the consideration to be paid, are reasonable and fair to the Regulated 
Fund and its shareholders and do not involve overreaching in respect of 
the Regulated Fund or its shareholders on the part of any person 
concerned;
    (ii) the Potential Co-Investment Transaction is consistent with:
    (A) the interests of the shareholders of the Regulated Fund; and
    (B) the Regulated Fund's then-current Objectives and Strategies;
    (iii) the investment by any other Regulated Funds or Affiliated 
Funds would not disadvantage the Regulated Fund, and participation by 
the Regulated Fund would not be on a basis different from or less 
advantageous than that of other Regulated Funds or Affiliated Funds; 
provided that, if any other Regulated Fund or Affiliated Fund, but not 
the Regulated Fund itself, gains the right to nominate a director for 
election to a portfolio company's board of directors or the right to 
have a board observer or any similar right to participate in the 
governance or management of the portfolio company, such event shall not 
be interpreted to prohibit the Required Majority from reaching the 
conclusions required by this Condition (2)(c)(iii), if:
    (A) the Eligible Directors will have the right to ratify the 
selection of such director or board observer, if any;
    (B) the applicable Adviser agrees to, and does, provide periodic 
reports to the Regulated Fund's Board with respect to the actions of 
such director or the information received by such board observer or 
obtained through the exercise of any similar right to participate in 
the governance or management of the portfolio company; and
    (C) any fees or other compensation that any Affiliated Fund or any 
Regulated Fund or any affiliated person of any Affiliated Fund or any 
Regulated Fund receives in connection with the right of an Affiliated 
Fund or a Regulated Fund to nominate a director or appoint a board 
observer or otherwise to participate in the governance or management of 
the portfolio company will be shared proportionately among the 
participating Affiliated Funds (who each may, in turn, share its 
portion with its affiliated persons) and the participating Regulated 
Funds in proportion to the amount of each party's investment; and
    (iv) the proposed investment by the Regulated Fund will not benefit 
the Advisers, the Affiliated Funds or the

[[Page 61265]]

other Regulated Funds or any affiliated person of any of them (other 
than the parties to the Co-Investment Transaction), except (A) to the 
extent permitted by Condition 13, (B) to the extent permitted by 
section 17(e) or 57(k) of the Act, as applicable, (C) indirectly, as a 
result of an interest in the securities issued by one of the parties to 
the Co-Investment Transaction, or (D) in the case of fees or other 
compensation described in Condition 2(c)(iii)(C).
    3. Each Regulated Fund has the right to decline to participate in 
any Potential Co-Investment Transaction or to invest less than the 
amount proposed.
    4. The applicable Adviser will present to the Board of each 
Regulated Fund, on a quarterly basis, a record of all investments in 
Potential Co-Investment Transactions made by any of the other Regulated 
Funds or Affiliated Funds during the preceding quarter that fell within 
the Regulated Fund's then-current Objectives and Strategies that were 
not made available to the Regulated Fund, and an explanation of why the 
investment opportunities were not offered to the Regulated Fund. All 
information presented to the Board pursuant to this Condition will be 
kept for the life of the Regulated Fund and at least two years 
thereafter, and will be subject to examination by the Commission and 
its staff.
    5. Except for Follow-On Investments made in accordance with 
Condition 8,\10\ a Regulated Fund will not invest in reliance on the 
Order in any issuer in which another Regulated Fund, Affiliated Fund, 
or any affiliated person of another Regulated Fund or Affiliated Fund 
is an existing investor.
---------------------------------------------------------------------------

    \10\ This exception applies only to Follow-On Investments by a 
Regulated Fund in issuers in which that Regulated Fund already holds 
investments.
---------------------------------------------------------------------------

    6. A Regulated Fund will not participate in any Potential Co-
Investment Transaction unless the terms, conditions, price, class of 
securities to be purchased, settlement date, and registration rights 
will be the same for each participating Regulated Fund and Affiliated 
Fund. The grant to an Affiliated Fund or another Regulated Fund, but 
not the Regulated Fund, of the right to nominate a director for 
election to a portfolio company's board of directors, the right to have 
an observer on the board of directors or similar rights to participate 
in the governance or management of the portfolio company will not be 
interpreted so as to violate this Condition 6, if Conditions 
2(c)(iii)(A), (B) and (C) are met.
    7. (a) If any Affiliated Fund or any Regulated Fund elects to sell, 
exchange or otherwise dispose of an interest in a security that was 
acquired in a Co-Investment Transaction, the applicable Advisers will:
    (i) notify each Regulated Fund that participated in the Co-
Investment Transaction of the proposed disposition at the earliest 
practical time; and
    (ii) formulate a recommendation as to participation by each 
Regulated Fund in the disposition.
    (b) Each Regulated Fund will have the right to participate in such 
disposition on a proportionate basis, at the same price and on the same 
terms and conditions as those applicable to the participating 
Affiliated Funds and Regulated Funds.
    (c) A Regulated Fund may participate in such disposition without 
obtaining prior approval of the Required Majority if: (i) The proposed 
participation of each Regulated Fund and each Affiliated Fund in such 
disposition is proportionate to its outstanding investments in the 
issuer immediately preceding the disposition; (ii) the Board of the 
Regulated Fund has approved as being in the best interests of the 
Regulated Fund the ability to participate in such dispositions on a pro 
rata basis (as described in greater detail in the application); and 
(iii) the Board of the Regulated Fund is provided on a quarterly basis 
with a list of all dispositions made in accordance with this Condition. 
In all other cases, the Adviser will provide its written recommendation 
as to the Regulated Fund's participation to the Eligible Directors, and 
the Regulated Fund will participate in such disposition solely to the 
extent that a Required Majority determines that it is in the Regulated 
Fund's best interests.
