81 FR 9898 - Brookfield Asset Management Private Institutional Capital Adviser US, LLC et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 38 (February 26, 2016)

Page Range		9898-9900
FR Document		2016-04113

Applicants: Brookfield Asset Management Private Institutional Capital Adviser US, LLC and Brookfield Asset Management Private Institutional Capital Adviser (Canada), L.P. (``Applicants'').

Federal Register, Volume 81 Issue 38 (Friday, February 26, 2016)

[Federal Register Volume 81, Number 38 (Friday, February 26, 2016)]
[Notices]
[Pages 9898-9900]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-04113]

[[Page 9898]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 4337/803-00222]

Brookfield Asset Management Private Institutional Capital Adviser
US, LLC et al.; Notice of Application

February 22, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an exemptive order under Section 206A
of the Investment Advisers Act of 1940 (the ``Advisers Act'') and Rule
206(4)-5(e).

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SUMMARY:

Applicants: Brookfield Asset Management Private Institutional Capital
Adviser US, LLC and Brookfield Asset Management Private Institutional
Capital Adviser (Canada), L.P. (``Applicants'').

Relevant Advisers Act Sections: Exemption requested under section 206A
of the Advisers Act and rule 206(4)-5(e) from rule 206(4)-5(a)(1) under
the Advisers Act.

Summary of Application: Applicants request that the Commission issue an
order under section 206A of the Advisers Act and rule 206(4)-5(e)
exempting them from rule 206(4)-5(a)(1) under the Advisers Act to
permit Applicants to receive compensation for investment advisory
services provided to government entities within the two-year period
following a contribution by a covered associate of Applicant to an
official of the government entities.

Filing Dates: The application was filed on January 29, 2014, and
amended and restated applications were filed on February 26, 2014,
August 13, 2014 and October 7, 2015.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving Applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on March 18, 2016, 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 under the Advisers 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 may request
notification of a hearing by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090. Applicants, Brookfield Asset Management
Private Institutional Capital Adviser US, LLC et al., 250 Vesey Street,
15th Floor, New York, NY 10281.

FOR FURTHER INFORMATION CONTACT: Aaron T. Gilbride, Senior Counsel or
Sara P. Crovitz, Assistant Chief Counsel, at (202) 551-6825 (Division
of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site either at http://www.sec.gov/rules/iareleases.shtml or 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.

Applicant's Representations

1. Brookfield Asset Management Private Institutional Capital
Adviser US, LLC (``Brookfield US'') and Brookfield Asset Management
Private Institutional Capital Adviser (Canada), L.P. (``Brookfield
Canada'' and, together with Brookfield US, the ``Applicants''), are
affiliated asset management companies registered with the Commission as
investment advisers under the Advisers Act and are indirectly wholly-
owned by Brookfield Asset Management, Inc., a public company.
Brookfield US advises, among other private funds, Brookfield Strategic
Real Estate Partners B L.P. (``Fund A''), a private fund that is part
of Brookfield's Real Estate Platform, and Brookfield Canada advises,
among other private funds, Brookfield Infrastructure Fund II-B, L.P.
(``Fund B''), a private fund that is part of Brookfield's
Infrastructure Platform. Fund A and Fund B are collectively referred to
as the ``Funds.'' Both Funds are excluded from the definition of
``investment company'' by Section 3(c)(7) of the Investment Company Act
of 1940. Certain public pension plans that are government entities of
New York City (the ``Clients'') are invested in the Funds. The
investment decisions for the Clients are made by the respective boards
of trustees, which range from seven to 15 members, and include certain
elected officials sitting ex officio; appointees of elected officials;
and representatives of employee groups that participate in the system.
Either the Mayor of New York City or one or more of the Mayor's
appointees sit on each board.
2. On January 13, 2013, Richard B. Clark, a Senior Managing
Partner, Global Head of Brookfield's Real Estate Platform, Brookfield
Property Group, and Non-Executive Chairman of the Board of Brookfield
Office Properties (``BPO''), a non-investment adviser commercial real
estate corporation that owns, manages, and develops real estate and is
affiliated with the Applicants and Brookfield (the ``Contributor''),
made a $400 campaign contribution (the ``Contribution'') to the
campaign of Christine Quinn (the ``Official''), a New York City
Councilwoman who was Council Speaker. The Contribution was given in
connection with a fundraiser for the Official's campaign on January 13,
2013, which the Contributor attended. At the time of the Contribution,
the Official was a candidate for New York City Mayor.
3. Applicants represent that the amount of the Contribution,
profile of the candidate, and characteristics of the campaign fall
generally within the pattern of the Contributor's other political
donations.
4. Applicants represent that the Contributor has confirmed that he
has not, at any time, had any contact with the Official concerning
campaign contributions, nor has the Contributor told any prospective or
existing investor (including the Clients) about the Contribution.
5. Applicants represent that the Contributor's role with the
Clients was limited to making substantive presentations to the Clients'
representatives and consultants about the Real Estate Platform
Brookfield US manages. Applicants represent that the Contributor had no
contact with any representative of the Clients outside of such
presentation and no contact with any member of the board of trustees
which oversees the investment decisions of the Clients.
6. Applicants represent that the Clients made their investment in
Fund A on May 23, 2012, approximately eight months prior to the
Contributor making the Contribution. The Clients invested in Fund B on
July 8, 2013. Applicants represent that the Contributor was not
involved in any contacts with the Clients, their representatives or the
New York City Comptroller's office in relation to their investment in
Fund B.
7. Applicants represent that the Contributor did not solicit any
other persons to make contributions to the Official's campaign and did
not arrange any introductions to potential supporters.
8. Applicants represent that the Contribution was discovered by the
Contributor following completion of his annual certification regarding
compliance with the Applicants'

[[Page 9899]]

Compliance Manual (which includes a policy and procedure designed to
ensure compliance with laws, rules and regulations regarding pay-to-
play practices). Applicants represent that the Contributor immediately
notified the Chief Compliance Officer and obtained a full refund within
days after the Contribution was discovered. Applicants represent that
Brookfield US established an escrow account for Fund A in which all
management fees attributable to the Clients' investment in Fund A
dating back to January 13, 2013, the date of the Contribution, are
segregated. Applicants represent that at the time of the Clients'
investment in Fund B, Brookfield Canada established an escrow account
for Fund B in which all management fees attributable to Clients'
investment in Fund B are segregated. Applicants represent that they
also notified the Clients that if the Commission does not grant the
exemption, the Applicants will refund the management fees related to
the Clients' investments during the two-year period to the Funds, and
when carried interest is realized, the portion attributable to the
Clients' investments during the two-year time-out period will be
calculated and refunded to the Funds.
9. Applicants represent that at no time did any of Applicant's
other employees have any knowledge that the Contribution had been made
prior to its discovery by the Applicants' Chief Compliance Officer on
February 22, 2013.
10. Applicants represent that they had adopted and implemented
compliance procedures meeting the requirements of rule 206(4)-5.
Applicants represent that their compliance procedures prohibit
contributions by covered associates to state or local candidates or
officials. Applicants represent that their compliance procedures apply
to all of Applicants' covered associates, and those who may become
covered associates. Applicant represents that all employees are
required to certify their compliance on a periodic basis.

