83 FR 31808 - Altaba Inc.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 131 (July 9, 2018)
Federal Register Volume 83, Issue 131 (July 9, 2018)
| Page Range | 31808-31810 | |
| FR Document | 2018-14658 |
[Federal Register Volume 83, Number 131 (Monday, July 9, 2018)] [Notices] [Pages 31808-31810] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-14658] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33146; 812-14921] Altaba Inc. July 3, 2018. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice. ----------------------------------------------------------------------- Notice of application for an order under section 17(b) of the Investment Company Act of 1940 (the ``Act'') for an exemption from section 17(a) of the Act. Summary of Application: Applicant seeks an order that would permit in- kind repurchases of shares of the Fund held by certain affiliated stockholders of the Fund. Applicant: Altaba Inc. (the ``Fund''). Filing Dates: The application was filed on June 14, 2018, and amended on June 28, 2018. 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 applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on July 30, 2018, and should be accompanied by proof of service on applicant, 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. Applicant, 140 East 45th Street, 15th Floor, New York, New York 10017. FOR FURTHER INFORMATION CONTACT: Elizabeth G. Miller, Senior Counsel, at (202) 551-8707 or Aaron T. Gilbride, Branch Chief, at (202) 551-6825 (Chief [[Page 31809]] Counsel's Office, Division of Investment Management). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number, or 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. The Fund is a Delaware corporation registered as a closed-end, non-diversified management investment company under the Act. The Fund's investment objective is to seek to increase the price per share at which its common stock trades relative to the then-current values of its principal underlying assets, the Alibaba shares (defined below) and Yahoo Japan Corporation (``Yahoo Japan'') shares. It seeks to do this by reducing the discount at which it trades relative to the underlying value of its net assets (before giving effect to deferred taxes on unrealized appreciation). As of March 31, 2018, the Fund's assets consist of the following: Alibaba Group Holding Limited (``Alibaba'') ordinary shares and American Depositary Shares (``Alibaba ADSs'' and together with the Alibaba ordinary shares, ``Alibaba shares''); Yahoo Japan shares of common stock; miscellaneous investments in equity securities and warrants issued by public and private operating companies; cash, cash equivalents, and short-term marketable debt securities (the ``Marketable Debt Securities Portfolio''); and a portfolio of intellectual property assets held in a wholly-owned subsidiary, Excalibur IP, LLC. Shares of the Fund are listed and trade on the Nasdaq Global Select Market. The Fund is internally managed by its executive officers under the supervision of the Board of Directors and does not currently intend to depend on a third-party investment adviser, except that the Fund has hired BlackRock Advisors, LLC (``BlackRock'') and Morgan Stanley Smith Barney LLC (together with BlackRock, the ``External Advisers'') as external investment advisers to manage its Marketable Debt Securities Portfolio. Each External Adviser is an investment adviser registered under the Investment Advisers Act of 1940 and manages approximately half of the Marketable Debt Securities Portfolio. 2. The Fund proposes to conduct a tender offer for up to 195,000,000 shares of the Fund's outstanding common stock, representing approximately 24% of the Fund's outstanding shares (the ``In-Kind Repurchase Offer''). Payment for any shares repurchased during the In- Kind Repurchase Offer would be made in-kind through a pro rata distribution of the Fund's Alibaba ADSs and cash. Applicant states that if a greater number of shares is tendered for repurchase than the total amount offered to be repurchased in the In-Kind Repurchase Offer, each participating stockholder will receive a pro rata share of the distribution in proportion to the total shares accepted for repurchase by Applicant. The In-Kind Repurchase Offer will be made pursuant to section 23(c)(2) of the Act and conducted in accordance with rule 13e-4 under the Securities Exchange Act of 1934. 3. Applicant states that the In-Kind Repurchase Offer is designed to minimize disruption to the market price of Alibaba ADSs relative to a sale of Alibaba ADSs to raise cash to finance a cash tender offer and therefore minimizing the impact on the investments of stockholders who remain invested in the Fund after the In-Kind Repurchase Offer or who own Alibaba ADSs outside the Fund. Applicant further states that, under the In-Kind Repurchase Offer, the Fund will minimize transaction costs associated with selling shares to conduct a cash tender offer. 4. Applicant requests relief to permit (a) any common stockholders of the Fund who are ``affiliated persons'' of the Fund within the meaning of section 2(a)(3)(A) of the Act or (b) second-tier affiliates of the Fund because the External Advisers are affiliates of the Fund within the meaning of Section 2(a)(3)(E) of the Act (each, an ``Affiliated Stockholder'') to participate in the proposed In-Kind Repurchase Offer. Applicant's Legal Analysis 1. Section 17(a) of the Act prohibits an affiliated person of a registered investment company, or any affiliated person of the person, acting as principal, from knowingly purchasing or selling any security or other property from or to the company. Section 2(a)(3)(A) and (E) of the Act define an ``affiliated person'' of another person to include any person who directly or indirectly owns, controls, or holds with power to vote 5% or more of the outstanding voting securities of the other person and any investment adviser of an investment company, respectively. Applicant states that to the extent that the In-Kind Repurchase Offer could be deemed the purchase or sale of securities by an Affiliated Stockholder, the transactions would be prohibited by section 17(a). Accordingly, Applicant requests an exemption from section 17(a) of the Act to the extent necessary to permit the participation of Affiliated Stockholders in the In-Kind Repurchase Offer. 2. Section 17(b) of the Act authorizes the Commission to exempt any transaction from the provisions of section 17(a) if the terms of the transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned, and the transaction is consistent with the policy of each registered investment company and with the general purposes of the Act. 3. Applicant asserts that the terms of the In-Kind Repurchase Offer meet the requirements of sections 17(b) of the Act. Applicant asserts that neither the Fund nor an Affiliated Stockholder has any choice as to the amount or form of consideration to be received as proceeds from the In-Kind Repurchase Offer. Instead, each tendering stockholder will receive, for each Fund share tendered, the same amount of Alibaba ADSs and the same amount of cash. If a greater number of shares is tendered for repurchase than the total amount offered to be repurchased in the In-Kind Repurchase Offer, each participating stockholder will receive a pro rata share of the distribution in proportion to the total shares accepted for repurchase by Applicant. Moreover, Applicant states that the portfolio securities to be offered and exchanged in the In-Kind Repurchase Offer will be valued in accordance with section 2(a)(41) of the Act, which will be an objective, verifiable standard that removes any discretion of an Affiliated Stockholder to conduct the In-Kind Repurchase Offer at a price that would be beneficial or detrimental to the interests of any particular stockholder. Applicant further states that the In-Kind Repurchase Offer is consistent with the Fund's investment policies. Applicant represents that the In-Kind Repurchase Offer is consistent with the general purposes of the Act because the interests of all stockholders are equally protected and no Affiliated Stockholder would receive an advantage or special benefit not available to any other stockholder participating in the In-Kind Repurchase Offer. Applicant's Conditions Applicant agrees that any order granting the requested relief will be subject to the following conditions: 1. Applicant will distribute to stockholders participating in the In-Kind Repurchase Offer cash and an in-kind pro rata distribution of Alibaba ADSs which represent approximately [[Page 31810]] 80% of the Fund's total assets and are publicly traded on a United States stock exchange like shares of the Fund's common stock. The number of Alibaba shares to be exchanged per tendered Fund share will be based on a fixed exchange ratio. The amount of cash to be paid per tendered Fund share will be equal to a fixed multiple applied to the volume weighted average price for Alibaba ADSs on the second to last full trading day of the In-Kind Repurchase Offer. Stockholders will not be given a choice as to the amount or form of consideration. Each tendering stockholder will receive, for each Fund share tendered, the same number of Alibaba ADSs and the same amount of cash. 2. The Alibaba ADSs offered and exchanged to stockholders pursuant to the In-Kind Repurchase Offer are securities that are listed on a public securities market for which quoted bid and asked prices are available. 3. The Alibaba ADSs offered and exchanged to stockholders pursuant to the In-Kind Repurchase Offer will be valued in the same manner as they would be valued for purposes of computing Applicant's net asset value, consistent with the requirements of section 2(a)(41) of the Act. 4. Applicant will maintain and preserve for a period of not less than six years from the end of the fiscal year in which the In-Kind Repurchase Offer occurs, the first two years in an easily accessible place, a written record of the In-Kind Repurchase Offer, that includes the identity of each stockholder of record that participated in the In- Kind Repurchase Offer, whether that stockholder was an Affiliated Stockholder, a description of each security distributed, the terms of the distribution, and the information or materials upon which the valuation was made. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-14658 Filed 7-6-18; 8:45 am] BILLING CODE P
![31808 Federal Register / Vol. 83, No. 131 / Monday, July 9, 2018 / Notices
proposed changes implicate competition change should be approved or For the Commission, by the Division of
at all. disapproved. Trading and Markets, pursuant to delegated
authority.19
C. Self-Regulatory Organization’s IV. Solicitation of Comments Eduardo A. Aleman,
Statement on Comments on the Assistant Secretary.
