Raymond James Employee Investment Fund I, L.P., et al.; Notice of Application, 58910-58916 [E7-20444]
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Federal Register / Vol. 72, No. 200 / Wednesday, October 17, 2007 / Notices
NUCLEAR REGULATORY
COMMISSION
Independent External Review Panel To
Identify Vulnerabilities in the U.S.
Nuclear Regulatory Commission’s
Materials Licensing Program: Meeting
Notice
U.S. Nuclear Regulatory
Commission.
ACTION: Notice of meeting.
AGENCY:
SUMMARY: NRC will convene a meeting
of the Independent External Review
Panel to Identify Vulnerabilities in the
U.S. Nuclear Regulatory Commission’s
Materials Licensing Program on October
30, 2007. A sample of agenda items to
be discussed during the public session
includes: (1) Background of panel’s
development; (2) review of the panel’s
charter; and (3) initial planning for
future meetings and actions. A copy of
the agenda for the meeting can be
obtained by e-mailing Mr. Aaron T.
McCraw at the contact information
below.
Purpose: Discuss the scope of the review
panel’s objectives and initiate planning of
future meetings and actions.
Date and Time for Closed Sessions: There
will be no closed sessions during this
meeting.
Date and Time for Open Sessions: October
30, 2007, from 1 p.m. to 5 p.m.
Address for Public Meeting: U.S. Nuclear
Regulatory Commission, Two White Flint
North Building, Room T3C2, 11545 Rockville
Pike, Rockville, Maryland 20852.
Public Participation: Any member of the
public who wishes to participate in the
meeting should contact Mr. McCraw using
the information below.
Contact Information: Aaron T. McCraw, email: atm@nrc.gov, telephone: (301) 415–
1277.
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Conduct of the Meeting
Mr. Thomas E. Hill will chair the
meeting. Mr. Hill will conduct the
meeting in a manner that will facilitate
the orderly conduct of business. The
following procedures apply to public
participation in the meeting:
1. Persons who wish to provide a
written statement should submit an
electronic copy to Mr. McCraw at the
contact information listed above. All
submittals must be received by October
23, 2007, and must pertain to the topic
on the agenda for the meeting.
2. Questions and comments from
members of the public will be permitted
during the meeting, at the discretion of
the Chairman.
3. The transcript and written
comments will be available for
inspection at the NRC Public Document
Room, 11555 Rockville Pike, Rockville,
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Maryland 20852–2738, telephone (800)
397–4209, on or about January 30, 2008.
4. Persons who require special
services, such as those for the hearing
impaired, should notify Mr. McCraw of
their planned attendance.
This meeting will be held in
accordance with the Atomic Energy Act
of 1954, as amended (primarily Section
161a); the Federal Advisory Committee
Act (5 U.S.C. App); and the
Commission’s regulations in Title 10,
U.S. Code of Federal Regulations, Part 7.
Dated: October 11, 2007.
Andrew L. Bates,
Advisory Committee Management Officer.
[FR Doc. E7–20448 Filed 10–16–07; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: U.S. Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Rule 17a–7; SEC File No. 270–147; OMB
Control No. 3235–0131.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information discussed below.
Rule 17a–7 (17 CFR 240.17a–7) under
the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) requires non-resident
broker-dealers registered or applying for
registration pursuant to section 15 of the
Exchange Act to maintain—in the
United States—complete and current
copies of books and records required to
be maintained under any rule adopted
under the Securities Exchange Act of
1934. Alternatively, Rule 17a–7
provides that the non-resident brokerdealer may sign a written undertaking to
furnish the requisite books and records
to the Commission upon demand.
There are approximately 54 nonresident broker-dealers. Based on the
Commission’s experience in this area, it
is estimated that the average amount of
time necessary to preserve the books
and records required by Rule 17a–7 is
one hour per year. Accordingly, the total
burden is 54 hours per year. With an
average cost per hour of approximately
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$245, the total cost of compliance for
the respondents is $13,230 per year.
There are no individual record
retention periods in Rule 17a–7.
Compliance with the rule is mandatory.
However, non-resident broker-dealers
may opt to provide the records upon
request of the Commission rather than
store the records in the United States.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Comments should be directed to (i)
Desk Officer for the Securities and
Exchange Commission, Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Room 10102, New Executive Office
Building, Washington, DC 20503 or by
sending an e-mail to
Alexander_T._Hunt@omb.eop.gov; and
(ii) R. Corey Booth, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Shirley
Martinson, 6432 General Green Way,
Alexandria, VA 22312 or send an e-mail
to: PRA_Mailbox@sec.gov. Comments
must be submitted within 30 days of
this notice.
October 11, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–20457 Filed 10–16–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
28012; 813–326]
Raymond James Employee Investment
Fund I, L.P., et al.; Notice of
Application
October 11, 2007.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order under sections 6(b) and 6(e) of the
Investment Company Act of 1940 (the
‘‘Act’’) granting an exemption from all
provisions of the Act, except section 9,
and sections 36 through 53, and the
rules and regulations under the Act.
With respect to sections 17 and 30 of the
Act, and the rules and regulations
thereunder, and rule 38a–1 under the
Act, the exemption is limited as set
forth in the application.
AGENCY:
Applicants
request an order to exempt certain
limited partnerships and other
investment vehicles formed for the
benefit of eligible employees of
SUMMARY OF APPLICATION:
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Federal Register / Vol. 72, No. 200 / Wednesday, October 17, 2007 / Notices
Raymond James Financial, Inc. (‘‘RJF’’)
and its affiliates from certain provisions
of the Act. Each partnership or other
investment vehicle will be an
‘‘employees’’ securities company’’
within the meaning of section 2(a)(13) of
the Act.
APPLICANTS: Raymond James Employee
Investment Fund I, L.P. and Raymond
James Employee Investment Fund II,
L.P. (together, the ‘‘Initial
Partnerships’’), RJF, and RJEIF, Inc.
FILING DATES: The application was filed
on February 21, 2001, and amended on
October 5, 2007.
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
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 November 5, 2007, and
should be accompanied by proof of
service on applicant, in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the writer’s interest, 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, The Raymond James
Financial Center, 880 Carillon Parkway,
St. Petersburg, Florida 33716.
FOR FURTHER INFORMATION CONTACT:
Laura J. Riegel, Senior Counsel, at (202)
551–6873, or Julia K. Gilmer, Branch
Chief, at (202) 551–6821 (Division of
Investment Management, Office of
Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained for a fee at the
Commission’s Public Reference Branch,
100 F Street, NE., Washington DC
20549–0102 (telephone (202) 551–5850).
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Applicants’ Representations
1. RJF is a diversified financial
services holding company organized
under the laws of Florida, whose
subsidiaries engage primarily in
investment and financial planning,
including securities and insurance
brokerage, investment banking, asset
management, banking and cash
management and trust services. RJF and
its ‘‘Affiliates,’’ as defined in rule 12b–
2 under the Securities Exchange Act of
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1934 (the ‘‘1934 Act’’), are referred to
collectively as ‘‘Raymond James.’’
2. The Initial Partnerships are limited
partnerships organized under the laws
of the state of Delaware. RJEIF, Inc.
serves as the general partner and
investment adviser to the Initial
Partnerships. Applicants may offer
additional investment vehicles identical
in all material respects (other than
investment objectives and strategies and
form of organization) that may be
offered in the future to the same class
of investors as those investing in the
Initial Partnerships (together with the
Initial Partnerships, the ‘‘Partnerships’’).