    (d) Each Affiliated Fund and each Regulated Fund will bear its own 
expenses in connection with any such disposition.
    8. (a) If any Affiliated Fund or any Regulated Fund desires to make 
a Follow-On Investment in a portfolio company whose securities were 
acquired in a Co-Investment Transaction, the applicable Advisers will:
    (i) Notify each Regulated Fund that participated in the Co-
Investment Transaction of the proposed transaction at the earliest 
practical time; and
    (ii) formulate a recommendation as to the proposed participation, 
including the amount of the proposed Follow-On Investment, by each 
Regulated Fund.
    (b) A Regulated Fund may participate in such Follow-On Investment 
without obtaining prior approval of the Required Majority if: (i) The 
proposed participation of each Regulated Fund and each Affiliated Fund 
in such investment is proportionate to its outstanding investments in 
the issuer immediately preceding the Follow-On Investment; and (ii) the 
Board of the Regulated Fund has approved as being in the best interests 
of the Regulated Fund the ability to participate in Follow-On 
Investments on a pro rata basis (as described in greater detail in the 
application). In all other cases, the Adviser will provide its written 
recommendation as to the Regulated Fund's participation to the Eligible 
Directors, and the Regulated Fund will participate in such Follow-On 
Investment solely to the extent that a Required Majority determines 
that it is in the Regulated Fund's best interests.
    (c) If, with respect to any Follow-On Investment:
    (i) the amount of the opportunity is not based on the Regulated 
Funds' and the Affiliated Funds' outstanding investments immediately 
preceding the Follow-On Investment; and
    (ii) the aggregate amount recommended by the Adviser to be invested 
by each Regulated Fund in the Follow-On Investment, together with the 
amount proposed to be invested by the participating Affiliated Funds in 
the same transaction, exceeds the amount of the opportunity; then the 
amount invested by each such party will be allocated among them pro 
rata based on each participant's capital available for investment in 
the asset class being allocated, up to the amount proposed to be 
invested by each.
    (d) The acquisition of Follow-On Investments as permitted by this 
Condition will be considered a Co-Investment Transaction for all 
purposes and subject to the other Conditions set forth in this 
application.
    9. The Non-Interested Directors of each Regulated Fund will be 
provided quarterly for review all information concerning Potential Co-
Investment Transactions and Co-Investment Transactions, including 
investments made by other Regulated Funds or Affiliated Funds that the 
Regulated Fund considered but declined to participate in, so that the 
Non-Interested Directors may determine whether all investments made 
during the preceding quarter, including those investments that the 
Regulated Fund considered but declined to participate in, comply with 
the Conditions of the Order. In addition, the Non-Interested Directors 
will consider at least annually the continued appropriateness for the 
Regulated Fund of participating in new and existing Co-Investment 
Transactions.

[[Page 61266]]

    10. Each Regulated Fund will maintain the records required by 
section 57(f)(3) of the Act as if each of the Regulated Funds were a 
BDC and each of the investments permitted under these Conditions were 
approved by the Required Majority under section 57(f) of the Act.
    11. No Non-Interested Director of a Regulated Fund will also be a 
director, general partner, managing member or principal, or otherwise 
an ``affiliated person'' (as defined in the Act) of an Affiliated Fund.
    12. The expenses, if any, associated with acquiring, holding or 
disposing of any securities acquired in a Co-Investment Transaction 
(including, without limitation, the expenses of the distribution of any 
such securities registered for sale under the Securities Act) will, to 
the extent not payable by the Advisers under their respective 
investment advisory agreements with Affiliated Funds and the Regulated 
Funds, be shared by the Regulated Funds and the Affiliated Funds in 
proportion to the relative amounts of the securities held or to be 
acquired or disposed of, as the case may be.
    13. Any transaction fee (including break-up or commitment fees but 
excluding broker's fees contemplated by section 17(e) or 57(k) of the 
Act, as applicable), received in connection with a Co-Investment 
Transaction will be distributed to the participating Regulated Funds 
and Affiliated Funds on a pro rata basis based on the amounts they 
invested or committed, as the case may be, in such Co-Investment 
Transaction. If any transaction fee is to be held by an Adviser pending 
consummation of the transaction, the fee will be deposited into an 
account maintained by such Adviser at a bank or banks having the 
qualifications prescribed in section 26(a)(1) of the Act, and the 
account will earn a competitive rate of interest that will also be 
divided pro rata among the participating Regulated Funds and Affiliated 
Funds based on the amounts they invest in such Co-Investment 
Transaction. None of the Affiliated Funds, the Advisers, the other 
Regulated Funds or any affiliated person of the Regulated Funds or 
Affiliated Funds will receive additional compensation or remuneration 
of any kind as a result of or in connection with a Co-Investment 
Transaction (other than (a) in the case of the Regulated Funds and the 
Affiliated Funds, the pro rata transaction fees described above and 
fees or other compensation described in Condition 2(c)(iii)(C); and (b) 
in the case of an Adviser, investment advisory fees paid in accordance 
with the agreement between the Adviser and the Regulated Fund or 
Affiliated Fund.
    14. The JMPG Proprietary Accounts will not be permitted to invest 
in a Potential Co-Investment Transaction except to the extent the 
aggregate demand from the Regulated Funds and the other Affiliated 
Funds is less than the total investment opportunity.
    15. Each Adviser will maintain written policies and procedures 
reasonably designed to ensure compliance with the foregoing Conditions. 
These policies and procedures will require, among other things, that 
each Adviser will be notified of all Potential Co-Investment 
Transactions that fall within the then-current Objectives and 
Strategies of any Regulated Fund it advises and will be given 
sufficient information to make its independent determination and 
recommendations under Conditions 1, 2(a), 7 and 8.