Applicants' Legal Analysis

1. Rule 206(4)-5(a)(1) under the Advisers Act prohibits a
registered investment adviser from providing investment advisory
services for compensation to a government entity within two years after
a contribution to an official of the government entity is made by the
investment adviser or any covered associate of the investment adviser.
The Clients are each a ``government entity,'' as defined in rule
206(4)-5(f)(5), the Contributor is a ``covered associate'' as defined
in rule 206(4)-5(f)(2), and the Official is an ``official'' as defined
in rule 206(4)-5(f)(6). Rule 206(4)-5(c) provides that when a
government entity invests in a covered investment pool, the investment
adviser to that covered investment pool is treated as providing
advisory services directly to the government entity. The Funds are each
a ``covered investment pool,'' as defined in rule 206(4)-5(f)(3)(ii).
2. Section 206A of the Advisers Act grants the Commission the
authority to ``conditionally or unconditionally exempt any person or
transaction . . . from any provision or provisions of [the Advisers
Act] or of any rule or regulation thereunder, if and to the extent that
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 Advisers Act].''
3. Rule 206(4)-5(e) provides that the Commission may exempt an
investment adviser from the prohibition under rule 206(4)-5(a)(1) upon
consideration of the factors listed below, among others:
(1) Whether the 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 Advisers
Act;
(2) Whether the investment adviser: (i) Before the contribution
resulting in the prohibition was made, adopted and implemented policies
and procedures reasonably designed to prevent violations of the rule;
and (ii) prior to or at the time the contribution which resulted in
such prohibition was made, had no actual knowledge of the contribution;
and (iii) after learning of the contribution: (A) Has taken all
available steps to cause the contributor involved in making the
contribution which resulted in such prohibition to obtain a return of
the contribution; and (B) has taken such other remedial or preventive
measures as may be appropriate under the circumstances;
(3) Whether, at the time of the contribution, the contributor was a
covered associate or otherwise an employee of the investment adviser,
or was seeking such employment;
(4) The timing and amount of the contribution which resulted in the
prohibition;
(5) The nature of the election (e.g., federal, state or local); and
(6) The contributor's apparent intent or motive in making the
contribution which resulted in the prohibition, as evidenced by the
facts and circumstances surrounding such contribution.
4. Applicants request an order pursuant to section 206A and rule
206(4)-5(e), exempting them from the two-year prohibition on
compensation imposed by rule 206(4)-5(a)(1) with respect to investment
advisory services provided to the Clients within the two-year period
following the Contribution.
5. Applicants submit that the exemption is necessary and
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policy and
provisions of the Advisers Act. Applicants further submit that the
other factors set forth in rule 206(4)-5(e) similarly weigh in favor of
granting an exemption to the Applicants to avoid consequences
disproportionate to the violation.
6. Applicants state that the relationship with the Clients pre-date
the Contribution and that only the investment in Fund B (in which the
Contributor did not play a role) was made subsequent to the
Contribution. Applicants state that the Contribution was made eight
months after the Clients' investment in Fund A. Applicants note that
they established and maintain their relationships with the Clients on
an arms'-length basis free from any improper influence as a result of
the Contribution.
7. Applicants state that at all relevant times they had policies
which were fully compliant with rule 206(4)-5's requirements at the
time of the Contribution. Applicants further state that at no time did
Applicants or any employees of Applicants, other than the Contributor,
have any knowledge that the Contribution had been made prior to its
discovery by Applicants' Chief Compliance Officer in February 2013.
After learning of the Contribution, Applicants and the Contributor took
all available steps to obtain a return of the Contribution. Escrow
accounts were set up for the Clients at both Funds and all fees charged
to the Clients' capital accounts in the Funds since January 13, 2013
were deposited by the Applicants in the accounts for immediate return
to the Funds should an exemptive order not be granted.
8. Applicants state that the Contributor's apparent intent in
making the Contribution was not to influence the selection or retention
of the Applicants. The amount of the Contribution, profile of the
candidate, and characteristics of the campaign fall generally within
the pattern of the Contributor's other political donations. Applicants
further state, as discussed above, that the Contributor's involvement
with the Clients has been limited to making substantive

[[Page 9900]]

presentations to the Clients' representatives and consultants about the
Real Estate Platform Brookfield US manages. The Contributor has no
contact with any representative of a Client outside of those
presentations and no contact with any member of a Client's board.

