80 FR 70017 - Wildermuth Endowment Strategy Fund and Wildermuth Advisory, LLC; Notice of Application
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 218 (November 12, 2015)
Federal Register Volume 80, Issue 218 (November 12, 2015)
| Page Range | 70017-70019 | |
| FR Document | 2015-28696 |
[Federal Register Volume 80, Number 218 (Thursday, November 12, 2015)] [Notices] [Pages 70017-70019] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-28696] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 31896; File No. 812-14534] Wildermuth Endowment Strategy Fund and Wildermuth Advisory, LLC; Notice of Application November 5, 2015. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ``Act'') for an exemption from sections 18(c) and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for an exemption from rule 23c-3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d-1 under the Act. ----------------------------------------------------------------------- Summary of Application: Applicants request an order to permit certain registered closed-end management investment companies to issue multiple classes of shares and to impose asset-based distribution fees and early withdrawal charges (``EWCs''). Applicants: Wildermuth Endowment Strategy Fund (the ``Fund'') and Wildermuth Advisory, LLC (the ``Adviser''). Filing Dates: The application was filed on August 13, 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 November 30, 2015, and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants: Wildermuth Endowment Strategy Fund and Wildermuth Advisory, LLC, c/o David J. Baum, Esq. Alston & Bird, LLC, 950 F Street NW., Washington, DC 20004. FOR FURTHER INFORMATION CONTACT: Kaitlin C. Bottock, Senior Counsel, at (202) 551-8658, or Daniele Marchesani, Branch Chief, at (202) 551- 6821 (Division of Investment Management, Chief Counsel's Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090. Applicants' Representations 1. The Fund is a Delaware statutory trust that is registered under the Act as a non-diversified, closed-end management investment company. The Fund's investment objective is to seek total return through a combination of long-term capital appreciation and income generation. 2. The Adviser is a Delaware limited liability company and is registered as an investment adviser under the Investment Advisers Act of 1940. The Adviser serves as investment adviser to the Fund. 3. The applicants seek an order to permit the Fund to issue multiple classes of shares, each having its own fee and expense structure, and to impose asset-based distribution fees and EWCs. 4. Applicants request that the order also apply to any continuously-offered registered closed-end management investment company that has been previously organized or that may be organized in the future for which the Adviser or any entity controlling, controlled by, or under common control with the Adviser, or any successor in interest to any such entity,\1\ acts as investment adviser and which operates as an interval fund pursuant to rule 23c-3 under the Act or provides periodic liquidity with respect to its shares pursuant to rule 13e-4 under the Securities Exchange Act of 1934 (``Exchange Act'') (each, a ``Future Fund'' and together with the Fund, the ``Funds'').\2\ --------------------------------------------------------------------------- \1\ A successor in interest is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. \2\ Any Fund relying on this relief in the future will do so in a manner consistent with the terms and conditions of the application. Applicants represent that each entity presently intending to rely on the requested relief is listed as an applicant. --------------------------------------------------------------------------- 5. The Fund is currently making a continuous public offering of its common shares. Applicants state that additional offerings by any Fund relying on the order may be on a private placement or public offering basis. Shares of the Funds will not be listed on any securities exchange, nor quoted on any quotation medium. The Funds do not expect there to be a secondary trading market for their shares. 6. If the requested relief is granted, the Fund intends to redesignate its common shares as ``Class A Shares'' and to continuously offer ``Class C Shares'', and may also offer additional classes of shares in the future. Because of the different distribution fees, services and any other class expenses that may be attributable to the Class A Shares and [[Page 70018]] Class C Shares, the net income attributable to, and the dividends payable on, each class of shares may differ from each other. 7. Applicants state that, from time to time, the Fund may create additional classes of shares, the terms of which may differ from the Class A and Class C Shares in the following respects: (i) The amount of fees permitted by different distribution plans or different service fee arrangements; (ii) voting rights with respect to a distribution plan of a class; (iii) different class designations; (iv) the impact of any class expenses directly attributable to a particular class of shares allocated on a class basis as described in the application; (v) any differences in dividends and net asset value resulting from differences in fees under a distribution plan or in class expenses; (vi) any EWC or other sales load structure; and (vii) exchange or conversion privileges of the classes as permitted under the Act. 8. Applicants state that the Fund has adopted a fundamental policy to repurchase a specified percentage of its shares (no less than 5%) at net asset value on a quarterly basis. Such repurchase offers will be conducted pursuant to rule 23c-3 under the Act. Each of the other Funds will likewise adopt fundamental investment policies in compliance with rule 23c-3 and make quarterly repurchase offers to its shareholders or provide periodic liquidity with respect to its shares pursuant to rule 13e-4 under the Exchange Act.