    16. If the Holders own in the aggregate more than 25% of the 
outstanding Shares of a Regulated Fund, then the Holders will vote such 
Shares as directed by an independent third party (such as the trustee 
of a voting trust or a proxy adviser) when voting on (1) the election 
of directors; (2) the removal of one or more directors; or (3) any 
matters requiring approval by the vote of a majority of the outstanding 
voting securities, as defined in section 2(a)(42) of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-25760 Filed 10-8-15; 8:45 am]
BILLING CODE 8011-01-P

61262 Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices SECURITIES AND EXCHANGE Floor, New York, NY 10017; Steven LLC, merged with and into JMPG, with COMMISSION Boehm, Esq., and Harry Pangas, Esq., JMPG as the surviving entity. Sutherland Asbill & Brennan LLP, 700 Consequently, JMPG LLC replaced [Release No. IC–31860; File No. 812–14365] Sixth Street NW., Suite 700, JMPG as the publicly traded company, Harvest Capital Credit Corporation, et Washington, DC 20001–3980. and JMPG LLC’s common stock is al.; Notice of Application FOR FURTHER INFORMATION CONTACT: Anil currently listed on the New York Stock K. Abraham, Senior Special Counsel, at Exchange under the symbol ‘‘JMP.’’ October 5, 2015. (202) 551–2614 or James M. Curtis, 3. JMPG LLC is a Delaware limited AGENCY: Securities and Exchange Branch Chief, at (202) 551–6712 (Chief liability company and, together with its Commission (‘‘Commission’’). Counsel’s Office, Division of Investment subsidiaries, is a full-service investment ACTION: Notice of application for an Management). banking and asset management firm that order under sections 17(d) and 57(i) of provides investment banking, sales and SUPPLEMENTARY INFORMATION: The the Investment Company Act of 1940 trading, and equity research services to following is a summary of the (the ‘‘Act’’) and rule 17d–1 under the corporate and institutional clients, and application. The complete application Act to permit certain joint transactions alternative asset management products may be obtained via the Commission’s otherwise prohibited by sections 17(d) and services to institutional investors Web site by searching for the file and 57(a)(4) of the Act and rule 17d–1 and high net-worth individuals. JMPG, number, or for an applicant using the under the Act. JMP Capital, JMP Credit, and JMP Company name box, at http:// Holding are direct or indirect wholly- www.sec.gov/search/search.htm or by SUMMARY OF APPLICATION: Applicants owned subsidiaries of JMPG LLC. request an order to permit a business calling (202) 551–8090. 4. The JMPG Companies, from time to development company (‘‘BDC’’) to co- Applicants’ Representations time, may hold various financial assets invest in portfolio companies with 1. HCC is a Delaware corporation in a principal capacity (together, in such certain affiliated investment funds and organized in February 2011 as a closed- capacity, ‘‘Existing JMPG Proprietary certain affiliated persons’ proprietary Accounts,’’ and together with any end management investment company accounts. Future JMPG Proprietary Account that has elected to be regulated as a BDC APPLICANTS: Harvest Capital Credit under section 54(a) of the Act.1 HCC’s (defined below), the ‘‘JMPG Proprietary Corporation (‘‘HCC’’); HCAP Advisors Objectives and Strategies 2 are to Accounts’’). LLC (the ‘‘BDC Adviser’’); JMP Credit 5. The BDC Adviser and JMPCA are generate both current income and Advisors LLC (‘‘JMPCA’’); JMP Group Delaware limited liability companies capital appreciation primarily by LLC (‘‘JMPG LLC’’), JMP Group Inc. registered with the Commission as making direct investments in the form (‘‘JMPG’’), JMP Capital LLC (‘‘JMP investment advisers under the of subordinated debt, senior debt, and Capital’’), JMP Credit Corporation (‘‘JMP Investment Advisers Act of 1940 (the minority equity investments in Credit’’), and JMP Holding LLC (‘‘JMP ‘‘Advisers Act’’). The BDC Adviser is a privately-held, small to mid-sized U.S. Holding’’ and together with JMPG LLC, majority-owned subsidiary of JMPG companies. The board of directors of JMPG, JMP Capital, and JMP Credit, the LLC. The BDC Adviser serves as HCC (the ‘‘HCC Board,’’ and together ‘‘JMPG Companies’’). investment adviser to HCC and manages with any board of directors of a Future FILING DATES: The application was filed HCC’s portfolio in accordance with Regulated Fund (defined below), the on October 1, 2014, and amended on HCC’s Objectives and Strategies. ‘‘Boards,’’ and each, a ‘‘Board,’’ as February 11, 2015, and June 2, 2015. JMPCA, a wholly-owned subsidiary of applicable) is composed of five HEARING OR NOTIFICATION OF HEARING: JMPG LLC, serves as the administrator directors, three of whom are not An order granting the requested relief to HCC. JMPCA also serves as ‘‘interested persons,’’ as defined in will be issued unless the Commission investment adviser to several section 2(a)(19) of the Act (‘‘Non- orders a hearing. Interested persons may collateralized loan obligation vehicles Interested Directors’’), of HCC. Each request a hearing by writing to the (‘‘CLOs’’) and manages the portfolios of Regulated Fund invests or intends to Commission’s Secretary and serving the CLOs. invest its assets so as to qualify for U.S. 6. Applicants seek an order (‘‘Order’’) applicants with a copy of the request, federal income tax treatment as a to permit one or more Regulated Funds 3 personally or by mail. Hearing requests regulated investment company. and/or one or more Affiliated Funds 4 to should be received by the Commission 2. JMPG was incorporated in by 5:30 p.m. on October 30, 2015, and Delaware in January 2000 and 3 ‘‘Regulated Fund’’ means HCC and any Future should be accompanied by proof of completed its initial public offering in Regulated Fund. ‘‘Future Regulated Fund’’ means service on applicants, in the form of an May 2007. On January 1, 2015, JMP any closed-end management investment company affidavit or, for lawyers, a certificate of Merger Corp., a Delaware corporation (a) that is registered under the Act or has elected to be regulated as BDC, (b) whose investment service. Pursuant to rule 0–5, hearing and wholly-owned subsidiary of JMPG adviser is an Adviser, and (c) that intends to requests should state the nature of the participate in the Co-Investment Program (defined writer’s interest, any facts bearing upon 1 Section 2(a)(48) defines a BDC to be any closed- below). The term ‘‘Adviser’’ means (a) the BDC the desirability of a hearing