82 FR 22165 - New Mountain Finance Corporation, et al.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 91 (May 12, 2017)
Federal Register Volume 82, Issue 91 (May 12, 2017)
| Page Range | 22165-22170 | |
| FR Document | 2017-09643 |
[Federal Register Volume 82, Number 91 (Friday, May 12, 2017)] [Notices] [Pages 22165-22170] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09643] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 32630; 812-14699] New Mountain Finance Corporation, et al. May 8, 2017. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice. ----------------------------------------------------------------------- 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 permitting certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and under rule 17d-1 under the Act. Summary of Application: Applicants request an order to permit one or more business development companies (each, a ``BDC'') and certain other closed-end management investment companies to co-invest in portfolio companies with each other and with affiliated investment funds. Applicants: New Mountain Finance Corporation (``NMFC''); NMF Ancora Holdings, Inc., NMF QID NGL Holdings, Inc., and NMF YP Holdings, Inc. (collectively, the ``NMFC Subsidiaries''); New Mountain Finance SBIC, L.P. (``SBIC LP''); New Mountain Guardian Partners II, L.P. (``Guardian II''); New Mountain Guardian II Master Fund-A, L.P. (``Guardian II Master A''); New Mountain Guardian II Master Fund-B, L.P. (``Guardian II Master B,'' and together with Guardian II and Guardian [[Page 22166]] II Master-A, the ``Guardian II Funds''); and New Mountain Finance Advisers BDC, L.L.C. (the ``BDC Adviser'') on behalf of itself and its successors.\1\ --------------------------------------------------------------------------- \1\ The term ``successor,'' as applied to an Adviser, means an entity that results from a reorganization into another jurisdiction or change in the type of business organization. Filing Dates: The application was filed on September 12, 2016, and --------------------------------------------------------------------------- amended on February 1, 2017 and April 7, 2017. 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 June 2, 2017, 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 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 St. NE., Washington, DC 20549-1090. Applicants: Robert A. Hamwee, Chief Executive Officer, 787 Seventh Avenue, 48th Floor, New York, NY 10019. FOR FURTHER INFORMATION CONTACT: Rochelle Kauffman Plesset, Senior Counsel, or David Marcinkus, 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. NMFC, a Delaware corporation, is organized as a closed-end management investment company that has elected to be regulated as a BDC under section 54(a) of the Act.\2\ Applicants state that NMFC seeks to generate both current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure. The board of directors (``Board'') of NMFC is comprised of seven directors, four of whom are not ``interested directors'' as defined in section 2(a)(19) of the Act (``Non-Interested Directors''). --------------------------------------------------------------------------- \2\ 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. The NMFC Subsidiaries are wholly-owned subsidiaries of NMFC, each structured as a Delaware corporation to hold equity or equity-like investments in portfolio companies organized as limited liability companies or other forms of pass-through entities. The NMFC Subsidiaries are not registered under the Act in reliance on the exclusion from the definition of ``investment company'' in section 3(c)(7) of the Act. 3. SBIC LP, a Delaware limited partnership, received a license from the Small Business Administration to operate as a small business investment company. SBIC LP is a consolidated wholly-owned subsidiary of NMFC. 4. Guardian II is a private fund organized in Delaware on August 25, 2016. Both Guardian II Master A and Guardian II Master B are private funds organized as Cayman Islands exempted limited partnerships on January 3, 2017. The Guardian II Funds have not yet formally commenced principal operations. Applicants state that the investment objective of each of these funds is to generate both current income and capital appreciation by investing primarily in first lien and second lien secured loans as well as subordinated debt. None of the Guardian II Funds is registered under the Act in reliance on the exclusion from the definition of ``investment company'' in section 3(c)(7) of the Act. 5. BDC Adviser, a Delaware limited liability company, is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940 (the ``Advisers Act''). BDC Adviser serves as investment adviser to NMFC and will serve as investment adviser to the Guardian II Funds. 