\3\ Any repurchase offers made by the Funds will be made to all holders of shares of each such Fund. --------------------------------------------------------------------------- \3\ Applicants submit that rule 23c-3 and Regulation M under the Exchange Act permit an interval fund to make repurchase offers to repurchase its shares while engaging in a continuous offering of its shares pursuant to Rule 415 under the Securities Act of 1933. --------------------------------------------------------------------------- 9. Applicants represent that any asset-based service and distribution fees for each class of shares will comply with the provisions of NASD Rule 2830(d) (``NASD Sales Charge Rule'').\4\ Applicants also represent that each Fund will disclose in its prospectus the fees, expenses and other characteristics of each class of shares offered for sale by the prospectus, as is required for open- end multiple class funds under Form N-1A. As is required for open-end funds, each Fund will disclose its expenses in shareholder reports, and describe any arrangements that result in breakpoints in or elimination of sales loads in its prospectus.\5\ In addition, applicants will comply with applicable enhanced fee disclosure requirements for fund of funds, including registered funds of hedge funds.\6\ --------------------------------------------------------------------------- \4\ Any reference to the NASD Sales Charge Rule includes any successor or replacement rule that may be adopted by the Financial Industry Regulatory Authority (``FINRA''). \5\ See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies, Investment Company Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring open-end investment companies to disclose fund expenses in shareholder reports); and Disclosure of Breakpoint Discounts by Mutual Funds, Investment Company Act Release No. 26464 (June 7, 2004) (adopting release) (requiring open-end investment companies to provide prospectus disclosure of certain sales load information). \6\ Fund of Funds Investments, Investment Company Act Rel. Nos. 26198 (Oct. 1, 2003) (proposing release) and 27399 (Jun. 20, 2006) (adopting release). See also Rules 12d1-1, et seq. of the Act. --------------------------------------------------------------------------- 10. Each of the Funds will comply with any requirements that the Commission or FINRA may adopt regarding disclosure at the point of sale and in transaction confirmations about the costs and conflicts of interest arising out of the distribution of open-end investment company shares, and regarding prospectus disclosure of sales loads and revenue sharing arrangements, as if those requirements applied to the Fund. In addition, each Fund will contractually require that any distributor of the Fund's shares comply with such requirements in connection with the distribution of such Fund's shares. 11. Each Fund will allocate all expenses incurred by it among the various classes of shares based on the net assets of the Fund attributable to each class, except that the net asset value and expenses of each class will reflect distribution fees, service fees, and any other incremental expenses of that class. Expenses of the Fund allocated to a particular class of shares will be borne on a pro rata basis by each outstanding share of that class. Applicants state that each Fund will comply with the provisions of rule 18f-3 under the Act as if it were an open-end investment company. 12. Applicants state that each Fund may impose an EWC on shares submitted for repurchase that have been held less than a specified period and may waive the EWC for certain categories of shareholders or transactions to be established from time to time. Applicants state that each of the Funds will apply the EWC (and any waivers or scheduled variations of the EWC) uniformly to all shareholders in a given class and consistently with the requirements of rule 22d-1 under the Act as if the Funds were open-end investment companies. 13. Each Fund operating as an interval fund pursuant to rule 23c-3 under the Act may offer its shareholders an exchange feature under which the shareholders of the Fund may, in connection with the Fund's periodic repurchase offers, exchange their shares of the Fund for shares of the same class of (i) registered open-end investment companies or (ii) other registered closed-end investment companies that comply with rule 23c-3 under the Act and continuously offer their shares at net asset value, that are in the Fund's group of investment companies (collectively, ``Other Funds''). Shares of a Fund operating pursuant to rule 23c-3 that are exchanged for shares of Other Funds will be included as part of the amount of the repurchase offer amount for such Fund as specified in rule 23c-3 under the Act. Any exchange option will comply with rule 11a-3 under the Act, as if the Fund were an open-end investment company subject to rule 11a-3. In complying with rule 11a-3, each Fund will treat an EWC as if it were a contingent deferred sales load (``CDSL''). Applicants' Legal Analysis Multiple Classes of Shares 1. Section 18(c) of the Act provides, in relevant part, that a closed-end investment company may not issue or sell any senior security if, immediately thereafter, the company has outstanding more than one class of senior security. Applicants state that the creation of multiple classes of shares of the Funds may be prohibited by section 18(c), as a class may have priority over another class as to payment of dividends because shareholders of different classes would pay different fees and expenses. 2. Section 18(i) of the Act provides that each share of stock issued by a registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants state that multiple classes of shares of the Funds may violate section 18(i) of the Act because each class would be entitled to exclusive voting rights with respect to matters solely related to that class. 3. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction or any class or classes of persons, securities or transactions from any provision of the Act, or from any rule or regulation under the Act, if and to the extent such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants request an exemption under section 6(c) [[Page 70019]] from sections 18(c) and 18(i) to permit the Funds to issue multiple classes of shares. 