on the end investment company that operates for the Adviser and JMPCA and (b) any future investment purpose of making investments in securities adviser that controls, is controlled by or is under matter, the reason for the request, and described in sections 55(a)(1) through 55(a)(3) of the common control with JMPG LLC and is registered the issues contested. Persons who wish Act and makes available significant managerial as an investment adviser under the Advisers Act. to be notified of a hearing may request assistance with respect to the issuers of such 4 ‘‘Affiliated Fund’’ means the Existing JMPG notification by writing to the securities. Proprietary Accounts, any Future JMPG Proprietary 2 ‘‘Objectives and Strategies’’ means a Regulated Accounts, and any Future Affiliated Funds. ‘‘Future tkelley on DSK3SPTVN1PROD with NOTICES Commission’s Secretary. Fund’s (defined below) investment objectives and JMPG Proprietary Account’’ means any direct or ADDRESSES: Brent J. Fields, Secretary, strategies, as described in the Regulated Fund’s indirect, wholly- or majority-owned subsidiary of U.S. Securities and Exchange registration statement on Form N–2, other filings JMPG LLC that is formed in the future and, from Commission, 100 F St. NE., Washington, the Regulated Fund has made with the Commission time to time, may hold various financial assets in under the Securities Act of 1933 (the ‘‘Securities a principal capacity. ‘‘Future Affiliated Fund’’ DC 20549–1090. Applicants: Richard Act’’), or under the Securities Exchange Act of means any entity (a) whose investment adviser is Buckanavage, Harvest Capital Credit 1934, and the Regulated Fund’s reports to an Adviser, (b) that would be an investment Corporation, 767 Third Avenue, 25th shareholders. company but for section 3(c)(1) or 3(c)(7) of the Act, VerDate Sep<11>2014 17:44 Oct 08, 2015 Jkt 238001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\09OCN1.SGM 09OCN1

Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices 61263 participate in the same investment participation in any such transaction be Transaction prior to any investment by opportunities through a co-investment treated, for purposes of the requested the participating Regulated Fund. program (the ‘‘Co-Investment Program’’) Order, as though the parent Regulated 10. With respect to the pro rata where such participation would Fund were participating directly. dispositions and Follow-On Investments otherwise be prohibited by section 17(d) Applicants represent that this treatment provided in Conditions 7 and 8, a or section 57(a)(4) and rule 17d–1 by (a) is justified because a Wholly-Owned Regulated Fund may participate in a pro co-investing with each other in Investment Sub would have no purpose rata disposition or Follow-On securities issued by issuers in private other than serving as a holding vehicle Investment without obtaining prior placement transactions in which an for the Regulated Fund’s investments, approval of the Required Majority if, Adviser negotiates terms in addition to and, therefore, no conflicts of interest among other things: (i) The proposed price; 5 and (b) making additional could arise between the Regulated Fund participation of each Regulated Fund investments in securities of such and the Wholly-Owned Investment Sub. and Affiliated Fund in such disposition issuers, including through the exercise The Regulated Fund’s Board would is proportionate to its outstanding of warrants, conversion privileges, and make all relevant determinations under investments in the issuer immediately other rights to purchase securities of the the Conditions with regard to a Wholly- preceding the disposition or Follow-On issuers (‘‘Follow-On Investments’’). ‘‘Co- Owned Investment Sub’s participation Investment, as the case may be; and (ii) Investment Transaction’’ means any in a Co-Investment Transaction, and the the Board of the Regulated Fund has transaction in which a Regulated Fund Regulated Fund’s Board would be approved that Regulated Fund’s (or its Wholly-Owned Investment Sub, informed of, and take into participation in pro rata dispositions as defined below) has participated consideration, any proposed use of a and Follow-On Investments as being in together with one or more other Wholly-Owned Investment Sub in the the best interests of the Regulated Fund. Regulated Funds and/or one or more Regulated Fund’s place. If the Regulated If the Board does not so approve, any Affiliated Funds in reliance on the Fund proposes to participate in the such disposition or Follow-On requested Order. ‘‘Potential Co- same Co-Investment Transaction with Investment will be submitted to the Investment Transaction’’ means any any of its Wholly-Owned Investment Regulated Fund’s Eligible Directors. The investment opportunity in which a Subs, the Board of the Regulated Fund Board of any Regulated Fund may at any Regulated Fund (or its Wholly-Owned will also be informed of, and take into time rescind, suspend or qualify its Investment Sub) could not participate consideration, the relative participation approval of pro rata dispositions and together with one or more Affiliated of the Regulated Fund and the Wholly- Follow-On Investments with the result Funds and/or one or more other Owned Investment Sub. that all dispositions and/or Follow-On Regulated Funds without obtaining and Investments must be submitted to the 8. When considering Potential Co- Eligible Directors. relying on the Order.6 7. Applicants state that a Regulated Investment Transactions for any 11. No Non-Interested Director of a Fund may, from time to time, form one Regulated Fund, the applicable Adviser Regulated Fund will have a financial or more Wholly-Owned Investment will consider only the Objectives and interest in any Co-Investment Subs.7 Such a subsidiary would be Strategies, investment policies, Transaction, other than through share prohibited from investing in a Co- investment positions, capital available ownership in one of the Regulated Investment Transaction with any for investment, and other pertinent Funds. Affiliated Fund or Regulated Fund factors applicable to that Regulated Fund. The Regulated Fund Advisers Applicants’ Legal Analysis because it would be a company controlled by its parent Regulated Fund expect that any portfolio company that 1. Section 57(a)(4) of the Act prohibits for purposes of section 57(a)(4) and rule is an appropriate investment for a certain affiliated persons of a BDC from 17d–1. Applicants request that each Regulated Fund should also be an