6. Applicants seek an order (``Order'') to permit one or more Regulated Funds \3\ and/or one or more Affiliated Funds \4\ to participate in the same investment opportunities through a proposed co- investment program (the ``Co-Investment Program'') where such participation would otherwise be prohibited under 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) participated together with one or more other Regulated Funds and/or one or more Affiliated Funds in reliance on the requested Order. ``Potential Co-Investment Transaction'' means any investment opportunity in which a Regulated Fund (or its Wholly-Owned Investment Sub) could not participate together with one or more Affiliated Funds and/or one or more other Regulated Funds without obtaining and relying on the Order.\6\ --------------------------------------------------------------------------- \3\ ``Regulated Fund'' means NMFC 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 a BDC, (b) whose investment adviser is an Adviser, and (c) that intends to participate in the Co-Investment Program. The term ``Adviser'' means (a) the BDC Adviser and (b) any future investment adviser that controls, is controlled by, or is under common control with the BDC Adviser and is registered as an investment adviser under the Advisers Act. \4\ ``Affiliated Fund'' means the Guardian II Funds and any Future Affiliated Funds. ``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 of 1933 (the ``Securities Act''). \6\ All existing entities that currently intend to rely upon the requested Order have been named as applicants. Any other existing or future entity that subsequently relies on the Order will comply with the terms and conditions of the application. --------------------------------------------------------------------------- 7. Applicants state any of the Regulated Funds may, from time to time, form one or more Wholly-Owned Investment Subs.\7\ A Wholly-Owned Investment Sub would be prohibited from investing in a Co-Investment Transaction with any Affiliated Fund or [[Page 22167]] 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 will also be informed of, and take into consideration, the relative participation of the Regulated Fund and the Wholly-Owned Investment Sub. --------------------------------------------------------------------------- \7\ The term ``Wholly-Owned Investment Sub'' means an entity (i) that is wholly-owned by a Regulated Fund (with the Regulated Fund at all times holding, beneficially and of record, 100% of the voting and economic interests); (ii) whose sole business purpose is to hold one or more investments on behalf of the Regulated Fund (and, in the case of an SBIC Subsidiary, maintain a license under the Small Business Investment Act of 1958 and issue debentures guaranteed by the SBA; (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. Each of the NMFC Subsidiaries and SBIC LP is a Wholly-Owned Investment Sub of NMFC and any future subsidiaries of the Regulated Funds that participate in Co-Investment Transactions will be Wholly-Owned Investment Subs. --------------------------------------------------------------------------- 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 as described in the application (``Available Capital''), and other pertinent factors applicable to that Regulated Fund.\8\ The Board of each Regulated Fund, including the Non- Interested Directors, has (or will have prior to relying on the requested Order) determined that it is in the best interests of the Regulated Fund to participate in Co-Investment Transactions.\9\ --------------------------------------------------------------------------- \8\ ``Objectives and Strategies'' means a Regulated Fund's investment objectives and strategies, as described in the Regulated Fund's registration statement on Form N-2 or Form 10, as applicable, other filings the Regulated Fund has made with the Commission under the Securities Act, or under the Securities Exchange Act of 1934, and the Regulated Fund's reports to shareholders. \9\ The Regulated Funds, however, will not be obligated to invest, or co-invest, when investment opportunities are referred to them. --------------------------------------------------------------------------- 9. Other than pro rata dispositions and Follow-On Investments as provided in conditions 7 and 8, and after making the determinations required in conditions 1 and 2(a), the Adviser will present each Potential Co-Investment Transaction and the proposed allocation to the directors of the Board eligible to vote under section 57(o) of the Act (``Eligible Directors''), and the ``required majority,'' as defined in section 57(o) of the Act (``Required Majority'') \10\ will approve each Co-Investment Transaction prior to any investment by the participating Regulated Fund. --------------------------------------------------------------------------- \10\ In the case of a Regulated Fund that is a registered closed-end fund, the Board members that make up the Required Majority will be determined as if the Regulated Fund were a BDC subject to section 57(o). --------------------------------------------------------------------------- 10. With respect to the pro rata dispositions and Follow-On Investments provided in conditions 7 and 8, a Regulated Fund may participate in a pro rata disposition or Follow-On Investment without obtaining prior approval of the Required Majority if, among other things: (i) the proposed participation of each Regulated Fund and Affiliated Fund in such disposition is proportionate to its outstanding investments in the issuer immediately preceding the disposition or Follow-On Investment, as the case may be; and (ii) the Board of the Regulated Fund has approved that Regulated Fund's participation in pro rata dispositions and Follow-On Investments as being in the best interests of the Regulated Fund. If the Board does not so approve, any such disposition or Follow-On Investment will be submitted to the Regulated Fund's Eligible Directors. The Board of any Regulated Fund may at any time rescind, suspend or qualify its approval of pro rata dispositions and Follow-On Investments with the result that all dispositions and/or Follow-On Investments must be submitted to the Eligible Directors. 