Each Partnership will be a limited
partnership or other investment vehicle
formed as an ‘‘employees’ securities
company’’ within the meaning of
section 2(a)(13) and will operate as a
closed-end, non-diversified,
management investment company.1
Each Partnership has been established
or will be established primarily for the
benefit of highly compensated
employees of Raymond James as part of
a program designed to create capital
building opportunities that are
competitive with those at other
investment banking firms and to
facilitate recruitment of high caliber
professionals.
3. The general partner of each
Partnership will be an Affiliate of RJF
(‘‘General Partner’’). Any partner in a
Partnership other than a General Partner
is a ‘‘Limited Partner’’ or ‘‘Participant.’’
The General Partner will manage,
operate, and control each of the
1 Applicants also may implement a pretax plan
arrangement (‘‘Pretax Plan’’). In this case, no
investment vehicle will be formed with respect to
such Pretax Plan. Pursuant to a Pretax Plan,
Raymond James will enter into arrangements with
certain Eligible Employees, as defined below, of
Raymond James, which will generally provide that
(a) an Eligible Employee will defer a portion of his
or her compensation payable by Raymond James,
(b) such deferred compensation will be treated as
having been notionally invested in investments
designated for these purposes pursuant to the
specific compensation plan, and (c) an Eligible
Employee will be entitled to receive cash, securities
or other property at the times and in the amounts
set forth in the specific compensation plan, where
the aggregate amount received by such Eligible
Employee would be based upon the investment
performance of the investments designated for these
purposes pursuant to such compensation plan. The
Pretax Plan will not actually purchase or sell any
securities. Raymond James expects to offer, through
Pretax Plans, economic benefits comparable to what
would have been offered in an arrangement where
an investment vehicle is formed. For purposes of
the application, a Partnership will be deemed to be
formed with respect to each Pretax Plan and each
reference in the application to ‘‘Partnership,’’
‘‘capital contribution,’’ ‘‘General Partner,’’ ‘‘Limited
Partner,’’ ‘‘loans,’’ and ‘‘Interest’’ will be deemed to
refer to the Pretax Plan, the notional capital
contribution to the Pretax Plan, Raymond James, a
participant of the Pretax Plan, notional loans, and
participation rights in the Pretax Plan, respectively.
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Partnerships. The General Partner will
be authorized to delegate investment
management responsibility only to a
Raymond James entity or a committee of
Raymond James employees. The
ultimate responsibility for the
Partnerships’ investments will remain
with the General Partner. Any Raymond
James entity that is delegated the
responsibility of making investment
decisions for a Partnership will register
as an investment adviser under the
Investment Advisers Act of 1940 (the
‘‘Advisers Act’’) if required under
applicable law. The General Partner,
Raymond James or any employee of the
General Partner or Raymond James may
be entitled to receive a performancebased fee (such as a ‘‘carried interest’’)
based on the gains and losses of the
investment program or of the
Partnership’s investment portfolio.2 All
Partnership investments are referred to
herein collectively as ‘‘Portfolio
Investments.’’
4. Interests in the Partnerships
(‘‘Interests’’) will be offered without
registration in reliance on section 4(2) of
the Securities Act of 1933 (the
‘‘Securities Act’’), or Regulation D under
the Securities Act, and will be sold only
to ‘‘Eligible Employees’’ and ‘‘Qualified
Participants,’’ in each case as defined
below, or to Raymond James entities.3
Prior to offering Interests to an Eligible
Employee, the General Partner must
reasonably believe that the Eligible
Employee will be a sophisticated
investor capable of understanding and
evaluating the risks of participating in
the Partnership without the benefit of
regulatory safeguards.
5. An ‘‘Eligible Employee’’ is (a) an
individual who is a current or former
employee, officer, director, or
‘‘Consultant’’ of Raymond James and,
except for certain individuals who
manage the day-to-day affairs of the
Partnership in question (‘‘Managing
2 A ‘‘carried interest’’ is an allocation to the
General Partner, Limited Partner or the Raymond
James entity acting as the investment adviser to a
Partnership based on net gains in addition to the
amount allocable to such entity in proportion to its
capital contributions. A General Partner, Limited
Partner or Raymond James entity that is registered
as an investment adviser under the Advisers Act
may charge a carried interest only if permitted by
rule 205–3 under the Advisers Act. Any carried
interest paid to a General Partner, Limited Partner
or Raymond James entity that is not registered
under the Advisers Act also will comply with rule
205–3 as if such General Partner, Limited Partner
or Raymond James entity were so registered.
3 If applicants implement a Pretax Plan,
participation rights in such Pretax Plan will only be
offered to Eligible Employees who are current
employees or Consultants, as defined below, of
Raymond James.
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Employees’’) 4 and a limited number of
other employees of Raymond James 5
(collectively, ‘‘Non-Accredited
Investors’’), meets the standards of an
accredited investor under rule 501(a)(6)
of Regulation D under the Securities
Act, or (b) an entity that is a current or
former ‘‘Consultant’’ of Raymond James
and meets the standards of an
accredited investor under rule 501(a) of
Regulation D.6 A Partnership may not
have more than 35 Non-Accredited
Investors.
6. A ‘‘Qualified Participant,’’ is an
individual or entity (a) that is an
Eligible Family Member or Qualified
Investment Vehicle (in each case as
defined below) of an Eligible Employee,
and (b) if the individual or entity is
purchasing an Interest from a
Partnership, comes within one of the
categories of an ‘‘accredited investor’’
under rule 501(a) of Regulation D. An
‘‘Eligible Family Member’’ is a spouse,
parent, child, spouse of child, brother,
sister, or grandchild of an Eligible
Employee, including step and adoptive
relationships. A ‘‘Qualified Investment
Vehicle’’ is (a) a trust of which the
trustee, grantor and/or beneficiary is an
Eligible Employee, (b) a partnership,
corporation or other entity controlled by
an Eligible Employee, or (c) a trust or
other entity established solely for the
benefit of Eligible Family Members of an
Eligible Employee.7
4 A Managing Employee may invest in a
Partnership if he or she meets the definition of
‘‘knowledgeable employee’’ in rule 3c–5(a)(4) under
the Act with the Partnership treated as though it
were a ‘‘Covered Company’’ for purposes of the
rule.
5 Such employees must meet the sophistication
requirements set forth in rule 506(b)(2)(ii) of
Regulation D under the Securities Act and may be
permitted to invest his or her own funds in the
Partnership if, at the time of the employee’s
investment in a Partnership, he or she (a) has a
graduate degree in business, law or accounting, (b)
has a minimum of five years of consulting,
investment banking or similar business experience,
and (c) has had reportable income from all sources
of at least $100,000 in each of the two most recent
years and a reasonable expectation of income from
all sources of at least $140,000 in each year in
which such person will be committed to make
investments in a Partnership. In addition, such an
employee will not be permitted to invest in any
year more than 10% of his or her income from all
sources for the immediately preceding year in the
aggregate in such Partnership and in all other
Partnerships in which he or she has previously
invested.
6 A ‘‘Consultant’’ is a person or entity whom
Raymond James has engaged on retainer to provide
services and professional expertise on an ongoing
basis as a regular consultant or as a business or legal
adviser and who shares a community of interest
with Raymond James and Raymond James
employees.