participating in joint transactions with Wholly-Owned Investment Sub be appropriate investment for one or more the BDC or a company controlled by a permitted to participate in Co- other Regulated Funds and/or one or BDC in contravention of rules as Investment Transactions in lieu of its more Affiliated Funds, with certain prescribed by the Commission. Under parent Regulated Fund and that the exceptions based on available capital or section 57(b)(2) of the Act, any person Wholly-Owned Investment Sub’s diversification.8 who is directly or indirectly controlling, 9. Other than pro rata dispositions controlled by, or under common control and (c) that intends to participate in the Co- and Follow-On Investments as provided with a BDC is subject to section 57(a)(4). Investment Program. in Conditions 7 and 8, and after making Applicants submit that each of the 5 The term ‘‘private placement transactions’’ the determinations required in Regulated Funds and Affiliated Funds means transactions in which the offer and sale of could be deemed to be a person related securities by the issuer are exempt from registration Conditions 1 and 2(a), the Adviser will under the Securities Act. present each Potential Co-Investment to each Regulated Fund in a manner 6 All existing entities that currently intend to rely Transaction and the proposed allocation described by section 57(b) by virtue of upon the requested Order have been named as to the directors of the Board eligible to being under common control. Section applicants. Any other existing or future entity that vote under section 57(o) of the Act 57(i) of the Act provides that, until the subsequently relies on the Order will comply with Commission prescribes rules under the terms and conditions of the application. (‘‘Eligible Directors’’), and the ‘‘required 7 The term ‘‘Wholly-Owned Investment Sub’’ majority,’’ as defined in section 57(o) of section 57(a)(4), the Commission’s rules means an entity (i) that is wholly-owned by a the Act (‘‘Required Majority’’) 9 will under section 17(d) of the Act Regulated Fund (with the Regulated Fund at all approve each Co-Investment applicable to registered closed-end times holding, beneficially and of record, 100% of investment companies will be deemed the voting and economic interests); (ii) whose sole tkelley on DSK3SPTVN1PROD with NOTICES business purpose is to hold one or more 8 The Regulated Funds, however, will not be to apply to transactions subject to investments on behalf of the Regulated Fund; (iii) obligated to invest, or co-invest, when investment section 57(a)(4). Because the with respect to which the Regulated Fund’s Board opportunities are referred to them. Commission has not adopted any rules has the sole authority to make all determinations 9 In the case of a Regulated Fund that is a under section 57(a)(4), rule 17d–1 also with respect to the entity’s participation under the registered closed-end fund, the Board members that conditions of the application; and (iv) that would make up the Required Majority will be determined applies to joint transactions with be an investment company but for section 3(c)(1) or as if the Regulated Fund were a BDC subject to Regulated Funds that are BDCs. Section 3(c)(7) of the Act. section 57(o). 17(d) of the Act and rule 17d–1 under VerDate Sep<11>2014 17:44 Oct 08, 2015 Jkt 238001 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 E:\FR\FM\09OCN1.SGM 09OCN1

61264 Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices the Act are applicable to Regulated Applicants represent that the Non- Investment Transaction, a Required Funds that are registered closed-end Interested Directors shall evaluate and Majority concludes that: investment companies. approve any such voting trust or proxy (i) the terms of the Potential Co- 2. Section 17(d) of the Act and rule adviser, taking into account its Investment Transaction, including the 17d–1 under the Act prohibit affiliated qualifications, reputation for consideration to be paid, are reasonable persons of a registered investment independence, cost to the shareholders, and fair to the Regulated Fund and its company from participating in joint and other factors that they deem shareholders and do not involve transactions with the company unless relevant. overreaching in respect of the Regulated the Commission has granted an order Fund or its shareholders on the part of permitting such transactions. In passing Applicants’ Conditions any person concerned; upon applications under rule 17d–1, the Applicants agree that the Order will (ii) the Potential Co-Investment Commission considers whether the be subject to the following Conditions: Transaction is consistent with: company’s participation in the joint 1. Each time an Adviser considers a (A) the interests of the shareholders of transaction is consistent with the Potential Co-Investment Transaction for the Regulated Fund; and provisions, policies, and purposes of the an Affiliated Fund or another Regulated (B) the Regulated Fund’s then-current Act and the extent to which such Fund that falls within a Regulated Objectives and Strategies; participation is on a basis different from Fund’s then-current Objectives and (iii) the investment by any other or less advantageous than that of other Strategies, the Regulated Fund’s Adviser Regulated Funds or Affiliated Funds participants. will make an independent would not disadvantage the Regulated 3. Applicants state that in the absence determination of the appropriateness of Fund, and participation by the of the requested relief, the Regulated the investment for such Regulated Fund Regulated Fund would not be on a basis Funds would be, in some in light of the Regulated Fund’s then- different from or less advantageous than circumstances, limited in their ability to current circumstances. that of other Regulated Funds or participate in attractive and appropriate 2. (a) If the Adviser deems a Regulated Affiliated Funds; provided that, if any investment opportunities. Applicants Fund’s participation in any Potential other Regulated Fund or Affiliated believe that the proposed terms and Co-Investment Transaction to be Fund, but not the Regulated Fund itself, conditions will ensure that the Co- appropriate for the Regulated Fund, it gains the right to nominate a director for Investment Transactions are consistent will then determine an appropriate level election to a portfolio company’s board with the protection of each Regulated of investment for the Regulated Fund. of directors or the right to have