4. Applicants submit that the proposed allocation of expenses relating to distribution and voting rights among multiple classes is equitable and will not discriminate against any group or class of shareholders. Applicants submit that the proposed arrangements would permit a Fund to facilitate the distribution of its shares and provide investors with a broader choice of shareholder services. Applicants assert that the proposed closed-end investment company multiple class structure does not raise the concerns underlying section 18 of the Act to any greater degree than open-end investment companies' multiple class structures that are permitted by rule 18f-3 under the Act. Applicants state that each Fund will comply with the provisions of rule 18f-3 as if it were an open-end investment company. Early Withdrawal Charges 1. Section 23(c) of the Act provides, in relevant part, that no registered closed-end investment company shall purchase securities of which it is the issuer, except: (a) On a securities exchange or other open market; (b) pursuant to tenders, after reasonable opportunity to submit tenders given to all holders of securities of the class to be purchased; or (c) under other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors. 2. Rule 23c-3 under the Act permits a registered closed-end investment company (an ``interval fund'') to make repurchase offers of between five and twenty-five percent of its outstanding shares at net asset value at periodic intervals pursuant to a fundamental policy of the interval fund. Rule 23c-3(b)(1) under the Act permits an interval fund to deduct from repurchase proceeds only a repurchase fee, not to exceed two percent of the proceeds, that is paid to the interval fund and is reasonably intended to compensate the fund for expenses directly related to the repurchase. 3. Section 23(c)(3) provides that the Commission may issue an order that would permit a closed-end investment company to repurchase its shares in circumstances in which the repurchase is made in a manner or on a basis that does not unfairly discriminate against any holders of the class or classes of securities to be purchased. 4. Applicants request relief under section 6(c), discussed above, and section 23(c)(3) from rule 23c-3 to the extent necessary for the Funds to impose EWCs on shares of the Funds submitted for repurchase that have been held for less than a specified period. 5. Applicants state that the EWCs they intend to impose are functionally similar to CDSLs imposed by open-end investment companies under rule 6c-10 under the Act. Rule 6c-10 permits open-end investment companies to impose CDSLs, subject to certain conditions. Applicants note that rule 6c-10 is grounded in policy considerations supporting the employment of CDSLs where there are adequate safeguards for the investor and state that the same policy considerations support imposition of EWCs in the interval fund context. In addition, applicants state that EWCs may be necessary for the distributor to recover distribution costs. Applicants represent that any EWC imposed by the Funds will comply with rule 6c-10 under the Act as if the rule were applicable to closed-end investment companies. The Funds will disclose EWCs in accordance with the requirements of Form N-1A concerning CDSLs. Asset-Based Distribution Fees 1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit an affiliated person of a registered investment company, or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section 17(d) and rule 17d-1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants. 2. Rule 17d-3 under the Act provides an exemption from section 17(d) and rule 17d-1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b-1 under the Act. Applicants request an order under section 17(d) and rule 17d-1 under the Act to the extent necessary to permit the Fund to impose asset- based distribution fees. Applicants have agreed to comply with rules 12b-1 and 17d-3 as if those rules applied to closed-end investment companies, which they believe will resolve any concerns that might arise in connection with a Fund financing the distribution of its shares through asset-based distribution fees. For the reasons stated above, applicants submit that the exemptions requested under section 6(c) are necessary and appropriate in the public interest and are consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants further submit that the relief requested pursuant to section 23(c)(3) will be consistent with the protection of investors and will insure that applicants do not unfairly discriminate against any holders of the class of securities to be purchased. Finally, applicants state that the Funds' imposition of asset-based distribution fees is consistent with the provisions, policies and purposes of the Act and does not involve participation on a basis different from or less advantageous than that of other participants. Applicants' Condition Applicants agree that any order granting the requested relief will be subject to the following condition: Each Fund relying on the order will comply with the provisions of rules 6c-10, 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3 under the Act, as amended from time to time, as if those rules applied to closed-end management investment companies, and will comply with the NASD Sales Charge Rule, as amended from time to time, as if that rule applied to all closed-end management investment companies. For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2015-28696 Filed 11-10-15; 8:45 am] BILLING CODE 8011-01-P
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that reducing the waiting period for the exemption from sections 18(c) and 18(i) Applicants’ Representations
release of Form U5 disclosure of the Act, under sections 6(c) and 1. The Fund is a Delaware statutory
information through BrokerCheck, and 23(c)(3) of the Act for an exemption trust that is registered under the Act as
releasing Form U4 and Form U5 from rule 23c–3 under the Act, and for a non-diversified, closed-end
information regarding the same an order pursuant to section 17(d) of the management investment company. The
disclosure event simultaneously on Act and rule 17d–1 under the Act. Fund’s investment objective is to seek
BrokerCheck before the end of the total return through a combination of
waiting period, will limit the time SUMMARY OF APPLICATION: Applicants long-term capital appreciation and
period during which an incomplete request an order to permit certain income generation.
picture of a broker’s disclosure history registered closed-end management 2. The Adviser is a Delaware limited
may be displayed in BrokerCheck and investment companies to issue multiple liability company and is registered as an
should help to reduce investor classes of shares and to impose asset- investment adviser under the
confusion regarding the reason for a based distribution fees and early Investment Advisers Act of 1940. The
broker’s termination. The Commission withdrawal charges (‘‘EWCs’’). Adviser serves as investment adviser to
notes that brokers on whose behalf a the Fund.
Form U5 is submitted will continue to APPLICANTS: Wildermuth Endowment 3. The applicants seek an order to
have an opportunity to comment on the Strategy Fund (the ‘‘Fund’’) and permit the Fund to issue multiple
reported disclosure event either through Wildermuth Advisory, LLC (the classes of shares, each having its own
a Form U4 or by submitting a broker ‘‘Adviser’’). fee and expense structure, and to
comment directly to FINRA for The application was filed
FILING DATES: impose asset-based distribution fees and
inclusion in BrokerCheck. on August 13, 2015. EWCs.
The Commission appreciates FINRA’s 4. Applicants request that the order
efforts to enhance BrokerCheck and HEARING OR NOTIFICATION OF HEARING: also apply to any continuously-offered
encourages FINRA to continue An order granting the requested relief registered closed-end management
improving it and to consider the will be issued unless the Commission investment company that has been
suggestions made regarding the orders a hearing. Interested persons may previously organized or that may be
expungement of customer claims from request a hearing by writing to the organized in the future for which the
BrokerCheck and expanding the Commission’s Secretary and serving Adviser or any entity controlling,
information made available to the applicants with a copy of the request, controlled by, or under common control
public through BrokerCheck.17 personally or by mail. Hearing requests with the Adviser, or any successor in
should be received by the Commission interest to any such entity,1 acts as
V. Conclusion
by 5:30 p.m. on November 30, 2015, and investment adviser and which operates
It is therefore ordered, pursuant to should be accompanied by proof of as an interval fund pursuant to rule
Section 19(b)(2) of the Act,18 that the service on the applicants, in the form of 23c–3 under the Act or provides
proposed rule change (SR–FINRA– an affidavit, or, for lawyers, a certificate periodic liquidity with respect to its
2015–032), be, and hereby is, approved. of service. Pursuant to rule 0–5 under shares pursuant to rule 13e–4 under the
For the Commission, by the Division of the Act, hearing requests should state Securities Exchange Act of 1934
Trading and Markets, pursuant to delegated the nature of the writer’s interest, any (‘‘Exchange Act’’) (each, a ‘‘Future
authority.19 facts bearing upon the desirability of a Fund’’ and together with the Fund, the
Robert W. Errett, hearing on the matter, the reason for the ‘‘Funds’’).2
Deputy Secretary. request, and the issues contested. 5. The Fund is currently making a
[FR Doc. 2015–28680 Filed 11–10–15; 8:45 am] Persons who wish to be notified of a continuous public offering of its
BILLING CODE 8011–01–P hearing may request notification by common shares. Applicants state that
writing to the Commission’s Secretary. additional offerings by any Fund relying
ADDRESSES: Secretary, U.S. Securities on the order may be on a private
SECURITIES AND EXCHANGE placement or public offering basis.