For the Commission, by the Division of Investment Management,
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-04113 Filed 2-25-16; 8:45 am]
BILLING CODE 8011-01-P

9900 Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Notices

presentations to the Clients’ 2016, the Exchange withdrew The Commission is publishing this
representatives and consultants about Amendment No. 1 and filed notice to solicit comments on the
the Real Estate Platform Brookfield US Amendment No. 2 to the proposed rule proposed rule change, as modified by
manages. The Contributor has no change.7 The proposed rule change, as Amendment No. 4 thereto, from
contact with any representative of a modified by Amendment No. 2 thereto, interested persons.
Client outside of those presentations was published for comment in the Additionally, this order institutes
and no contact with any member of a Federal Register on February 1, 2016.8 proceedings under Section 19(b)(2)(B) of
Client’s board. On February 11, 2016, the Exchange the Act 14 to determine whether to
For the Commission, by the Division of filed Amendment No. 3 to the proposed approve or disapprove the proposed
Investment Management, under delegated rule change.9 The Commission has rule change, as modified by Amendment
authority. received one comment letter on the No. 4 thereto, as discussed in Section III
Robert W. Errett, proposal.10 below. The institution of proceedings
Deputy Secretary. Pursuant to Section 19(b)(1) of the does not indicate that the Commission
[FR Doc. 2016–04113 Filed 2–25–16; 8:45 am]
Act 11 and Rule 19b–4 thereunder,12 has reached any conclusions with
notice is hereby given that, on February respect to any of the issues involved,
BILLING CODE 8011–01–P
12, 2016, the Exchange filed with the nor does it mean that the Commission
Commission Amendment No. 4 to the will ultimately disapprove the proposed
SECURITIES AND EXCHANGE proposed rule change, as described in rule change. Rather, as described in
COMMISSION Sections I and II below, which Sections Section III below, the Commission seeks
have been prepared by the Exchange.13 and encourages interested persons to
[Release No. 34–77203; File No. SR– provide additional comment on the
NYSEArca–2015–110] the Commission shall either approve or disapprove, proposed rule change to inform the
or institute proceedings to determine whether to Commission’s analysis of whether to
Self-Regulatory Organizations; NYSE disapprove, the proposed rule change. See id.
approve or disapprove the proposed
Arca, Inc.; Notice of Filing of 7 In Amendment No. 2 to the proposed rule

change, the Exchange added provisions to the rule change.
Amendment No. 4 to, and Order
proposed generic listing criteria relating to non-U.S.
Instituting Proceedings to Determine Component Stocks, convertible securities, and I. Self-Regulatory Organization’s
Whether to Approve or Disapprove, a listed swaps, among other changes. Amendment Statement of the Terms of Substance of
Proposed Rule Change, as Modified by No. 2, which amended and replaced the original the Proposed Rule Change
Amendment No. 4 Thereto, Amending proposal in its entirety, is available on the
Commission’s Web site at: http://www.sec.gov/ The Exchange proposes to amend
NYSE Arca Equities Rule 8.600 to comments/sr-nysearca-2015-110/nysearca2015110- NYSE Arca Equities Rule 8.600 to adopt
Adopt Generic Listing Standards for 3.pdf. generic listing standards for Managed
Managed Fund Shares 8 See Securities Exchange Act Release No. 76974
Fund Shares. The text of the proposed
(Jan. 26, 2016), 81 FR 5149.
February 22, 2016. 9 In Amendment No. 3 to the proposed rule rule change is available on the
On November 6, 2015, NYSE Arca, change, the Exchange (a) revised the provisions Exchange’s Web site at www.nyse.com,
Inc. (‘‘Exchange’’) filed with the relating to convertible securities, (b) clarified the at the principal office of the Exchange,
limitations on non-exchange-traded American and at the Commission’s Public
Securities and Exchange Commission Depositary Receipts, (c) eliminated redundant
(‘‘Commission’’), pursuant to Section provisions relating to limitations on leveraged and
Reference Room.
19(b)(1) of the Securities Exchange Act inverse-leveraged Derivative Securities Products, II. Self-Regulatory Organization’s
of 1934 (‘‘Act’’) 1 and Rule 19b–4 (d) revised the provision relating to limitations on
listed derivatives, (e) clarified that, for purposes of Statement of the Purpose of, and
thereunder,2 a proposed rule change to the limitations relating to listed and over-the- Statutory Basis for, the Proposed Rule
amend NYSE Arca Equities Rule 8.600 counter derivatives, a portfolio’s investment in Change
and to adopt generic listing standards listed and over-the-counter derivatives will be
calculated as the total absolute notional value of In its filing with the Commission, the
for Managed Fund Shares.3 The these derivatives, and (f) provided additional self-regulatory organization included
proposed rule change was published for information regarding the statutory basis of the statements concerning the purpose of,
comment in the Federal Register on proposal. Amendment No. 3, which amended and
replaced the proposed rule change, as modified by and basis for, the proposed rule change
November 27, 2015.4 and discussed any comments it received
On November 23, 2015, the Exchange Amendment No. 2 thereto, in its entirety, is
available on the Commission’s Web site at: http:// on the proposed rule change. The text
filed Amendment No. 1 to the proposed www.sec.gov/comments/sr-nysearca-2015-110/ of those statements may be examined at
rule change, which amended and nysearca2015110-4.pdf.
the places specified in Item IV below.
replaced the original proposal in its 10 See Letter from Rob Ivanoff to the Commission

dated Nov. 22, 2015 (commenting that the format The Exchange has prepared summaries,
entirety. On January 4, 2016, pursuant
of the Exchange’s proposed rule change was unclear set forth in sections A, B, and C below,
to Section 19(b)(2) of the Act,5 the and difficult to read, and suggesting a new format of the most significant parts of such
Commission designated a longer period that would be easier to understand). All comments
statements.
within which to approve the proposed on the proposed rule change are available on the
rule change, disapprove the proposed Commission’s Web site at: http://www.sec.gov/ A. Self-Regulatory Organization’s
comments/sr-nysearca-2015-110/nysearca2015110-
rule change, or institute proceedings to 1.htm. Statement of the Purpose of, and
determine whether to disapprove the 11 15 U.S.C.78s(b)(1). Statutory Basis for, the Proposed Rule
proposed rule change.6 On January 21, 12 17 CFR 240.19b–4. Change
13 Specifically, in Amendment No. 4 to the

1 15 proposed rule change and as described herein, the 1. Purpose
U.S.C. 78s(b)(1).
mstockstill on DSK4VPTVN1PROD with NOTICES

2 17 CFR 240.19b–4. Exchange (a) confirmed that the generic listing The Exchange proposes to amend
criteria are to be applied on an initial and
3 See NYSE Arca Equities Rule 8.600(c)(1)
continuing basis, (b) corrected a typographical
NYSE Arca Equities Rule 8.600 to adopt
(defining Managed Fund Shares). generic listing standards for Managed
error, and (c) corrected a statement regarding the
4 See Securities Exchange Act Release No. 76486
statutory basis of the proposal. Amendment No. 4, Fund Shares. Under the Exchange’s
(Nov. 20, 2015), 80 FR 74169 (‘‘Notice’’). which amended and replaced the proposed rule
5 15 U.S.C. 78s(b)(2).
current rules, a proposed rule change
change, as modified by Amendment No. 3 thereto,
6 See Securities Exchange Act Release No. 76819, in its entirety, is available on the Commission’s
must be filed with the Securities and
81 FR 987 (Jan. 8, 2016). The Commission Web site at: http://www.sec.gov/comments/sr-
designated February 25, 2016 as the date by which nysearca-2015-110/nysearca2015110-5.pdf. 14 15 U.S.C. 78s(b)(2)(B).

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Document Created: 2018-02-02 14:37:00
Document Modified: 2018-02-02 14:37:00

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 application for an exemptive order under Section 206A of the Investment Advisers Act of 1940 (the ``Advisers Act'') and Rule 206(4)-5(e).
Dates		The application was filed on January 29, 2014, and amended and restated applications were filed on February 26, 2014, August 13, 2014 and October 7, 2015.
Contact		Aaron T. Gilbride, Senior Counsel or Sara P. Crovitz, Assistant Chief Counsel, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
FR Citation		81 FR 9898