a board Fund’s shareholders and with the (b) If the aggregate amount observer or any similar right to purposes intended by the policies and recommended by the applicable Adviser participate in the governance or provisions of the Act. Applicants state to be invested by the applicable management of the portfolio company, that the Regulated Funds’ participation Regulated Fund in the Potential Co- such event shall not be interpreted to in the Co-Investment Transactions will Investment Transaction, together with prohibit the Required Majority from be consistent with the provisions, the amount proposed to be invested by reaching the conclusions required by policies, and purposes of the Act and on the other participating Regulated Funds this Condition (2)(c)(iii), if: a basis that is not different from or less and Affiliated Funds, collectively, in the (A) the Eligible Directors will have the advantageous than that of other same transaction, exceeds the amount of right to ratify the selection of such participants. the investment opportunity, the director or board observer, if any; 4. Under Condition 16 below, if the investment opportunity will be (B) the applicable Adviser agrees to, Advisers, the principals of any of the allocated among them pro rata based on and does, provide periodic reports to Advisers (the ‘‘Principals’’), or any each participant’s capital available for the Regulated Fund’s Board with respect person controlling, controlled by, or investment in the asset class being to the actions of such director or the under common control with the allocated, up to the amount proposed to information received by such board Advisers or the Principals, and the be invested by each. The applicable observer or obtained through the Affiliated Funds (collectively, the Adviser will provide the Eligible exercise of any similar right to ‘‘Holders’’) own in the aggregate more Directors of each participating participate in the governance or than 25 percent of the outstanding Regulated Fund with information management of the portfolio company; voting shares of a Regulated Fund (the concerning each participating party’s and ‘‘Shares’’), then the Holders will vote available capital to assist the Eligible (C) any fees or other compensation such Shares as directed by an Directors with their review of the that any Affiliated Fund or any independent third party (such as the Regulated Fund’s investments for Regulated Fund or any affiliated person trustee of a voting trust or a proxy compliance with these allocation of any Affiliated Fund or any Regulated adviser) when voting on (1) the election procedures. Fund receives in connection with the of directors; (2) the removal of one or (c) After making the determinations right of an Affiliated Fund or a more directors; or (3) any matters required in Conditions 1 and 2(a), the Regulated Fund to nominate a director requiring approval by the vote of a applicable Adviser will distribute or appoint a board observer or otherwise majority of the outstanding voting written information concerning the to participate in the governance or securities, as defined in section 2(a)(42) Potential Co-Investment Transaction management of the portfolio company of the Act. Applicants believe that this (including the amount proposed to be will be shared proportionately among Condition will ensure that the Non- invested by each participating Regulated the participating Affiliated Funds (who Interested Directors will act Fund and Affiliated Fund) to the each may, in turn, share its portion with tkelley on DSK3SPTVN1PROD with NOTICES independently in evaluating the Co- Eligible Directors of each participating its affiliated persons) and the Investment Program, because the ability Regulated Fund for their consideration. participating Regulated Funds in of the Advisers or the Principals to A Regulated Fund will co-invest with proportion to the amount of each party’s influence the Non-Interested Directors one or more other Regulated Funds and/ investment; and by a suggestion, explicit or implied, that or one or more Affiliated Funds only if, (iv) the proposed investment by the the Non-Interested Directors can be prior to the Regulated Fund’s Regulated Fund will not benefit the removed will be limited significantly. participation in the Potential Co- Advisers, the Affiliated Funds or the VerDate Sep<11>2014 17:44 Oct 08, 2015 Jkt 238001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 E:\FR\FM\09OCN1.SGM 09OCN1

Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices 61265 other Regulated Funds or any affiliated 7. (a) If any Affiliated Fund or any Majority if: (i) The proposed person of any of them (other than the Regulated Fund elects to sell, exchange participation of each Regulated Fund parties to the Co-Investment or otherwise dispose of an interest in a and each Affiliated Fund in such Transaction), except (A) to the extent security that was acquired in a Co- investment is proportionate to its permitted by Condition 13, (B) to the Investment Transaction, the applicable outstanding investments in the issuer extent permitted by section 17(e) or Advisers will: immediately preceding the Follow-On 57(k) of the Act, as applicable, (C) (i) notify each Regulated Fund that Investment; and (ii) the Board of the indirectly, as a result of an interest in participated in the Co-Investment Regulated Fund has approved as being the securities issued by one of the Transaction of the proposed disposition in the best interests of the Regulated parties to the Co-Investment at the earliest practical time; and Fund the ability to participate in Transaction, or (D) in the case of fees or (ii) formulate a recommendation as to Follow-On Investments on a pro rata other compensation described in participation by each Regulated Fund in basis (as described in greater detail in Condition 2(c)(iii)(C). the disposition. the application). In all other cases, the 3. Each Regulated Fund has the right (b) Each Regulated Fund will have the Adviser will provide its written to decline to participate in any Potential right to participate in such disposition recommendation as to the Regulated Co-Investment Transaction or to invest on a proportionate basis, at the same Fund’s participation to the Eligible less than the amount proposed. price and on the same terms and Directors, and the Regulated Fund will 4. The applicable Adviser will present conditions as those applicable to the participate in such Follow-On to the Board of each Regulated Fund, on participating Affiliated