11. No Non-Interested Director of a Regulated Fund will have a financial interest in any Co-Investment Transaction, other than through share ownership in one of the Regulated Funds. 12. If an Adviser or its principal owners (the ``Principals''), or any person controlling, controlled by, or under common control with an Adviser or the Principals, and any Affiliated Fund (collectively, the ``Holders'') own in the aggregate more than 25 per cent of the outstanding voting shares of a Regulated Fund (the ``Shares''), then the Holders will vote such Shares as required under condition 14. 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 an Adviser 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. The Non-Interested Directors shall evaluate and approve any such independent third party, taking into account its qualifications, reputation for independence, cost to the shareholders, and other factors that they deem relevant. 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 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- [[Page 22168]] 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. 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 Available Capital, 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 the 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 accordance with 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 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,\11\ 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. --------------------------------------------------------------------------- \11\ This exception applies only to Follow-On Investments by a Regulated Fund in issuers in which that Regulated Fund already holds investments. --------------------------------------------------------------------------- 6. A Regulated Fund will not participate in any Potential Co- Investment Transaction unless the terms, conditions, price, class of securities to be purchased, settlement date, and registration rights will be the same for each participating Regulated Fund and Affiliated Fund. The grant to an Affiliated Fund or another Regulated Fund, but not the Regulated Fund, of the right to nominate a director for election to a portfolio company's board of directors, the right to have an observer on the board of directors or similar rights to participate in the governance or management of the portfolio company will not be [[Page 22169]] 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 applicable Adviser to be invested by the applicable Regulated Fund in the Follow-On Investment, 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; then the investment opportunity will be allocated among them pro rata based on each participant's Available Capital, up to the maximum 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. 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 \12\ (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 [[Page 22170]] 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. --------------------------------------------------------------------------- \12\ Applicants are not requesting and the staff is not providing any relief for transaction fees received in connection with any Co-Investment Transaction. --------------------------------------------------------------------------- 14. If the Holders own in the aggregate more than 25 percent of the Shares of a Regulated Fund, then the Holders will vote such Shares as directed by an independent third party when voting on (1) the election of directors; (2) the removal of one or more directors; or (3) any other matter under either the 1940 Act or applicable state law affecting the Board's composition, size or manner of election. 15. Each Regulated Fund's chief compliance officer, as defined in rule 38a-1(a)(4), will prepare an annual report for its Board each year that evaluates (and documents the basis of that evaluation) the Regulated Fund's compliance with the terms and conditions of the application and the procedures established to achieve such compliance. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-09643 Filed 5-11-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 91 / Friday, May 12, 2017 / Notices 22165
2. Date: June 26, 2017. DATES: Comments are due May 15, 2017. 39 CFR part 3020, subpart B. Comment
This meeting will discuss ADDRESSES: Submit comments deadline(s) for each request appear in
applications on the subjects of the Arts, electronically via the Commission’s section II.