Proposed Rule Change Received From Interested persons are invited to
[FR Doc. 2018–14551 Filed 7–6–18; 8:45 am]
Members, Participants, or Others submit written data, views and
arguments concerning the foregoing, BILLING CODE P
Written comments were neither including whether the proposed rule
solicited nor received. change is consistent with the Act.
SECURITIES AND EXCHANGE
III. Date of Effectiveness of the Comments may be submitted by any of
COMMISSION
Proposed Rule Change and Timing for the following methods:
Commission Action [Investment Company Act Release No.
Electronic Comments 33146; 812–14921]
Because the proposed rule change
does not (i) significantly affect the • Use the Commission’s internet
Altaba Inc.
protection of investors or the public comment form (http://www.sec.gov/
interest; (ii) impose any significant rules/sro.shtml); or July 3, 2018.
burden on competition; and (iii) become • Send an email to rule-comments@ AGENCY: Securities and Exchange
operative for 30 days from the date on sec.gov. Please include File Number SR– Commission (‘‘Commission’’).
which it was filed, or such shorter time IEX–2018–12 on the subject line. ACTION: Notice.
as the Commission may designate, it has
become effective pursuant to Section Paper Comments Notice of application for an order
19(b)(3)(A) of the Act 14 and Rule 19b– under section 17(b) of the Investment
• Send paper comments in triplicate Company Act of 1940 (the ‘‘Act’’) for an
4(f)(6) thereunder.15
to Brent J. Fields, Secretary, Securities exemption from section 17(a) of the Act.
A proposed rule change filed and Exchange Commission, 100 F Street
pursuant to Rule 19b–4(f)(6) under the SUMMARY OF APPLICATION: Applicant
NE, Washington, DC 20549–1090.
Act 16 normally does not become seeks an order that would permit in-
operative for 30 days after the date of its All submissions should refer to File kind repurchases of shares of the Fund
filing. However, Rule 19b–4(f)(6)(iii) 17 Number SR–IEX–2018–12. This file held by certain affiliated stockholders of
permits the Commission to designate a number should be included in the the Fund.
shorter time if such action is consistent subject line if email is used. To help the APPLICANT: Altaba Inc. (the ‘‘Fund’’).
with the protection of investors and the Commission process and review your FILING DATES: The application was filed
public interest. The Exchange has asked comments more efficiently, please use on June 14, 2018, and amended on June
the Commission to waive the 30-day only one method. The Commission will 28, 2018.
operative delay so that the proposal may post all comments on the Commission’s HEARING OR NOTIFICATION OF HEARING: An
become operative upon filing. The internet website (http://www.sec.gov/ order granting the requested relief will
Commission does not believe that any rules/sro.shtml). Copies of the be issued unless the Commission orders
new or novel issues are raised by the submission, all subsequent a hearing. Interested persons may
proposal; the proposal aligns IEX’s rule amendments, all written statements request a hearing by writing to the
with the rule of Nasdaq and FINRA. The with respect to the proposed rule Commission’s Secretary and serving
Commission believes the waiver of the change that are filed with the applicant with a copy of the request,
operative delay is consistent with the Commission, and all written personally or by mail. Hearing requests
protection of investors and the public communications relating to the should be received by the Commission
interest. Therefore, the Commission proposed rule change between the by 5:30 p.m. on July 30, 2018, and
hereby waives the operative delay and Commission and any person, other than should be accompanied by proof of
designates the proposal operative upon those that may be withheld from the service on applicant, in the form of an
filing.18 public in accordance with the affidavit or, for lawyers, a certificate of
At any time within 60 days of the provisions of 5 U.S.C. 552, will be service. Pursuant to rule 0–5 under the
filing of the proposed rule change, the available for website viewing and Act, hearing requests should state the
Commission summarily may printing in the Commission’s Public nature of the writer’s interest, any facts
temporarily suspend such rule change if Reference Room, 100 F Street NE, bearing upon the desirability of a
it appears to the Commission that such Washington, DC 20549. Copies of the hearing on the matter, the reason for the
action is necessary or appropriate in the filing will also be available for request, and the issues contested.