Funds and Investment solely to the extent that a a quarterly basis, a record of all Regulated Funds. Required Majority determines that it is investments in Potential Co-Investment (c) A Regulated Fund may participate in the Regulated Fund’s best interests. Transactions made by any of the other in such disposition without obtaining (c) If, with respect to any Follow-On Regulated Funds or Affiliated Funds prior approval of the Required Majority Investment: during the preceding quarter that fell if: (i) The proposed participation of each (i) the amount of the opportunity is within the Regulated Fund’s then- Regulated Fund and each Affiliated not based on the Regulated Funds’ and current Objectives and Strategies that Fund in such disposition is the Affiliated Funds’ outstanding were not made available to the proportionate to its outstanding investments immediately preceding the Regulated Fund, and an explanation of investments in the issuer immediately Follow-On Investment; and why the investment opportunities were preceding the disposition; (ii) the Board (ii) the aggregate amount not offered to the Regulated Fund. All of the Regulated Fund has approved as recommended by the Adviser to be information presented to the Board being in the best interests of the invested by each Regulated Fund in the pursuant to this Condition will be kept Regulated Fund the ability to participate Follow-On Investment, together with in such dispositions on a pro rata basis the amount proposed to be invested by for the life of the Regulated Fund and (as described in greater detail in the the participating Affiliated Funds in the at least two years thereafter, and will be application); and (iii) the Board of the same transaction, exceeds the amount of subject to examination by the Regulated Fund is provided on a the opportunity; then the amount Commission and its staff. quarterly basis with a list of all invested by each such party will be 5. Except for Follow-On Investments dispositions made in accordance with allocated among them pro rata based on made in accordance with Condition 8,10 this Condition. In all other cases, the each participant’s capital available for a Regulated Fund will not invest in Adviser will provide its written investment in the asset class being reliance on the Order in any issuer in recommendation as to the Regulated allocated, up to the amount proposed to which another Regulated Fund, Fund’s participation to the Eligible be invested by each. Affiliated Fund, or any affiliated person (d) The acquisition of Follow-On of another Regulated Fund or Affiliated Directors, and the Regulated Fund will participate in such disposition solely to Investments as permitted by this Fund is an existing investor. Condition will be considered a Co- 6. A Regulated Fund will not the extent that a Required Majority determines that it is in the Regulated Investment Transaction for all purposes participate in any Potential Co- and subject to the other Conditions set Investment Transaction unless the Fund’s best interests. (d) Each Affiliated Fund and each forth in this application. terms, conditions, price, class of 9. The Non-Interested Directors of securities to be purchased, settlement Regulated Fund will bear its own expenses in connection with any such each Regulated Fund will be provided date, and registration rights will be the quarterly for review all information same for each participating Regulated disposition. 8. (a) If any Affiliated Fund or any concerning Potential Co-Investment Fund and Affiliated Fund. The grant to Transactions and Co-Investment an Affiliated Fund or another Regulated Regulated Fund desires to make a Follow-On Investment in a portfolio Transactions, including investments Fund, but not the Regulated Fund, of made by other Regulated Funds or the right to nominate a director for company whose securities were acquired in a Co-Investment Affiliated Funds that the Regulated election to a portfolio company’s board Fund considered but declined to of directors, the right to have an Transaction, the applicable Advisers will: participate in, so that the Non-Interested observer on the board of directors or Directors may determine whether all (i) Notify each Regulated Fund that similar rights to participate in the investments made during the preceding participated in the Co-Investment governance or management of the quarter, including those investments Transaction of the proposed transaction portfolio company will not be that the Regulated Fund considered but at the earliest practical time; and interpreted so as to violate this tkelley on DSK3SPTVN1PROD with NOTICES (ii) formulate a recommendation as to declined to participate in, comply with Condition 6, if Conditions 2(c)(iii)(A), the proposed participation, including the Conditions of the Order. In addition, (B) and (C) are met. the amount of the proposed Follow-On the Non-Interested Directors will 10 This exception applies only to Follow-On Investment, by each Regulated Fund. consider at least annually the continued Investments by a Regulated Fund in issuers in (b) A Regulated Fund may participate appropriateness for the Regulated Fund which that Regulated Fund already holds in such Follow-On Investment without of participating in new and existing Co- investments. obtaining prior approval of the Required Investment Transactions. VerDate Sep<11>2014 17:44 Oct 08, 2015 Jkt 238001 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 E:\FR\FM\09OCN1.SGM 09OCN1

61266 Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices 10. Each Regulated Fund will between the Adviser and the Regulated 409 3rd Street SW., Office of maintain the records required by section Fund or Affiliated Fund. Performance Management and Chief 57(f)(3) of the Act as if each of the 14. The JMPG Proprietary Accounts Financial Officer Conference Room, 6th Regulated Funds were a BDC and each will not be permitted to invest in a Floor, Washington, DC 20416. of the investments permitted under Potential Co-Investment Transaction SUPPLEMENTARY INFORMATION: Pursuant these Conditions were approved by the except to the extent the aggregate to section 10(a)(2) of the Federal Required Majority under section 57(f) of demand from the Regulated Funds and Advisory Committee Act (5 U.S.C., the Act. the other Affiliated Funds is less than Appendix 2), SBA announces the 11. No Non-Interested Director of a the total investment opportunity. meeting of the AFMAC. The AFMAC is Regulated Fund will also be a director, 15. Each Adviser will