7 The inclusion of partnerships, corporations, or
other entities controlled by an Eligible Employee in
the definition of ‘‘Qualified Investment Vehicle’’ is
intended to enable Eligible Employees to make
investments in the Partnerships through personal
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7. The terms of a Partnership will be
fully disclosed to each Eligible
Employee and, if applicable, to a
Qualified Participant of the Eligible
Employee, in a partnership agreement
(the ‘‘Partnership Agreement’’), which
will be furnished at the time the Eligible
Employee is invited to participate in the
Partnership. Each Partnership will send
audited financial statements to each
Participant within 120 days or as soon
as practicable after the end of its fiscal
year, except for any Partnership that
was formed to make a single portfolio
investment (in which case audited
financial statements will be prepared for
either the Partnership or the entity that
is the single portfolio investment).8 In
addition, as soon as practicable after the
end of each tax year of a Partnership,
each Participant will receive a report
showing the Participant’s share of
income, credits, deductions, and other
tax items.
8. Interests in a Partnership will be
non-transferable except with the prior
written consent of the General Partner.9
No person will be admitted into a
Partnership unless the person is an
Eligible Employee, a Qualified
Participant of an Eligible Employee, or
a Raymond James entity. No sales load
will be charged in connection with the
sale of Interests.
9. An Eligible Employee’s interest in
a Partnership may be subject to
repurchase or cancellation if: (a) The
Eligible Employee’s relationship with
Raymond James is terminated for cause;
(b) the Eligible Employee becomes a
investment vehicles over which they exercise
investment discretion or vehicles the management
or affairs of which they otherwise control. In the
case of a partnership, corporation, or other entity
controlled by a Consultant entity, individual
participants will be limited to senior level
employees, members, or partners of the Consultant
who will be required to qualify as an ‘‘accredited
investor’’ under rule 501(a)(6) of Regulation D and
who will have access to the directors and officers
of the General Partner.
8 If applicants implement a Pretax Plan, Eligible
Employees participating in such Pretax Plan will be
furnished with a copy of the Pretax Plan, which
will set forth at a minimum the same terms of the
proposed investment program as those that would
have been set forth in a Partnership Agreement for
a Partnership. Raymond James will prepare an
audited informational statement with respect to the
investments deemed to be made by such Pretax
Plan, including, with respect to each investment,
the name of the portfolio company and the amount
deemed invested by such Pretax Plan in the
portfolio company. Raymond James will send each
participant of such Pretax Plan a separate statement
prepared based on the audited informational
statement within 120 days after the end of the fiscal
year of Raymond James or as soon as practicable
thereafter.
9 If applicants implement a Pretax Plan, an
Eligible Employee’s participation rights in such
Pretax Plan may not be transferred, other than to
a Qualified Participant in the event of the Eligible
Employee’s death.
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consultant to or joins any firm that the
General Partner determines, in its
reasonable discretion, is competitive
with any business of Raymond James; or
(c) the Eligible Employee voluntarily
resigns from employment with
Raymond James. Upon repurchase or
cancellation, the General Partner will
pay to the Eligible Employee at least the
lesser of (a) the amount actually paid by
the Eligible Employee to acquire the
Interest (less prior distributions, plus
interest), and (b) the fair market value of
the Interest as determined at the time of
repurchase or cancellation by the
General Partner. The terms of any
repurchase or cancellation will apply
equally to any Qualified Participant of
an Eligible Employee.
10. Subject to the terms of the
applicable Partnership Agreement, a
Partnership will be permitted to enter
into transactions involving (a) a
Raymond James entity, (b) a portfolio
company, (c) any Partner or person or
entity affiliated with a Partner, (d) an
investment fund or separate account
that is organized for the benefit of
investors who are not affiliated with
Raymond James and over which a
Raymond James entity will exercise
investment discretion or which is
sponsored by a Raymond James entity
(‘‘Third Party Fund’’), or (e) any person
or entity who is not affiliated with
Raymond James and is a partner or other
investor in a Third Party Fund or a third
party sponsored fund or pooled
investment vehicle that is not affiliated
with Raymond James (a ‘‘Third Party
Investor’’). Prior to entering into any of
these transactions, the General Partner
must determine that the terms are fair to
the Partners.
11. A Raymond James entity
(including the General Partner) acting as
agent or broker may receive placement
fees, advisory fees, or other
compensation from a Partnership or a
portfolio company in connection with a
Partnership’s purchase or sale of
securities, provided that such placement
fees, advisory fees, or other
compensation can be deemed to be
‘‘usual and customary.’’ Such fees or
other compensation will be deemed
‘‘usual and customary’’ only if (a) the
Partnership is purchasing or selling
securities with other unaffiliated third
parties, including Third Party Funds or
Third Party Investors, who are similarly
purchasing or selling securities, (b) the
fees or other compensation being
charged to the Partnership are also being
charged to the unaffiliated third parties,
including Third Party Funds or Third
Party Investors, and (c) the amount of
securities being purchased or sold by
the Partnership does not exceed 50% of
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the total amount of securities being
purchased or sold by the Partnership
and the unaffiliated third parties,
including Third Party Funds and Third
Party Investors. Raymond James entities,
including the General Partner, also may
be compensated for services to entities
in which the Partnerships invest and to
entities that are competitors of these
entities, and may otherwise engage in
normal business activities.
12. The Partnerships may borrow
from a General Partner or a Raymond
James entity. The interest rate on such
loans will be no less favorable to the
Partnerships than the rate that could be
obtained on an arm’s length basis. A
Partnership will not borrow from any
person if the borrowing would cause
any person not named in section
2(a)(13) of the Act to own outstanding
securities of the Partnership (other than
short-term paper). Any borrowing by a
Partnership will be non-recourse to the
Limited Partners of the Partnership,
except indebtedness incurred
specifically on behalf of a Limited
Partner where such Limited Partner has
agreed to guarantee the loan or act as coobligor on the loan.
13. A Partnership will not invest more
than 15% of its assets in securities
issued by registered investment
companies (with the exception of
temporary investments in money market
funds). A Partnership will not acquire
any security issued by a registered
investment company if immediately
after the acquisition; the Partnership
will own more than 3% of the
outstanding voting stock of the
registered investment company.
Applicants’ Legal Analysis
1. Section 6(b) of the Act provides, in
part, that the Commission will exempt
employees’ securities companies from
the provisions of the Act to the extent
that the exemption is consistent with
the protection of investors. Section 6(b)
provides that the Commission will
consider, in determining the provisions
of the Act from which the company
should be exempt, the company’s form
of organization and capital structure, the
persons owning and controlling its
securities, the price of the company’s
securities and the amount of any sales
load, how the company’s funds are
invested, and the relationship between
the company and the issuers of the
securities in which it invests. Section
2(a)(13) defines an employees’ securities
company, in relevant part, as any
investment company all of whose
securities (other than short-term paper)
are beneficially owned (a) by current or
former employees, or persons on
retainer, of one or more affiliated
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employers, (b) by immediate family
members of such persons, or (c) by such
employer or employers together with
any of the persons in (a) or (b).
2. Section 7 of the Act generally
prohibits investment companies that are
not registered under section 8 of the Act
from selling or redeeming their
securities. Section 6(e) of the Act
provides that, in connection with any
order exempting an investment
company from any provision of section
7, certain provisions of the Act, as
specified by the Commission, will be
applicable to the company and other
persons dealing with the company as
though the company were registered
under the Act. Applicants request an
order under sections 6(b) and 6(e) of the
Act exempting applicants and any
Subsequent Partnerships from all
provisions of the Act, except section 9
and sections 36 through 53 of the Act,
and the rules and regulations under the
Act. With respect to sections 17 and 30
of the Act, and the rules and regulations
thereunder, and rule 38a-1 under the
Act, the exemption is limited as set
forth in the application.