Media & Communication, Philosophy & Filing Online system at http:// II. Docketed Proceeding(s)
Religion, for the Awards for Faculty www.prc.gov. Those who cannot submit
grant program, submitted to the Division comments electronically should contact 1. Docket No(s).: MC2017–129 and
of Research Programs. the person identified in the FOR FURTHER CP2017–182; Filing Title: Request of the
3. Date: June 27, 2017. INFORMATION CONTACT section by United States Postal Service to Add
This meeting will discuss telephone for advice on filing Priority Mail Contract 317 to
applications on the subjects of World alternatives. Competitive Product List and Notice of
History, Linguistics, and the Social Filing (Under Seal) of Unredacted
FOR FURTHER INFORMATION CONTACT:
Sciences, for NEH-Mellon Fellowships Governors’ Decision, Contract, and
David A. Trissell, General Counsel, at
for Digital Publication, submitted to the Supporting Data; Filing Acceptance
202–789–6820.
Division of Research Programs. Date: May 5, 2017; Filing Authority: 39
SUPPLEMENTARY INFORMATION:
4. Date: June 27, 2017. U.S.C. 3642 and 39 CFR 3020.30 et seq.;
This meeting will discuss Table of Contents Public Representative: Kenneth R.
applications on the subject of Literature Moeller; Comments Due: May 15, 2017.
I. Introduction
Studies, for the Awards for Faculty II. Docketed Proceeding(s) This notice will be published in the
grant program, submitted to the Division Federal Register.
of Research Programs. I. Introduction Stacy L. Ruble,
5. Date: June 28, 2017.
This meeting will discuss The Commission gives notice that the Secretary.
applications on the subjects of History Postal Service filed request(s) for the [FR Doc. 2017–09615 Filed 5–11–17; 8:45 am]
& Politics, for the Awards for Faculty Commission to consider matters related BILLING CODE 7710–FW–P
grant program, submitted to the Division to negotiated service agreement(s). The
of Research Programs. request(s) may propose the addition or
6. Date: June 29, 2017. removal of a negotiated service
SECURITIES AND EXCHANGE
This meeting will discuss agreement from the market dominant or
COMMISSION
applications on the subjects of the competitive product list, or the
American History, American Studies & modification of an existing product [Investment Company Act Release No.
Social Sciences, for the Awards for currently appearing on the market 32630; 812–14699]
Faculty grant program, submitted to the dominant or the competitive product
list. New Mountain Finance Corporation, et
Division of Research Programs. al.
Because these meetings will include Section II identifies the docket
review of personal and/or proprietary number(s) associated with each Postal May 8, 2017.
financial and commercial information Service request, the title of each Postal
AGENCY: Securities and Exchange
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Commission (‘‘Commission’’).
grant applicants, the meetings will be date, and the authority cited by the
Postal Service for each request. For each ACTION: Notice.
closed to the public pursuant to sections
552b(c)(4) and 552b(c)(6) of Title 5, request, the Commission appoints an Notice of application for an order
U.S.C., as amended. I have made this officer of the Commission to represent under sections 17(d) and 57(i) of the
determination pursuant to the authority the interests of the general public in the Investment Company Act of 1940 (the
granted me by the Chairman’s proceeding, pursuant to 39 U.S.C. 505 ‘‘Act’’) and rule 17d–1 under the Act
Delegation of Authority to Close (Public Representative). Section II also permitting certain joint transactions
Advisory Committee Meetings dated establishes comment deadline(s) otherwise prohibited by sections 17(d)
April 15, 2016. pertaining to each request. and 57(a)(4) of the Act and under rule
The public portions of the Postal
Dated: May 8, 2017. 17d–1 under the Act.
Service’s request(s) can be accessed via
Elizabeth Voyatzis, the Commission’s Web site (http:// SUMMARY OF APPLICATION: Applicants
Committee Management Officer. www.prc.gov). Non-public portions of request an order to permit one or more
[FR Doc. 2017–09600 Filed 5–11–17; 8:45 am] the Postal Service’s request(s), if any, business development companies (each,
BILLING CODE 7536–01–P can be accessed through compliance a ‘‘BDC’’) and certain other closed-end
with the requirements of 39 CFR management investment companies to
3007.40. co-invest in portfolio companies with
The Commission invites comments on each other and with affiliated
POSTAL REGULATORY COMMISSION
whether the Postal Service’s request(s) investment funds.