maintain tasked with providing recommendation general partner, managing member or written policies and procedures and advice regarding the Agency’s principal, or otherwise an ‘‘affiliated reasonably designed to ensure financial management, including the person’’ (as defined in the Act) of an compliance with the foregoing financial reporting process, systems of Affiliated Fund. Conditions. These policies and internal controls, audit process and 12. The expenses, if any, associated procedures will require, among other process for monitoring compliance with with acquiring, holding or disposing of things, that each Adviser will be relevant laws and regulations. any securities acquired in a Co- notified of all Potential Co-Investment The purpose of the meeting is to Investment Transaction (including, Transactions that fall within the then- discuss the SBA’s Financial Reporting, without limitation, the expenses of the current Objectives and Strategies of any Audit Findings Remediation, Ongoing distribution of any such securities Regulated Fund it advises and will be OIG Audits including the Information registered for sale under the Securities given sufficient information to make its Technology Audit, FMFIA Assurance/ Act) will, to the extent not payable by independent determination and A–123 Internal Control Program, Credit the Advisers under their respective recommendations under Conditions 1, 2(a), 7 and 8. Modeling, Performance Management, investment advisory agreements with Affiliated Funds and the Regulated 16. If the Holders own in the aggregate Acquisition Division Update, Improper Funds, be shared by the Regulated more than 25% of the outstanding Payments and current initiatives. Funds and the Affiliated Funds in Shares of a Regulated Fund, then the FOR FURTHER INFORMATION CONTACT: The proportion to the relative amounts of the Holders will vote such Shares as meeting is open to the public, however securities held or to be acquired or directed by an independent third party advance notice of attendance is disposed of, as the case may be. (such as the trustee of a voting trust or requested. Anyone wishing to attend 13. Any transaction fee (including a proxy adviser) when voting on (1) the and/or make a presentation to the break-up or commitment fees but election of directors; (2) the removal of AFMAC must contact Tami Perriello by excluding broker’s fees contemplated by one or more directors; or (3) any matters fax or email, in order to be placed on the section 17(e) or 57(k) of the Act, as requiring approval by the vote of a agenda. Tami Perriello, Chief Financial applicable), received in connection with majority of the outstanding voting Officer, 409 3rd Street SW., 6th Floor, a Co-Investment Transaction will be securities, as defined in section 2(a)(42) Washington, DC 20416, phone: (202) distributed to the participating of the Act. 205–6449, fax: (202) 481–6194, email: Regulated Funds and Affiliated Funds For the Commission, by the Division of tami.perriello@sba.gov. on a pro rata basis based on the amounts Investment Management, under delegated Additionally, if you need they invested or committed, as the case authority. accommodations because of a disability may be, in such Co-Investment Robert W. Errett, or require additional information, please Transaction. If any transaction fee is to Deputy Secretary. contact Donna Wood at (202) 619–1608, be held by an Adviser pending [FR Doc. 2015–25760 Filed 10–8–15; 8:45 am] email: Donna.Wood@sba.gov; SBA, consummation of the transaction, the Office of Chief Financial Officer, 409 BILLING CODE 8011–01–P fee will be deposited into an account 3rd Street SW., Washington, DC 20416. maintained by such Adviser at a bank or For more information, please visit our banks having the qualifications Web site at http://www.sba.gov/ prescribed in section 26(a)(1) of the Act, SMALL BUSINESS ADMINISTRATION aboutsba/sbaprograms/cfo/index.html. and the account will earn a competitive Audit and Financial Management Dated: September 30, 2015. rate of interest that will also be divided Advisory Committee (AFMAC) Miguel L’Heureux, pro rata among the participating AGENCY: U.S. Small Business White House Liaison. Regulated Funds and Affiliated Funds based on the amounts they invest in Administration. [FR Doc. 2015–25821 Filed 10–8–15; 8:45 am] such Co-Investment Transaction. None ACTION: Notice of open Federal advisory BILLING CODE 8025–01–P of the Affiliated Funds, the Advisers, committee meeting. the other Regulated Funds or any affiliated person of the Regulated Funds SUMMARY: The SBA is issuing this notice SMALL BUSINESS ADMINISTRATION or Affiliated Funds will receive to announce the location, date, time, and agenda for the next meeting of the Reporting and Recordkeeping additional compensation or Audit and Financial Management Requirements Under OMB Review remuneration of any kind as a result of or in connection with a Co-Investment Advisory Committee (AFMAC). AGENCY: Small Business Administration. Transaction (other than (a) in the case The meeting will be open to the public. ACTION: 30-Day notice. tkelley on DSK3SPTVN1PROD with NOTICES of the Regulated Funds and the Affiliated Funds, the pro rata DATES: The meeting will be held on SUMMARY: The Small Business transaction fees described above and Thursday, October 29, 2015, starting at Administration (SBA) is publishing this fees or other compensation described in 1:00 p.m. until approximately 3:00 p.m. notice to comply with requirements of Condition 2(c)(iii)(C); and (b) in the case Eastern Time. the Paperwork Reduction Act (PRA) (44 of an Adviser, investment advisory fees ADDRESSES: The meeting will be held at U.S.C. Chapter 35), which requires paid in accordance with the agreement the U.S. Small Business Administration, agencies to submit proposed reporting VerDate Sep<11>2014 17:44 Oct 08, 2015 Jkt 238001 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 E:\FR\FM\09OCN1.SGM 09OCN1


Document Created: 2015-12-15 08:33:35
Document Modified: 2015-12-15 08:33:35
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ``Act'') and rule 17d- 1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 under the Act.
DatesThe application was filed on October 1, 2014, and amended on February 11, 2015, and June 2, 2015.
ContactAnil K. Abraham, Senior Special Counsel, at (202) 551-2614 or James M. Curtis, Branch Chief, at (202) 551-6712 (Chief Counsel's Office, Division of Investment Management).
FR Citation80 FR 61262 
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR