82 FR 49880 - Blackstone/GSO Floating Rate Enhanced Income Fund, et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 207 (October 27, 2017)

Page Range		49880-49882
FR Document		2017-23368

Federal Register, Volume 82 Issue 207 (Friday, October 27, 2017)

[Federal Register Volume 82, Number 207 (Friday, October 27, 2017)]
[Notices]
[Pages 49880-49882]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-23368]

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

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32866; 812-14796]

Blackstone/GSO Floating Rate Enhanced Income Fund, et al.

October 23, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

Notice of application for an order under sections 6(c) and 23(c)(3)
of the Investment Company Act of 1940 (the ``Act'') for an exemption
from rule 23c-3 under the Act.

Summary of Application: Applicants request an order under sections 6(c)
and 23(c)(3) of the Act for an exemption from certain provisions of
rule 23c-3 to permit certain registered closed-end investment companies
to make repurchase offers on a monthly basis.

Applicants: Blackstone/GSO Floating Rate Enhanced Income Fund
(``BGFREI''), GSO/Blackstone Debt Funds Management LLC (the
``Adviser''), and Blackstone Advisory Partners L.P. (the
``Distributor'').

Filing Dates: The application was filed on July 3, 2017 and amended on
October 17, 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 November 17, 2017, 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: 345 Park Avenue,
31st Floor, New York, NY 10154.

FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, 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. BGFREI is a Delaware statutory trust that is registered under
the Act as a continuously offered, non-diversified, closed-end
management investment company that will be operated as an

[[Page 49881]]

interval fund. BGFREI's investment objective is to provide attractive
income with low sensitivity to rising interest rates. 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 BGFREI. The Distributor is a Delaware
partnership, is a registered broker-dealer and a member of the
Financial Industry Regulatory Authority, Inc. (``FINRA''), and is
BGFREI's principal underwriter and distributor.
2. Applicants request that any relief granted also apply to any
registered closed-end management investment company that operates as an
interval fund pursuant to rule 23c-3 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 (the ``Future Funds'', together with BGFREI, the
``Funds'', and each, individually, a ``Fund'').\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\ All entities currently intending to rely on the requested
relief have been named as applicants. Any entity that relies on the
requested order in the future will do so only in accordance with the
terms and conditions of the application.
---------------------------------------------------------------------------

3. BGFREI's investment objective is to provide attractive income
with low sensitivity to rising interest rates. BGFREI has applied for
exemptive relief from the Commission to permit BGFREI to issue multiple
classes of shares and to impose asset-based distribution fees and an
early withdrawal charge.\3\ BGFREI currently intends to offer three
classes of shares, Class T, Class D and Class I, to the public at net
asset value plus any applicable sales charge. From time to time the
Funds may create additional classes of shares, the terms of which may
differ from BGFREI's Class T, Class D and Class I shares. BGFREI's
common shares are not listed on any securities exchange, and BGFREI
anticipates that no secondary market will develop for the common
shares.
---------------------------------------------------------------------------

\3\ See In the Matter of Blackstone/GSO Floating Rate Enhanced
Income Fund, et al., File Number 812-14795.
---------------------------------------------------------------------------