3. Section 17(a) generally prohibits
any affiliated person of a registered
investment company, or any affiliated
person of an affiliated person, acting as
principal, from knowingly selling or
purchasing any security or other
property to or from the company.
Applicants request an exemption from
section 17(a) to permit: (a) A Raymond
James entity or a Third Party Fund,
acting as principal, to engage in any
transaction directly or indirectly with
any Partnership or any company
controlled by the Partnership; (b) any
Partnership to invest in or engage in any
transaction with any Raymond James
entity, acting as principal, (i) in which
the Partnership, any company
controlled by the Partnership, or any
Raymond James entity or Third Party
Fund has invested or will invest, or (ii)
with which the Partnership, any
company controlled by the Partnership,
or any Raymond James entity or Third
Party Fund is or will become affiliated;
and (c) any Third Party Investor, acting
as principal, to engage in any
transaction directly or indirectly with a
Partnership or any company controlled
by the Partnership.
4. Applicants state that an exemption
from section 17(a) is consistent with the
protection of investors and is necessary
to promote the purpose of each
Partnership. Applicants state that the
Participants in each Partnership will be
fully informed of the possible extent of
the Partnership’s dealings with
Raymond James. Applicants also state
that, as professionals employed in
PO 00000
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Fmt 4703
Sfmt 4703
58913
investment banking and financial
planning, Participants in each
Partnership will be able to understand
and evaluate the attendant risks.
Applicants assert that the community of
interest among the Participants and
Raymond James will provide the best
protection against any risk of abuse.
5. Section 17(d) of the Act and rule
17d–1 under the Act prohibit any
affiliated person of a registered
investment company, or any affiliated
person of such person, acting as
principal, from participating in any joint
arrangement with the company unless
authorized by the Commission.
Applicants request relief to permit
affiliated persons of each Partnership, or
affiliated persons of any of these
persons, to participate in any joint
arrangement in which the Partnership or
a company controlled by the
Partnership is a participant.
6. Applicants assert that compliance
with section 17(d) would cause the
Partnerships to forgo investment
opportunities simply because a
Participant or other affiliated person of
the Partnerships (or any affiliate of the
affiliated person) made or is
concurrently making a similar
investment. Applicants also state that
because certain attractive investment
opportunities often require that each
participant make available funds in an
amount substantially greater than that
available to one Partnership alone, there
may be attractive opportunities that a
Partnership may be unable to take
advantage of except by co-investing
with other persons, including affiliated
persons. Applicants assert that the
flexibility to structure co-investments
and joint investments will not involve
abuses of the type section 17(d) and rule
17d–1 were designed to prevent.
7. Co-investments with a Third Party
Fund, or by a Raymond James entity
pursuant to a contractual obligation to a
Third Party Fund, will not be subject to
condition 3 below. Applicants note that
it is common for a Third Party Fund to
require that Raymond James invest its
own capital in Third Party Fund
investments, and that Raymond James
investments be subject to substantially
the same terms as those applicable to
the Third Party Fund. Applicants
believe it is important that the interests
of the Third Party Fund take priority
over the interests of the Partnerships,
and that the Third Party Fund not be
burdened or otherwise affected by
activities of the Partnerships. In
addition, applicants assert that the
relationship of a Partnership to a Third
Party Fund is fundamentally different
from a Partnership’s relationship to
Raymond James. Applicants contend
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that the focus of, and the rationale for,
the protections contained in the
requested relief are to protect the
Partnerships from any overreaching by
Raymond James in the employer/
employee context, whereas the same
concerns are not present with respect to
the Partnerships and a Third Party
Fund.
8. Section 17(e) of the Act and rule
17e–1 under the Act limit the
compensation an affiliated person may
receive when acting as agent or broker
for a registered investment company.
Applicants request an exemption from
section 17(e) to permit a Raymond
James entity (including the General
Partner) that acts as an agent or broker
to receive placement fees, advisory fees,
or other compensation from a
Partnership in connection with the
purchase or sale by the Partnership of
securities, provided that the fees or
other compensation can be deemed
‘‘usual and customary.’’ Applicants state
that for the purposes of the application,
fees or other compensation will be
deemed ‘‘usual and customary’’ only if
(a) the Partnership is purchasing or
selling securities alongside other
unaffiliated third parties, including
Third Party Funds or Third Party
Investors, who are similarly purchasing
or selling securities, (b) the fees or other
compensation being charged to the
Partnership are also being charged to the
unaffiliated third parties, including
Third Party Funds and Third Party
Investors, and (c) the amount of
securities being purchased or sold by
the Partnership does not exceed 50% of
the total amount of securities being
purchased or sold by the Partnership
and the unaffiliated third parties,
including Third Party Funds or Third
Party Investors. Applicants assert that,
because Raymond James does not wish
it to appear as if it is favoring the
Partnerships, compliance with section
17(e) would prevent a Partnership from
participating in transactions where the
Partnership is being charged lower fees
than unaffiliated third parties.
Applicants assert that the fees or other
compensation paid by a Partnership to
a Raymond James entity will be the
same as those negotiated at arm’s length
with unaffiliated third parties.
9. Rule 17e–1(b) under the Act
requires that a majority of directors who
are not ‘‘interested persons’’ (as defined
in section 2(a)(19) of the Act) take
actions and make approvals regarding
commissions, fees, or other
remuneration. Rule 17e–1(c) under the
Act requires each Partnership to comply
with the fund governance standards
defined in rule 0–1(a)(7) under the Act.
Applicants request an exemption from
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19:05 Oct 16, 2007
Jkt 214001
rule 17e–1 to the extent necessary to
permit each Partnership to comply with
the rule without having a majority of the
directors of the General Partner who are
not interested persons take actions and
make determinations as set forth in
paragraph (b) of the rule, and without
having to satisfy the standards set forth
in paragraph (c) of the rule. Applicants
state that because all the directors of the
General Partner will be affiliated
persons, without the relief requested, a
Partnership could not comply with rule
17e–1. Applicants state that each
Partnership will comply with rule 17e–
1(b) by having a majority of the directors
of the Partnership take actions and make
approvals as are set forth in rule 17e–
1. Applicants state that each Partnership
will comply with all other requirements
of rule 17e–1.
10. Section 17(f) of the Act designates
the entities that may act as investment
company custodians, and rule 17f–1
under the Act imposes certain
requirements when the custodian is a
member of a national securities
exchange. Applicants request an
exemption from section 17(f) and rule
17f–1 to permit a Raymond James entity
to act as custodian of Partnership assets
without a written contract, as would be
required by rule 17f–1(a). Applicants
also request an exemption from the rule
17f–1(b)(4) requirement that an
independent accountant periodically
verify the assets held by the custodian.
Applicants state that, because of the
community of interest between
Raymond James and the Partnerships
and the existing requirement for an
independent audit, compliance with
these requirements would be
unnecessarily burdensome and
expensive. Applicants will comply with
all other requirements of rule 17f–1.
11. Section 17(g) of the Act and rule
17g–1 under the Act generally require
the bonding of officers and employees of
a registered investment company who
have access to its securities or funds.
Rule 17g–1 requires that a majority of
directors who are not interested persons
take certain actions and give certain
approvals relating to fidelity bonding.
Applicants request exemptive relief to
permit the General Partner’s directors,
who may be deemed interested persons,
to take actions and make determinations
set forth in the rule. Applicants state
that, because all directors of the General
Partner will be affiliated persons, a
Partnership could not comply with rule
17g–1 without the requested relief.
Specifically, each Partnership will
comply with rule 17g–1 by having a
majority of the Partnership’s directors
take actions and make determinations as
are set forth in rule 17g–1. Applicants
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Fmt 4703
Sfmt 4703
also state that each Partnership will
comply with all other requirements of
rule 17g–1, except that the Partnerships
request an exemption from the
requirements of paragraphs (g) and (h)
or rule 17g–1 relating to the filing of
copies of fidelity bonds and related
information with the Commission and
relating to this provision of notices to
the board of directors, and an exemption
from the requirements of paragraph
(j)(3) of rule 17g–1 that the Partnerships
comply with the fund governance
standards defined in rule 0–1(a)(7).
12. Section 17(j) of the Act and
paragraph (b) of rule 17j–1 under the
Act make it unlawful for certain
enumerated persons to engage in
fraudulent or deceptive practices in
connection with the purchase or sale of
a security held or to be acquired by a
registered investment company. Rule
17j–1 also requires that every registered
investment company adopt a written
code of ethics and that every access
person of a registered investment
company report personal securities
transactions. Applicants request an
exemption from the provisions of rule
17j–1, except for the anti-fraud
provisions of paragraph (b), because
they are unnecessarily burdensome as
applied to the Partnerships.
13. Applicants request an exemption
from the requirements in sections 30(a),
30(b), and 30(e) of the Act, and the rules
under those sections, that registered
investment companies prepare and file
with the Commission and mail to their
shareholders certain periodic reports
and financial statements. Applicants
contend that the forms prescribed by the
Commission for periodic reports have
little relevance to a Partnership and
would entail administrative and legal
costs that outweigh any benefit to the
Participants. Applicants request
exemptive relief to the extent necessary
to permit each Partnership to report
annually to its Participants. Applicants
also request an exemption from section
30(h) of the Act to the extent necessary
to exempt the General Partner of each
Partnership, directors and officers of the
General Partnership and any other
persons who may be deemed to be
members of an advisory board of a
Partnership from filing Forms 3, 4, and
5 under section 16(a) of the 1934 Act
with respect to their ownership of
Interests in the Partnership. Applicants
assert that, because there will be no
trading market and the transfers of
Interests will be severely restricted,
these filings are unnecessary for the
protection of investors and burdensome
to those required to make them.
14. Rule 38a–1 requires investment
companies to adopt, implement and
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sroberts on PROD1PC70 with NOTICES
periodically review written policies
reasonable designed to prevent violation
of the federal securities law and to
appoint a chief compliance officer. Each
Partnership will comply will rule 38a–
1(a), (c) and (d), except that (a) because
the Partnership does not have a board of
directors, the board of directors of the
General Partner will fulfill the
responsibilities assigned to the
Partnership’s board of directors under
the rule, (b) because the board of
directors of the General Partner does not
have any disinterested members,
approval by a majority of the
disinterested board members required
by rule 38a–1 will not be obtained, and
(c) because the board of directors of the
General Partner does not have any
independent members, the Partnerships
will comply with the requirement in
rule 38a–1(a)(4)(iv) that the chief
compliance officer meet with the
independent board members by having
the chief compliance officer meet with
the board of directors of the General
Partner as constituted.
Applicants’ Conditions
Applicants agree that any order
granting the requested relief will be
subject to the following conditions:
1. Each proposed transaction
otherwise prohibited by section 17(a) or
section 17(d) and rule 17d to which a
Partnership is a party (the ‘‘Section 17
Transactions’’) will be effected only if
the General Partner determines that:
(a) The terms of the Section 17
Transaction, including the
consideration to be paid or received, are
fair and reasonable to the Partners of the
participating Partnership and do not
involve overreaching of such
Partnership or its Partners on the part of
any person concerned; and
(b) The Section 17 Transaction is
consistent with the interests of the
Partners of the participating
Partnership, such Partnership’s
organizational documents and such
Partnership’s reports to its Partners.
In addition, the General Partner will
record and will preserve a description of
all Section 17 Transactions, the General
Partner’s findings and the information
or materials upon which the General
Partner’s findings are based and the
basis for the findings. All such records
will be maintained for the life of the
Partnership and at least six years
thereafter, and will be subject to
examination by the Commission and its
staff. Each Partnership will preserve the
accounts, books and other documents
required to be maintained in an easily
accessible place for the first two years.
2. In connection with the Section 17
Transactions, the General Partner will
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19:05 Oct 16, 2007
Jkt 214001
adopt, and periodically review and
update, procedures designed to ensure
that reasonable inquiry is made, prior to
the consummation of any Section 17
Transaction, with respect to the possible
involvement in the transaction of any
affiliated person or promoter of or
principal underwriter for such
Partnership, or any affiliated person of
such a person, promoter or principal
underwriter.
3. The General Partner will not make
on behalf of a Partnership any
investment in which a ‘‘ Co-Investor’’
with respect to any Partnership (as
defined below) has acquired or proposes
to acquire the same class of securities of
the same issuer, where the investment
involves a joint enterprise or other joint
arrangement within the meaning of rule
17d–1 in which such Partnership and
the Co-Investor are participants, unless
any such Co-Investor, prior to disposing
of all or part of its investment, (a) gives
such General Partner sufficient, but not
less than one day’s notice of its intent
to dispose of its investment; and (b)
refrains from disposing of its investment
unless the participating Partnership
holding such investment has the
opportunity to dispose of its investment
prior to or concurrently with, on the
same terms as, and on a pro rata basis
with the Co-Investor. The term ‘‘CoInvestor’’ with respect to any
Partnership means any person who is:
(a) An ‘‘affiliated person’’ (as defined in
section 2(a)(3) of the Act) of such
Partnership (other than a Third Party
Fund); (b) a Raymond James entity; (c)
an officer or director of a Raymond
James entity; or (d) an entity (other than
a Third Party Fund) in which the
General Partner acts as a general partner
or has a similar capacity to control the
sale or other disposition of the entity’s
securities.
The restrictions contained in this
condition, however, shall not be
deemed to limit or prevent the
disposition of an investment by a CoInvestor: (a) To its direct or indirect
wholly-owned subsidiary, to any
company (a ‘‘Parent’’) of which such CoInvestor is a direct or indirect whollyowned subsidiary, or to a direct or
indirect wholly-owned subsidiary of its
Parent; (b) to immediate family
members of such Co-Investor, including
step and adoptive relationships, or to a
trust or other investment vehicle
established for any such immediate
family member; (c) when the investment
is comprised of securities that are listed
on any exchange registered as a national
securities exchange under section 6 of
the 1934 Act; (d) when the investment
is comprised of securities that are
national market system securities
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Fmt 4703
Sfmt 4703
58915
pursuant to section 11A(a)(2) of the
1934 Act and rule 11Aa2–1 thereunder;
(e) when the investment is comprised of
securities that are listed or traded on
any foreign securities exchange or board
of trade that satisfies regulatory
requirements under the law of the
jurisdiction in which such foreign
securities exchange or board of trade is
organized similar to those that apply to
a national securities exchange or a
national market system for securities; or
(f) when the investment is comprised of
securities that are government securities
as defined in section 2(a)(16) of the Act.
4. Each Partnership and its General
Partner will maintain and preserve, for
the life of such Partnership and at least
six years thereafter, such accounts,
books, and other documents as
constitute the record forming the basis
for the audited financial statements that
are to be provided to the Participants in
such Partnership, and each annual
report of such Partnership required to be
sent to such Participants, and agree that
all such records will be subject to
examination by the Commission and its
staff. Each Partnership will preserve the
accounts, books and other documents
required to be maintained in an easily
accessible place for the first two years.
5. The General Partner of each
Partnership will send to each
Participant in that Partnership, at any
time during the fiscal year then ended,
Partnership financial statements audited
by such Partnership’s independent
accountants, except in the case of a
Partnership formed to make a single
Portfolio Investment. In such cases,
financial statements will be unaudited,
but each Participant will receive
financial statements of the single
Portfolio Investment audited by such
entity’s independent accountants. At the
end of each fiscal year, the General
Partner will make a valuation or have a
valuation made of all of the assets of the
Partnership as of such fiscal year end in
a manner consistent with customary
practice with respect to the valuation of
assets of the kind held by the
Partnership. In addition, within 120
days after the end of each fiscal year of
each Partnership or as soon as
practicable thereafter, the General
Partner will send a report to each person
who was a Participant at any time
during the fiscal year then ended,
setting forth such tax information as
shall be necessary for the preparation by
the Participant of his, her or its U.S.
federal and state income tax returns and
a report of the investment activities of
the Partnership during that fiscal year.
6. If a Partnership makes purchases or
sales from or to an entity affiliated with
the Partnership by reason of an officer,
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director or employee of Raymond James
(a) serving as an officer, director, general
partner or investment adviser of the
entity, or (b) having a 5% or more
investment in the entity, such
individual will not participate in the
Partnership’s determination of whether
or not to effect the purchase or sale.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–20444 Filed 10–16–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56640; File No. SR–CBOE–
2007–118]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Its Marketing
Fee Program
October 11, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
1, 2007, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by the Exchange.
CBOE has designated this proposal as
one establishing or changing a due, fee,
or other charge imposed by CBOE under
Section 19(b)(3)(A)(ii) of the Act 3 and
Rule 19b–4(f)(2) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sroberts on PROD1PC70 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to amend its
Marketing Fee Program. The text of the
proposed rule change is available at the
Exchange, the Commission’s Public
Reference Room, and https://
www.cboe.com.
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change, and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. CBOE
has substantially prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Recently, CBOE amended its
Marketing Fee Program to, among other
things, collect an administrative fee to
offset its costs in administering the
marketing fee program and also to
provide funds to the association of
members for its costs and expenses in
supporting CBOE’s marketing fee
program and in seeking to bring order
flow to CBOE.5 Under the amended
Marketing Fee Program, CBOE collects
an administrative fee of .45% on the
total amount of funds collected each
month prior to making the remaining
funds available to DPMs and Preferred
Market-Makers to attract orders to
CBOE.
CBOE now proposes to limit the total
amount that any Market-Maker, RMM,
e–DPM, or DPM would contribute to the
administrative fee. Specifically, CBOE
proposes to amend its Marketing Fee
Program such that no Market-Maker,
RMM, e–DPM, or DPM would
contribute more than 15% of the total
amount collected by the .45%
administrative fee. As amended, if the
assessment of CBOE’s marketing fee
resulted in any Market-Maker, RMM, e–
DPM or DPM contributing more than
15% of the funds collected for the
administrative fee, the amount of money
in excess of the 15% would not be
allocated to the administrative fee and
instead would be allocated to the DPMs
or Preferred Market-Makers to attract
orders to CBOE.
The following is an example of how
this 15% limit would be applied, where
there is one DPM and three MarketMakers on CBOE, and collectively they
generated $100,000 in marketing fee
1 15
2 17
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19:05 Oct 16, 2007
5 See Securities Exchange Release No. 56289
(August 20, 2007), 72 FR 49030 (August 27, 2007)
(SR–CBOE–2007–95).
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funds in August. The administration fee
of .45% would be collected from the
total amount of funds collected, i.e.,
$100,000, resulting in $450. Assume
that based on their trading in August,
the DPM accounted for 70%, or $70,000,
of the marketing fee funds collected in
August, and each of the Market-Makers
accounted for 10%, or $10,000 each.
CBOE would then determine whether
the DPM or any of the Market-Makers
contributed more than 15% of the total
funds collected and allocated to the
.45% admin fee (15% of $450 is $67.50).
In this case, because the DPM accounted
for 70% of the marketing fee funds
available in August, the DPM also
would have accounted for 70% of the
$450 administration fee (or $315), since
the administration fee is a percentage
taken from the total amount of
marketing fee funds collected in
August.6
Because the DPM would have
contributed more than 15% of the total
amount of funds raised by the .45%
administrative fee, would be capped at
$67.50, and the balance of $247.50
($315¥$67.50) would be provided to
DPMs and Preferred Market-Makers to
pay for order flow. Accordingly, in
August the administration fee amount
would be $202.50 instead of $450.
CBOE intends to calculate the 15% limit
on a firm-wide basis. If a member
organization and its nominees operate
on the Exchange in various approved
statuses, such as a Market-Maker, RMM,
DPM or e–DPM, CBOE intends to
aggregate it and its nominees’ activity to
determine if the member firm exceeded
the 15% limit. CBOE believes that
limiting the total amount that any
Market-Maker, RMM, DPM, or e–DPM
would contribute to the administrative
fee is fair and reasonable and an
equitable allocation of fees.
CBOE proposes to implement these
changes to the marketing fee program
beginning on October 1, 2007. CBOE is
not amending its marketing fee program
in any other respects.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 7 in general, and
Section 6(b)(4) of the Act 8 in particular,
in that it is designed to provide for the
equitable allocation of reasonable dues,
6 A Market-Maker’s, RMM’s, e–DPM’s or DPM’s
percentage contribution to the total amount of
marketing fee funds collected in a month is directly
proportional to its percentage contribution to the
funds collected as part of the administration fee.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4).
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]]>Agencies
[Federal Register Volume 72, Number 200 (Wednesday, October 17, 2007)]
[Notices]
[Pages 58910-58916]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-20444]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 28012; 813-326]
Raymond James Employee Investment Fund I, L.P., et al.; Notice of
Application
October 11, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order under sections 6(b) and 6(e)
of the Investment Company Act of 1940 (the ``Act'') granting an
exemption from all provisions of the Act, except section 9, and
sections 36 through 53, and the rules and regulations under the Act.
With respect to sections 17 and 30 of the Act, and the rules and
regulations thereunder, and rule 38a-1 under the Act, the exemption is
limited as set forth in the application.
-----------------------------------------------------------------------
Summary of Application: Applicants request an order to exempt certain
limited partnerships and other investment vehicles formed for the
benefit of eligible employees of
[[Page 58911]]
Raymond James Financial, Inc. (``RJF'') and its affiliates from certain
provisions of the Act. Each partnership or other investment vehicle
will be an ``employees'' securities company'' within the meaning of
section 2(a)(13) of the Act.
Applicants: Raymond James Employee Investment Fund I, L.P. and Raymond
James Employee Investment Fund II, L.P. (together, the ``Initial
Partnerships''), RJF, and RJEIF, Inc.
Filing Dates: The application was filed on February 21, 2001, and
amended on October 5, 2007.
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 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 November 5, 2007, and should be accompanied by proof of service
on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, 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, The Raymond James
Financial Center, 880 Carillon Parkway, St. Petersburg, Florida 33716.
FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at
(202) 551-6873, or Julia K. Gilmer, Branch Chief, at (202) 551-6821
(Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington DC
20549-0102 (telephone (202) 551-5850).