[Docket Nos. MC2017–129 and CP2017–182] in the captioned docket(s) are consistent APPLICANTS: New Mountain Finance
with the policies of title 39. For Corporation (‘‘NMFC’’); NMF Ancora
New Postal Products
request(s) that the Postal Service states Holdings, Inc., NMF QID NGL Holdings,
AGENCY: Postal Regulatory Commission. concern market dominant product(s), Inc., and NMF YP Holdings, Inc.
ACTION: Notice. applicable statutory and regulatory (collectively, the ‘‘NMFC Subsidiaries’’);
requirements include 39 U.S.C. 3622, 39 New Mountain Finance SBIC, L.P.
mstockstill on DSK30JT082PROD with NOTICES
SUMMARY: The Commission is noticing a U.S.C. 3642, 39 CFR part 3010, and 39 (‘‘SBIC LP’’); New Mountain Guardian
recent Postal Service filing for the CFR part 3020, subpart B. For request(s) Partners II, L.P. (‘‘Guardian II’’); New
Commission’s consideration concerning that the Postal Service states concern Mountain Guardian II Master Fund-A,
negotiated service agreements. This competitive product(s), applicable L.P. (‘‘Guardian II Master A’’); New
notice informs the public of the filing, statutory and regulatory requirements Mountain Guardian II Master Fund-B,
invites public comment, and takes other include 39 U.S.C. 3632, 39 U.S.C. 3633, L.P. (‘‘Guardian II Master B,’’ and
administrative steps. 39 U.S.C. 3642, 39 CFR part 3015, and together with Guardian II and Guardian
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![22170 Federal Register / Vol. 82, No. 91 / Friday, May 12, 2017 / Notices
or in connection with a Co-Investment been prepared by the self-regulatory and includes specific provisions for
Transaction (other than (a) in the case organization. The Commission is determining how much time companies
of the Regulated Funds and the publishing this notice to solicit should be given to cure within the
Affiliated Funds, the pro rata comments on the proposed rule change context of that maximum 12 months and
transaction fees described above and from interested persons. what is required to be eligible for that
fees or other compensation described in additional time. As such, the Exchange
condition 2(c)(iii)(C); and (b) in the case I. Self-Regulatory Organization’s believes that the NYSE’s process for
of an Adviser, investment advisory fees Statement of the Terms of Substance of dealing with delayed filings is more
paid in accordance with the agreement the Proposed Rule Change stringent and more transparent than its
between the Adviser and the Regulated The Exchange proposes to harmonize own and believes that it is appropriate
Fund or Affiliated Fund. the requirements of the NYSE MKT to harmonize its own process with that
14. If the Holders own in the aggregate Company Guide (the ‘‘Company Guide’’) of the NYSE. The Exchange also
more than 25 percent of the Shares of with respect to periodic reporting with proposes to harmonize its requirements
a Regulated Fund, then the Holders will those of the NYSE. The proposed rule with respect to semi-annual reporting by
vote such Shares as directed by an change is available on the Exchange’s foreign private issuers with that of the
independent third party when voting on Web site at www.nyse.com, at the NYSE, as the NYSE requirement is more
(1) the election of directors; (2) the principal office of the Exchange, and at precise. This greater precision will
removal of one or more directors; or (3) the Commission’s Public Reference enable the Exchange to subject this
any other matter under either the 1940 Room. semi-annual reporting obligation to the
Act or applicable state law affecting the same compliance regime as it is
Board’s composition, size or manner of II. Self-Regulatory Organization’s proposing for other delayed filings.