public interest, for the protection of inspection and copying at the IEX’s Persons who wish to be notified of a
investors, or otherwise in furtherance of principal office and on its internet hearing may request notification by
the purposes of the Act. If the writing to the Commission’s Secretary.
website at www.iextrading.com. All
Commission takes such action, the
comments received will be posted ADDRESSES: Secretary, U.S. Securities
Commission shall institute proceedings
without change. Persons submitting and Exchange Commission, 100 F Street
to determine whether the proposed rule
comments are cautioned that we do not NE, Washington, DC 20549–1090.
redact or edit personal identifying Applicant, 140 East 45th Street, 15th
sradovich on DSK3GMQ082PROD with NOTICES
14 15 U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b–4(f)(6).
information from comment submissions. Floor, New York, New York 10017.
16 Id. You should submit only information FOR FURTHER INFORMATION CONTACT:
17 17 CFR 240.19b–4(f)(6)(iii). that you wish to make available Elizabeth G. Miller, Senior Counsel, at
18 For purposes only of waiving the 30-day publicly. All submissions should refer (202) 551–8707 or Aaron T. Gilbride,
operative delay, the Commission has also to File Number SR–IEX–2018–12 and Branch Chief, at (202) 551–6825 (Chief
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
should be submitted on or before July
15 U.S.C. 78c(f). 30, 2018. 19 17 CFR 200.30–3(a)(12).
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![31810 Federal Register / Vol. 83, No. 131 / Monday, July 9, 2018 / Notices
80% of the Fund’s total assets and are SECURITIES AND EXCHANGE the most significant aspects of such
publicly traded on a United States stock COMMISSION statements.
exchange like shares of the Fund’s A. Self-Regulatory Organization’s
[Release No. 34–83587; File No. SR–CBOE–
common stock. The number of Alibaba 2018–051] Statement of the Purpose of, and
shares to be exchanged per tendered Statutory Basis for, the Proposed Rule
Fund share will be based on a fixed Self-Regulatory Organizations; Cboe Change
exchange ratio. The amount of cash to Exchange, Inc.; Notice of Filing and
be paid per tendered Fund share will be Immediate Effectiveness of a Proposed 1. Purpose
equal to a fixed multiple applied to the Rule Change To Amend Its Fees The Exchange proposes to amend its
volume weighted average price for Schedule With Respect to Expiring Fee Fees Schedule relating to various fee
Alibaba ADSs on the second to last full Waivers and Remove the FLEX Trader waivers and the Flex Trader Incentive
trading day of the In-Kind Repurchase Incentive Program Program that are set to expire June 30,
Offer. Stockholders will not be given a July 3, 2018.
2018.