Applicants' Representations
1. RJF is a diversified financial services holding company
organized under the laws of Florida, whose subsidiaries engage
primarily in investment and financial planning, including securities
and insurance brokerage, investment banking, asset management, banking
and cash management and trust services. RJF and its ``Affiliates,'' as
defined in rule 12b-2 under the Securities Exchange Act of 1934 (the
``1934 Act''), are referred to collectively as ``Raymond James.''
2. The Initial Partnerships are limited partnerships organized
under the laws of the state of Delaware. RJEIF, Inc. serves as the
general partner and investment adviser to the Initial Partnerships.
Applicants may offer additional investment vehicles identical in all
material respects (other than investment objectives and strategies and
form of organization) that may be offered in the future to the same
class of investors as those investing in the Initial Partnerships
(together with the Initial Partnerships, the ``Partnerships''). Each
Partnership will be a limited partnership or other investment vehicle
formed as an ``employees' securities company'' within the meaning of
section 2(a)(13) and will operate as a closed-end, non-diversified,
management investment company.\1\ Each Partnership has been established
or will be established primarily for the benefit of highly compensated
employees of Raymond James as part of a program designed to create
capital building opportunities that are competitive with those at other
investment banking firms and to facilitate recruitment of high caliber
professionals.
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\1\ Applicants also may implement a pretax plan arrangement
(``Pretax Plan''). In this case, no investment vehicle will be
formed with respect to such Pretax Plan. Pursuant to a Pretax Plan,
Raymond James will enter into arrangements with certain Eligible
Employees, as defined below, of Raymond James, which will generally
provide that (a) an Eligible Employee will defer a portion of his or
her compensation payable by Raymond James, (b) such deferred
compensation will be treated as having been notionally invested in
investments designated for these purposes pursuant to the specific
compensation plan, and (c) an Eligible Employee will be entitled to
receive cash, securities or other property at the times and in the
amounts set forth in the specific compensation plan, where the
aggregate amount received by such Eligible Employee would be based
upon the investment performance of the investments designated for
these purposes pursuant to such compensation plan. The Pretax Plan
will not actually purchase or sell any securities. Raymond James
expects to offer, through Pretax Plans, economic benefits comparable
to what would have been offered in an arrangement where an
investment vehicle is formed. For purposes of the application, a
Partnership will be deemed to be formed with respect to each Pretax
Plan and each reference in the application to ``Partnership,''
``capital contribution,'' ``General Partner,'' ``Limited Partner,''
``loans,'' and ``Interest'' will be deemed to refer to the Pretax
Plan, the notional capital contribution to the Pretax Plan, Raymond
James, a participant of the Pretax Plan, notional loans, and
participation rights in the Pretax Plan, respectively.
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3. The general partner of each Partnership will be an Affiliate of
RJF (``General Partner''). Any partner in a Partnership other than a
General Partner is a ``Limited Partner'' or ``Participant.'' The
General Partner will manage, operate, and control each of the
Partnerships. The General Partner will be authorized to delegate
investment management responsibility only to a Raymond James entity or
a committee of Raymond James employees. The ultimate responsibility for
the Partnerships' investments will remain with the General Partner. Any
Raymond James entity that is delegated the responsibility of making
investment decisions for a Partnership will register as an investment
adviser under the Investment Advisers Act of 1940 (the ``Advisers
Act'') if required under applicable law. The General Partner, Raymond
James or any employee of the General Partner or Raymond James may be
entitled to receive a performance-based fee (such as a ``carried
interest'') based on the gains and losses of the investment program or
of the Partnership's investment portfolio.\2\ All Partnership
investments are referred to herein collectively as ``Portfolio
Investments.''
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\2\ A ``carried interest'' is an allocation to the General
Partner, Limited Partner or the Raymond James entity acting as the
investment adviser to a Partnership based on net gains in addition
to the amount allocable to such entity in proportion to its capital
contributions. A General Partner, Limited Partner or Raymond James
entity that is registered as an investment adviser under the
Advisers Act may charge a carried interest only if permitted by rule
205-3 under the Advisers Act. Any carried interest paid to a General
Partner, Limited Partner or Raymond James entity that is not
registered under the Advisers Act also will comply with rule 205-3
as if such General Partner, Limited Partner or Raymond James entity
were so registered.
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4. Interests in the Partnerships (``Interests'') will be offered
without registration in reliance on section 4(2) of the Securities Act
of 1933 (the ``Securities Act''), or Regulation D under the Securities
Act, and will be sold only to ``Eligible Employees'' and ``Qualified
Participants,'' in each case as defined below, or to Raymond James
entities.\3\ Prior to offering Interests to an Eligible Employee, the
General Partner must reasonably believe that the Eligible Employee will
be a sophisticated investor capable of understanding and evaluating the
risks of participating in the Partnership without the benefit of
regulatory safeguards.
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\3\ If applicants implement a Pretax Plan, participation rights
in such Pretax Plan will only be offered to Eligible Employees who
are current employees or Consultants, as defined below, of Raymond
James.
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5. An ``Eligible Employee'' is (a) an individual who is a current
or former employee, officer, director, or ``Consultant'' of Raymond
James and, except for certain individuals who manage the day-to-day
affairs of the Partnership in question (``Managing
[[Page 58912]]
Employees'') \4\ and a limited number of other employees of Raymond
James \5\ (collectively, ``Non-Accredited Investors''), meets the
standards of an accredited investor under rule 501(a)(6) of Regulation
D under the Securities Act, or (b) an entity that is a current or
former ``Consultant'' of Raymond James and meets the standards of an
accredited investor under rule 501(a) of Regulation D.\6\ A Partnership
may not have more than 35 Non-Accredited Investors.
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\4\ A Managing Employee may invest in a Partnership if he or she
meets the definition of ``knowledgeable employee'' in rule 3c-
5(a)(4) under the Act with the Partnership treated as though it were
a ``Covered Company'' for purposes of the rule.
\5\ Such employees must meet the sophistication requirements set
forth in rule 506(b)(2)(ii) of Regulation D under the Securities Act
and may be permitted to invest his or her own funds in the
Partnership if, at the time of the employee's investment in a
Partnership, he or she (a) has a graduate degree in business, law or
accounting, (b) has a minimum of five years of consulting,
investment banking or similar business experience, and (c) has had
reportable income from all sources of at least $100,000 in each of
the two most recent years and a reasonable expectation of income
from all sources of at least $140,000 in each year in which such
person will be committed to make investments in a Partnership. In
addition, such an employee will not be permitted to invest in any
year more than 10% of his or her income from all sources for the
immediately preceding year in the aggregate in such Partnership and
in all other Partnerships in which he or she has previously
invested.
\6\ A ``Consultant'' is a person or entity whom Raymond James
has engaged on retainer to provide services and professional
expertise on an ongoing basis as a regular consultant or as a
business or legal adviser and who shares a community of interest
with Raymond James and Raymond James employees.
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6. A ``Qualified Participant,'' is an individual or entity (a) that
is an Eligible Family Member or Qualified Investment Vehicle (in each
case as defined below) of an Eligible Employee, and (b) if the
individual or entity is purchasing an Interest from a Partnership,
comes within one of the categories of an ``accredited investor'' under
rule 501(a) of Regulation D. An ``Eligible Family Member'' is a spouse,
parent, child, spouse of child, brother, sister, or grandchild of an
Eligible Employee, including step and adoptive relationships. A
``Qualified Investment Vehicle'' is (a) a trust of which the trustee,
grantor and/or beneficiary is an Eligible Employee, (b) a partnership,
corporation or other entity controlled by an Eligible Employee, or (c)
a trust or other entity established solely for the benefit of Eligible
Family Members of an Eligible Employee.\7\
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\7\ The inclusion of partnerships, corporations, or other
entities controlled by an Eligible Employee in the definition of
``Qualified Investment Vehicle'' is intended to enable Eligible
Employees to make investments in the Partnerships through personal
investment vehicles over which they exercise investment discretion
or vehicles the management or affairs of which they otherwise
control. In the case of a partnership, corporation, or other entity
controlled by a Consultant entity, individual participants will be
limited to senior level employees, members, or partners of the
Consultant who will be required to qualify as an ``accredited
investor'' under rule 501(a)(6) of Regulation D and who will have
access to the directors and officers of the General Partner.