election. Statement of the Purpose of, and
15. Each Regulated Fund’s chief Statutory Basis for, the Proposed Rule Semi-Annual Reporting by Foreign
compliance officer, as defined in rule Change Private Issuers
38a–1(a)(4), will prepare an annual In its filing with the Commission, the Section 110(d) of the Company Guide
report for its Board each year that self-regulatory organization included currently requires all foreign-
evaluates (and documents the basis of statements concerning the purpose of, incorporated listed companies to
that evaluation) the Regulated Fund’s and basis for, the proposed rule change publish, at least semi-annually, an
compliance with the terms and and discussed any comments it received English language version of their
conditions of the application and the on the proposed rule change. The text interim financial statements. As part of
procedures established to achieve such of those statements may be examined at its harmonization with the rules of the
compliance. the places specified in Item IV below. NYSE and adoption of a more explicit
For the Commission, by the Division of The Exchange has prepared summaries, compliance approach,4 the Exchange
Investment Management, under delegated set forth in sections A, B, and C below, proposes to adopt new Section 110(e) as
authority. of the most significant parts of such a more specific interim reporting
Eduardo A. Aleman, statements. requirement for listed foreign private
Assistant Secretary. issuers.5 Under proposed Section
A. Self-Regulatory Organization’s 110(e), each listed foreign private issuer
[FR Doc. 2017–09643 Filed 5–11–17; 8:45 am]
Statement of the Purpose of, and the will be required, at a minimum, to
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule submit to the SEC a Form 6–K that
Change includes (i) an interim balance sheet as
SECURITIES AND EXCHANGE 1. Purpose of the end of its second fiscal quarter
COMMISSION and (ii) a semi-annual income statement
The Exchange proposes to harmonize that covers its first two fiscal quarters.
[Release No. 34–80619; File No. SR– the requirements of the Company Guide This Form 6–K must be submitted no
NYSEMKT–2017–23] with respect to periodic reporting with later than six months following the end
those of the NYSE. A consistent of the company’s second fiscal quarter.
Self-Regulatory Organizations; NYSE approach among the two NYSE sister
MKT LLC; Notice of Filing of Proposed The financial information included in
exchanges will avoid confusion among the Form 6–K must be presented in
Rule Change To Harmonize the investors and companies and their
Requirements of the NYSE MKT English, but does not have to be
service providers about the applicable reconciled to U.S. GAAP.
Company Guide With Respect to rules. Currently, the Exchange provides
Periodic Reporting With Those of the companies that are late in making Amendments to Chapter Six of the
NYSE required filings with a compliance plan Company Guide
May 8, 2017. under its general provisions for Section 610(a) currently requires
Pursuant to Section 19(b)(1) 1 of the companies that are non-compliant with listed companies to provide specific
Securities Exchange Act of 1934 (the Exchange rules, as set forth in Section enumerated disclosures with regard to
‘‘Act’’),2 and Rule 19b–4 thereunder,3 1009 of the Company Guide. Section outstanding options.6 The Exchange
notice is hereby given that, on April 25, 1009 gives the Exchange the discretion
2017, NYSE MKT LLC (the ‘‘Exchange’’ to grant companies up to 18 months to 4 See Section 203.03 of the NYSE Listed Company
cure events of noncompliance and does Manual.
or ‘‘NYSE MKT’’) filed with the 5 Foreign-incorporated listed companies that are
not provide specific guidance with
mstockstill on DSK30JT082PROD with NOTICES
Securities and Exchange Commission not foreign private issuers are required to file
(the ‘‘SEC’’ or ‘‘Commission’’) the respect to how compliance periods quarterly reports on Form 10–Q as domestic filers,
proposed rule change as described in should be administered for companies so proposed Section 110(e) is not relevant to them.
Items I and II below, which Items have late in submitting their filings. By Existing Section 110(e) will be renumbered as
contrast, Section 802.01E of the NYSE Section 110(f).
6 Section 610(a) provides that the company must
1 15 U.S.C.78s(b)(1). Listed Company Manual limits disclose in its annual report to security holders, for
2 15 U.S.C. 78a. companies to a maximum cure period of the year covered by the report: (a) The number of
3 17 CFR 240.19b–4. 12 months to submit all delayed filings unoptioned shares available at the beginning and at
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Document Created: 2017-05-12 01:09:36
Document Modified: 2017-05-12 01:09:36
| 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. | |
| Dates | The application was filed on September 12, 2016, and | |
| Contact | Rochelle Kauffman Plesset, Senior Counsel, or David Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). | |
| FR Citation | 82 FR 22165 |
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