choice as to the amount or form of Pursuant to Section 19(b)(1) of the VIX and Select Sector License Index
consideration. Each tendering Securities Exchange Act of 1934 (the Surcharge
stockholder will receive, for each Fund ‘‘Act’’),1 and Rule 19b–4 thereunder,2
share tendered, the same number of The Exchange first proposes to extend
notice is hereby given that on July 2, the current waiver of the VIX and Select
Alibaba ADSs and the same amount of 2018, Cboe Exchange, Inc. (the
cash. Sector Index License Surcharge of $0.10
‘‘Exchange’’ or ‘‘Cboe Options’’) filed per contract for Clearing Trading Permit
2. The Alibaba ADSs offered and with the Securities and Exchange Holder Proprietary (‘‘Firm’’) (origin
exchanged to stockholders pursuant to Commission (the ‘‘Commission’’) the codes ‘‘F’’ or ‘‘L’’) VIX and Select Sector
the In-Kind Repurchase Offer are proposed rule change as described in orders that have a premium of $0.10 or
securities that are listed on a public Items I and II below, which Items have lower and have series with an
securities market for which quoted bid been prepared by the Exchange. The expiration of seven (7) calendar days or
and asked prices are available. Exchange filed the proposal as a ‘‘non- less. The Exchange adopted the current
controversial’’ proposed rule change waiver to reduce transaction costs on
3. The Alibaba ADSs offered and pursuant to Section 19(b)(3)(A)(iii) of
exchanged to stockholders pursuant to expiring, low-priced VIX and Select
the Act 3 and Rule 19b–4(f)(6) Sector options, which the Exchange
the In-Kind Repurchase Offer will be thereunder.4 The Commission is
valued in the same manner as they believed would encourage Firms to seek
publishing this notice to solicit to close and/or roll over such positions
would be valued for purposes of comments on the proposed rule change close to expiration at low premium
computing Applicant’s net asset value, from interested persons. levels, including facilitating customers
consistent with the requirements of
I. Self-Regulatory Organization’s to do so, in order to free up capital and
section 2(a)(41) of the Act. encourage additional trading. The
Statement of the Terms of Substance of
4. Applicant will maintain and the Proposed Rule Change Exchange had proposed to waive the
preserve for a period of not less than six surcharge through June 30, 2018, at
The Exchange proposes to amend its
years from the end of the fiscal year in which time the Exchange had stated that
Fees Schedule relating to various fee
which the In-Kind Repurchase Offer waivers and the Flex Trader Incentive it would evaluate whether the waiver
occurs, the first two years in an easily Program that are set to expire June 30, has in fact prompted Firms to close and
accessible place, a written record of the 2018. roll over these positions close to
In-Kind Repurchase Offer, that includes The text of the proposed rule change expiration as intended. The Exchange
the identity of each stockholder of is available on the Exchange’s website believes the waiver encourages Firms to
record that participated in the In-Kind (http://www.cboe.com/AboutCBOE/ do so and as such, proposes to extend
Repurchase Offer, whether that CBOELegalRegulatoryHome.aspx), at the waiver of the surcharge through
stockholder was an Affiliated the Exchange’s Office of the Secretary, December 31, 2018, at which time the
Stockholder, a description of each and at the Commission’s Public Exchange will again reevaluate whether
security distributed, the terms of the Reference Room. the waiver has continued to prompt
distribution, and the information or Firms to close and roll over positions
II. Self-Regulatory Organization’s close to expiration at low premium
materials upon which the valuation was
Statement of the Purpose of, and levels. Accordingly, the Exchange
made. Statutory Basis for, the Proposed Rule proposes to delete the reference to the
For the Commission, by the Division of Change current waiver period of June 30, 2018
Investment Management, under delegated from the Fees Schedule and replace it
In its filing with the Commission, the
authority. with December 31, 2018.
Exchange included statements
Eduardo A. Aleman, concerning the purpose of and basis for Extended Trading Hour Fees
Assistant Secretary. the proposed rule change and discussed
[FR Doc. 2018–14658 Filed 7–6–18; 8:45 am] any comments it received on the In order to promote and encourage
proposed rule change. The text of these trading during the Extended Trading
BILLING CODE P
statements may be examined at the Hours (‘‘ETH’’) session, the Exchange
currently waives ETH Trading Permit
sradovich on DSK3GMQ082PROD with NOTICES
places specified in Item IV below. The
Exchange has prepared summaries, set and Bandwidth Packet fees for one (1)
forth in Sections A, B, and C below, of of each initial Trading Permits and one
(1) of each initial Bandwidth Packet, per
1 15 U.S.C. 78s(b)(1). affiliated TPH. The Exchange notes that
2 17 CFR 240.19b–4. waiver is set to expire June 30, 2018.
3 15 U.S.C. 78s(b)(3)(A)(iii). The Exchange also waives fees through
4 17 CFR 240.19b–4(f)(6). June 30, 2018 for a CMI and FIX login
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Document Created: 2018-07-07 00:41:50
Document Modified: 2018-07-07 00:41:50
| 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 June 14, 2018, and amended on June 28, 2018. | |
| Contact | Elizabeth G. Miller, Senior Counsel, at (202) 551-8707 or Aaron T. Gilbride, Branch Chief, at (202) 551-6825 (Chief Counsel's Office, Division of Investment Management). | |
| FR Citation | 83 FR 31808 |
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