and Exchange Commission, 100 F Street
COMMISSION Shares of the Funds will not be listed on
NE., Washington, DC 20549–1090;
[Investment Company Act Release No. Applicants: Wildermuth Endowment any securities exchange, nor quoted on
31896; File No. 812–14534] Strategy Fund and Wildermuth any quotation medium. The Funds do
Advisory, LLC, c/o David J. Baum, Esq. not expect there to be a secondary
Wildermuth Endowment Strategy Fund Alston & Bird, LLC, 950 F Street NW., trading market for their shares.
and Wildermuth Advisory, LLC; Notice 6. If the requested relief is granted, the
Washington, DC 20004.
of Application Fund intends to redesignate its common
FOR FURTHER INFORMATION CONTACT: shares as ‘‘Class A Shares’’ and to
November 5, 2015. Kaitlin C. Bottock, Senior Counsel, at continuously offer ‘‘Class C Shares’’,
AGENCY: Securities and Exchange (202) 551–8658, or Daniele Marchesani, and may also offer additional classes of
Commission (‘‘Commission’’). Branch Chief, at (202) 551–6821 shares in the future. Because of the
ACTION: Notice of an application under (Division of Investment Management, different distribution fees, services and
section 6(c) of the Investment Company Chief Counsel’s Office). any other class expenses that may be
Act of 1940 (the ‘‘Act’’) for an attributable to the Class A Shares and
SUPPLEMENTARY INFORMATION: The
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engines and records searches to conduct a thorough following is a summary of the 1 A successor in interest is limited to an entity
search of any associated person or firm with which application. The complete application that results from a reorganization into another
they are considering doing business. See also may be obtained via the Commission’s jurisdiction or a change in the type of business
Securities Exchange Act Release No. 62476 (July 8, Web site by searching for the file organization.
2010), 75 FR 41254 (July 15, 2010) (SR–FINRA– 2 Any Fund relying on this relief in the future will
2010–012). number, or for an applicant using the
do so in a manner consistent with the terms and
17 See supra note 12 and accompanying text. Company name box, at http:// conditions of the application. Applicants represent
18 15 U.S.C. 78s(b)(2). www.sec.gov/search/search.htm or by that each entity presently intending to rely on the
19 17 CFR 200.30–3(a)(12). calling (202) 551–8090. requested relief is listed as an applicant.
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from sections 18(c) and 18(i) to permit impose EWCs on shares of the Funds of its shares through asset-based
the Funds to issue multiple classes of submitted for repurchase that have been distribution fees.
shares. held for less than a specified period. For the reasons stated above,
4. Applicants submit that the 5. Applicants state that the EWCs they applicants submit that the exemptions
proposed allocation of expenses relating intend to impose are functionally requested under section 6(c) are
to distribution and voting rights among similar to CDSLs imposed by open-end necessary and appropriate in the public
multiple classes is equitable and will investment companies under rule 6c–10 interest and are consistent with the
not discriminate against any group or under the Act. Rule 6c–10 permits open- protection of investors and the purposes
class of shareholders. Applicants submit end investment companies to impose fairly intended by the policy and
that the proposed arrangements would CDSLs, subject to certain conditions. provisions of the Act. Applicants further
permit a Fund to facilitate the Applicants note that rule 6c–10 is submit that the relief requested
distribution of its shares and provide grounded in policy considerations pursuant to section 23(c)(3) will be
investors with a broader choice of supporting the employment of CDSLs consistent with the protection of
shareholder services. Applicants assert where there are adequate safeguards for investors and will insure that applicants
that the proposed closed-end the investor and state that the same do not unfairly discriminate against any
investment company multiple class policy considerations support holders of the class of securities to be
structure does not raise the concerns imposition of EWCs in the interval fund purchased. Finally, applicants state that
underlying section 18 of the Act to any context. In addition, applicants state the Funds’ imposition of asset-based
greater degree than open-end that EWCs may be necessary for the distribution fees is consistent with the
investment companies’ multiple class distributor to recover distribution costs. provisions, policies and purposes of the
structures that are permitted by rule Applicants represent that any EWC Act and does not involve participation
18f–3 under the Act. Applicants state imposed by the Funds will comply with on a basis different from or less
that each Fund will comply with the rule 6c–10 under the Act as if the rule advantageous than that of other
provisions of rule 18f–3 as if it were an were applicable to closed-end participants.
