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]]

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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.

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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.
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    \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.
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    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\
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    \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.
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    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.
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    \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.
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    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\
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    \8\ The Regulated Funds, however, will not be obligated to 
invest, or co-invest, when investment opportunities are referred to 
them.
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    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.
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    \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).
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    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.
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    \10\ This exception applies only to Follow-On Investments by a 
Regulated Fund in issuers in which that Regulated Fund already holds 
investments.
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    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
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                                              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,



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                                                                              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
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                                              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


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                                              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
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                                              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


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                                                                             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
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                                                                                                         (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.


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                                              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.
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                                              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


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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 

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