4. Applicants request an order to permit each Fund to offer to
repurchase a portion of its common shares at one-month intervals,
rather than the three, six, or twelve-month intervals specified by rule
23c-3.
5. Each Fund will disclose in its prospectus and annual reports its
fundamental policy to make monthly offers to repurchase a portion of
its common shares at net asset value, less deduction of a repurchase
fee, if any, as permitted by rule 23c-3(b)(1), and the imposition of
early withdrawal charges to the extent permitted pursuant to exemptive
relief granted by the Commission. The fundamental policy will be
changeable only by a majority vote of the holders of such Fund's
outstanding voting securities. Under the fundamental policy, the
repurchase offer amount will be determined by the board of trustees of
the applicable Fund (``Board'') prior to each repurchase offer. Each
Fund will comply with rule 23c-3(b)(8)'s requirements with respect to
its trustees who are not interested persons of such Fund, within the
meaning of section 2(a)(19) of the Act (``Disinterested Trustees'') and
their legal counsel. Under its fundamental policy, each Fund will make
monthly offers to repurchase not less than 5% of its outstanding shares
at the time of the repurchase request deadline. The repurchase offer
amounts for the then-current monthly period, plus the repurchase offer
amounts for the two monthly periods immediately preceding the then-
current monthly period, will not exceed 25% of the outstanding common
shares of the applicable Fund.
6. The prospectus of each Fund will state the means to determine
the repurchase request deadline and the maximum number of days between
each repurchase request deadline and the repurchase pricing date. Each
Fund's repurchase pricing date normally will be the same date as the
repurchase request deadline and pricing will be determined after close
of business on that date.
7. Pursuant to rule 23c-3(b)(1), each Fund will repurchase shares
for cash on or before the repurchase payment deadline, which will be no
later than seven calendar days after the repurchase pricing date.
BGFREI (and any Future Fund) currently intends to make payment on the
next business day following the repurchase pricing date. Each Fund will
make payment for shares repurchased in the previous month's repurchase
offer at least five business days before sending notification of the
next repurchase offer. BGFREI will, and a Future Fund may, deduct a
repurchase fee in an amount not to exceed 2% from the repurchase
proceeds payable to tendering shareholders, in compliance with rule
23c-3(b)(1).
8. Each Fund will provide common shareholders with notification of
each repurchase offer no less than seven days and no more than fourteen
days prior to the repurchase request deadline. The notification will
include all information required by rule 23c-3(b)(4)(i). Each Fund will
file the notification and the Form N-23c-3 with the Commission within
three business days after sending the notification to its respective
common shareholders.
9. The Funds will not suspend or postpone a repurchase offer except
pursuant to the vote of a majority of its Disinterested Trustees, and
only under the limited circumstances specified in rule 23c-3(b)(3)(i).
The Funds will not condition a repurchase offer upon tender of any
minimum amount of shares. In addition, each Fund will comply with the
pro ration and other allocation requirements of rule 23c-3(b)(5) if
common shareholders tender more than the repurchase offer amount.
Further, each Fund will permit tenders to be withdrawn or modified at
any time until the repurchase request deadline, but will not permit
tenders to be withdrawn or modified thereafter.
10. From the time a Fund sends its notification to shareholders of
the repurchase offer until the repurchase pricing date, a percentage of
such Fund's assets equal to at least 100% of the repurchase offer
amount will consist of: (a) Assets that can be sold or disposed of in
the ordinary course of business at approximately the price at which
such Fund has valued such investment within a period equal to the
period between the repurchase request deadline and the repurchase
payment deadline; or (b) assets that mature by the next repurchase
payment deadline. In the event the assets of a Fund fail to comply with
this requirement, the Board will cause such Fund to take such action as
it deems appropriate to ensure compliance.
11. In compliance with the asset coverage requirements of section
18 of the Act, any senior security issued by, or other indebtedness of,
a Fund will either mature by the next repurchase pricing date or
provide for such Fund's ability to call, repay or redeem such senior
security or other indebtedness by the next repurchase pricing date,
either in whole or in part, without penalty or premium, as necessary to
permit that Fund to complete the repurchase offer in such amounts
determined by its Board.
12. The Board of each Fund will adopt written procedures to ensure
that such Fund's portfolio assets are sufficiently liquid so that it
can comply with its fundamental policy on repurchases and the liquidity
requirements of rule 23c-3(b)(10)(i). The Board of each Fund will
review the overall composition of the portfolio and make and approve
such changes to the procedures as it deems necessary.