open-end investment company. investment companies. The Funds will Applicants’ Condition
Early Withdrawal Charges disclose EWCs in accordance with the
requirements of Form N–1A concerning Applicants agree that any order
1. Section 23(c) of the Act provides, granting the requested relief will be
in relevant part, that no registered CDSLs.
subject to the following condition:
closed-end investment company shall Asset-Based Distribution Fees Each Fund relying on the order will
purchase securities of which it is the comply with the provisions of rules 6c–
issuer, except: (a) On a securities 1. Section 17(d) of the Act and rule
17d–1 under the Act prohibit an 10, 12b–1, 17d–3, 18f–3, 22d–1, and,
exchange or other open market; (b) where applicable, 11a–3 under the Act,
pursuant to tenders, after reasonable affiliated person of a registered
investment company, or an affiliated as amended from time to time, as if
opportunity to submit tenders given to those rules applied to closed-end
all holders of securities of the class to person of such person, acting as
principal, from participating in or management investment companies,
be purchased; or (c) under other and will comply with the NASD Sales
circumstances as the Commission may effecting any transaction in connection
with any joint enterprise or joint Charge Rule, as amended from time to
permit by rules and regulations or time, as if that rule applied to all closed-
orders for the protection of investors. arrangement in which the investment
company participates unless the end management investment
2. Rule 23c–3 under the Act permits
Commission issues an order permitting companies.
a registered closed-end investment
company (an ‘‘interval fund’’) to make the transaction. In reviewing For the Commission, by the Division of
repurchase offers of between five and applications submitted under section Investment Management, under delegated
17(d) and rule 17d–1, the Commission authority.
twenty-five percent of its outstanding
shares at net asset value at periodic considers whether the participation of Robert W. Errett,
intervals pursuant to a fundamental the investment company in a joint Deputy Secretary.
policy of the interval fund. Rule 23c– enterprise or joint arrangement is [FR Doc. 2015–28696 Filed 11–10–15; 8:45 am]
3(b)(1) under the Act permits an interval consistent with the provisions, policies BILLING CODE 8011–01–P
fund to deduct from repurchase and purposes of the Act, and the extent
proceeds only a repurchase fee, not to to which the participation is on a basis
exceed two percent of the proceeds, that different from or less advantageous than SECURITIES AND EXCHANGE
is paid to the interval fund and is that of other participants. COMMISSION
reasonably intended to compensate the 2. Rule 17d–3 under the Act provides [Investment Company Act Release No.
fund for expenses directly related to the an exemption from section 17(d) and 31893; 812–14531]
repurchase. rule 17d–1 to permit open-end
3. Section 23(c)(3) provides that the investment companies to enter into Forum Funds and Exceed Advisory
Commission may issue an order that distribution arrangements pursuant to LLC; Notice of Application
would permit a closed-end investment rule 12b–1 under the Act. Applicants
company to repurchase its shares in request an order under section 17(d) and November 5, 2015.
circumstances in which the repurchase rule 17d–1 under the Act to the extent AGENCY: Securities and Exchange
Commission (‘‘Commission’’).
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is made in a manner or on a basis that necessary to permit the Fund to impose
does not unfairly discriminate against asset-based distribution fees. Applicants ACTION: Notice of an application under
any holders of the class or classes of have agreed to comply with rules 12b– section 6(c) of the Investment Company
securities to be purchased. 1 and 17d–3 as if those rules applied to Act of 1940 (‘‘Act’’) for an exemption
4. Applicants request relief under closed-end investment companies, from section 15(a) of the Act and rule
section 6(c), discussed above, and which they believe will resolve any 18f–2 under the Act, as well as from
section 23(c)(3) from rule 23c–3 to the concerns that might arise in connection certain disclosure requirements in rule
extent necessary for the Funds to with a Fund financing the distribution 20a-1 under the Act, Item 19(a)(3) of
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Document Created: 2015-12-14 14:53:24
Document Modified: 2015-12-14 14:53:24
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ``Act'') for an exemption from sections 18(c) and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for an exemption from rule 23c-3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d-1 under the Act. | |
| Dates | The application was filed on August 13, 2015. | |
| Contact | Kaitlin C. Bottock, Senior Counsel, at (202) 551-8658, or Daniele Marchesani, Branch Chief, at (202) 551- 6821 (Division of Investment Management, Chief Counsel's Office). | |
| FR Citation | 80 FR 70017 |
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