[[Page 49882]]

Applicants' Legal Analysis

1. 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
rule 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 Act.
2. Section 23(c) of the Act provides in relevant part that no
registered closed-end investment company shall purchase any securities
of any class 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 such other
circumstances as the Commission may permit by rules and regulations or
orders for the protection of investors.
3. Rule 23c-3 under the Act permits a registered closed-end
investment company to make repurchase offers for its common stock at
net asset value at periodic intervals pursuant to a fundamental policy
of the investment company. ``Periodic interval'' is defined in rule
23c-3(a)(1) as an interval of three, six, or twelve months. Rule 23c-
3(b)(4) requires that notification of each repurchase offer be sent to
shareholders no less than 21 calendar days and no more than 42 calendar
days before the repurchase request deadline.
4. Applicants request an order pursuant to sections 6(c) and 23(c)
of the Act exempting them from rule 23c-3(a)(1) to the extent necessary
to permit the Funds to make monthly repurchase offers. Applicants also
request an exemption from the notice provisions of rule 23c-3(b)(4) to
the extent necessary to permit each Fund to send notification of an
upcoming repurchase offer to shareholders at least seven days but no
more than fourteen calendar days in advance of the repurchase request
deadline.
5. Applicants contend that monthly repurchase offers are in the
shareholders' best interests and consistent with the policies
underlying rule 23c-3. Applicants assert that monthly repurchase offers
will provide investors with more liquidity than quarterly repurchase
offers. Applicants assert that shareholders will be better able to
manage their investments and plan transactions, because if they decide
to forego a repurchase offer, they will only need to wait one month for
the next offer. Applicants also contend that the portfolio of each Fund
will be managed to provide ample liquidity for monthly repurchase
offers. Applicants do not believe that a change to monthly repurchases
would necessitate any change in portfolio management practices of any
of the Funds in order to satisfy rule 23c-3. In fact, applicants expect
limited or no impact on overall portfolio management or performance of
such Funds upon converting to monthly offers and believe that it may be
easier to manage the cash of the portfolio for the smaller monthly
offers compared to the larger quarterly ones.
6. Applicants propose to send notification to shareholders at least
seven days, but no more than fourteen calendar days, in advance of a
repurchase request deadline. Applicants assert that, because BGFREI
(and any Future Fund) currently intends to make payment on the next
business day following the pricing date, the entire procedure can be
completed before the next notification is sent out to shareholders;
thus avoiding any overlap. Applicants believe that these procedures
will eliminate any possibility of investor confusion. Applicants also
state that monthly repurchase offers will be a fundamental feature of
the Funds, and their prospectuses will provide a clear explanation of
the repurchase program.
7. Applicants submit that for the reasons given above the requested
relief is appropriate in the public interest and is consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act.

Applicants' Conditions

Applicants agree that any order granting the requested relief shall
be subject to the following conditions:
1. BGFREI (and any Future Fund relying on this relief) will make a
repurchase offer pursuant to rule 23c-3(b) for a repurchase offer
amount of not less than 5% in any one-month period. In addition, the
repurchase offer amount for the then-current monthly period, plus the
repurchase offer amounts for the two monthly periods immediately
preceding the then-current monthly period, will not exceed 25% of
BGFREI's (or Future Fund's, as applicable) outstanding common shares.
BGFREI (and any Future Fund relying on this relief) may repurchase
additional tendered shares pursuant to rule 23c-3(b)(5) only to the
extent the percentage of additional shares so repurchased does not
exceed 2% in any three-month period.
2. Payment for repurchased shares will occur at least five business
days before notification of the next repurchase offer is sent to
shareholders of BGFREI (or Future Fund relying on this relief).

For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-23368 Filed 10-26-17; 8:45 am]
BILLING CODE 8011-01-P

Document Created: 2017-10-27 02:06:29
Document Modified: 2017-10-27 02:06:29

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 July 3, 2017 and amended on October 17, 2017.
Contact		Asen Parachkevov, Senior Counsel, or David Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		82 FR 49880