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7. The terms of a Partnership will be fully disclosed to each
Eligible Employee and, if applicable, to a Qualified Participant of the
Eligible Employee, in a partnership agreement (the ``Partnership
Agreement''), which will be furnished at the time the Eligible Employee
is invited to participate in the Partnership. Each Partnership will
send audited financial statements to each Participant within 120 days
or as soon as practicable after the end of its fiscal year, except for
any Partnership that was formed to make a single portfolio investment
(in which case audited financial statements will be prepared for either
the Partnership or the entity that is the single portfolio
investment).\8\ In addition, as soon as practicable after the end of
each tax year of a Partnership, each Participant will receive a report
showing the Participant's share of income, credits, deductions, and
other tax items.
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\8\ If applicants implement a Pretax Plan, Eligible Employees
participating in such Pretax Plan will be furnished with a copy of
the Pretax Plan, which will set forth at a minimum the same terms of
the proposed investment program as those that would have been set
forth in a Partnership Agreement for a Partnership. Raymond James
will prepare an audited informational statement with respect to the
investments deemed to be made by such Pretax Plan, including, with
respect to each investment, the name of the portfolio company and
the amount deemed invested by such Pretax Plan in the portfolio
company. Raymond James will send each participant of such Pretax
Plan a separate statement prepared based on the audited
informational statement within 120 days after the end of the fiscal
year of Raymond James or as soon as practicable thereafter.
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8. Interests in a Partnership will be non-transferable except with
the prior written consent of the General Partner.\9\ No person will be
admitted into a Partnership unless the person is an Eligible Employee,
a Qualified Participant of an Eligible Employee, or a Raymond James
entity. No sales load will be charged in connection with the sale of
Interests.
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\9\ If applicants implement a Pretax Plan, an Eligible
Employee's participation rights in such Pretax Plan may not be
transferred, other than to a Qualified Participant in the event of
the Eligible Employee's death.
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9. An Eligible Employee's interest in a Partnership may be subject
to repurchase or cancellation if: (a) The Eligible Employee's
relationship with Raymond James is terminated for cause; (b) the
Eligible Employee becomes a consultant to or joins any firm that the
General Partner determines, in its reasonable discretion, is
competitive with any business of Raymond James; or (c) the Eligible
Employee voluntarily resigns from employment with Raymond James. Upon
repurchase or cancellation, the General Partner will pay to the
Eligible Employee at least the lesser of (a) the amount actually paid
by the Eligible Employee to acquire the Interest (less prior
distributions, plus interest), and (b) the fair market value of the
Interest as determined at the time of repurchase or cancellation by the
General Partner. The terms of any repurchase or cancellation will apply
equally to any Qualified Participant of an Eligible Employee.
10. Subject to the terms of the applicable Partnership Agreement, a
Partnership will be permitted to enter into transactions involving (a)
a Raymond James entity, (b) a portfolio company, (c) any Partner or
person or entity affiliated with a Partner, (d) an investment fund or
separate account that is organized for the benefit of investors who are
not affiliated with Raymond James and over which a Raymond James entity
will exercise investment discretion or which is sponsored by a Raymond
James entity (``Third Party Fund''), or (e) any person or entity who is
not affiliated with Raymond James and is a partner or other investor in
a Third Party Fund or a third party sponsored fund or pooled investment
vehicle that is not affiliated with Raymond James (a ``Third Party
Investor''). Prior to entering into any of these transactions, the
General Partner must determine that the terms are fair to the Partners.
11. A Raymond James entity (including the General Partner) acting
as agent or broker may receive placement fees, advisory fees, or other
compensation from a Partnership or a portfolio company in connection
with a Partnership's purchase or sale of securities, provided that such
placement fees, advisory fees, or other compensation can be deemed to
be ``usual and customary.'' Such fees or other compensation will be
deemed ``usual and customary'' only if (a) the Partnership is
purchasing or selling securities with other unaffiliated third parties,
including Third Party Funds or Third Party Investors, who are similarly
purchasing or selling securities, (b) the fees or other compensation
being charged to the Partnership are also being charged to the
unaffiliated third parties, including Third Party Funds or Third Party
Investors, and (c) the amount of securities being purchased or sold by
the Partnership does not exceed 50% of
[[Page 58913]]
the total amount of securities being purchased or sold by the
Partnership and the unaffiliated third parties, including Third Party
Funds and Third Party Investors. Raymond James entities, including the
General Partner, also may be compensated for services to entities in
which the Partnerships invest and to entities that are competitors of
these entities, and may otherwise engage in normal business activities.
12. The Partnerships may borrow from a General Partner or a Raymond
James entity. The interest rate on such loans will be no less favorable
to the Partnerships than the rate that could be obtained on an arm's
length basis. A Partnership will not borrow from any person if the
borrowing would cause any person not named in section 2(a)(13) of the
Act to own outstanding securities of the Partnership (other than short-
term paper). Any borrowing by a Partnership will be non-recourse to the
Limited Partners of the Partnership, except indebtedness incurred
specifically on behalf of a Limited Partner where such Limited Partner
has agreed to guarantee the loan or act as co-obligor on the loan.
13. A Partnership will not invest more than 15% of its assets in
securities issued by registered investment companies (with the
exception of temporary investments in money market funds). A
Partnership will not acquire any security issued by a registered
investment company if immediately after the acquisition; the
Partnership will own more than 3% of the outstanding voting stock of
the registered investment company.
Applicants' Legal Analysis
1. Section 6(b) of the Act provides, in part, that the Commission
will exempt employees' securities companies from the provisions of the
Act to the extent that the exemption is consistent with the protection
of investors. Section 6(b) provides that the Commission will consider,
in determining the provisions of the Act from which the company should
be exempt, the company's form of organization and capital structure,
the persons owning and controlling its securities, the price of the
company's securities and the amount of any sales load, how the
company's funds are invested, and the relationship between the company
and the issuers of the securities in which it invests. Section 2(a)(13)
defines an employees' securities company, in relevant part, as any
investment company all of whose securities (other than short-term
paper) are beneficially owned (a) by current or former employees, or
persons on retainer, of one or more affiliated employers, (b) by
immediate family members of such persons, or (c) by such employer or
employers together with any of the persons in (a) or (b).
2. Section 7 of the Act generally prohibits investment companies
that are not registered under section 8 of the Act from selling or
redeeming their securities. Section 6(e) of the Act provides that, in
connection with any order exempting an investment company from any
provision of section 7, certain provisions of the Act, as specified by
the Commission, will be applicable to the company and other persons
dealing with the company as though the company were registered under
the Act. Applicants request an order under sections 6(b) and 6(e) of
the Act exempting applicants and any Subsequent Partnerships from all
provisions of the Act, except section 9 and sections 36 through 53 of
the Act, and the rules and regulations under the Act. With respect to
sections 17 and 30 of the Act, and the rules and regulations
thereunder, and rule 38a-1 under the Act, the exemption is limited as
set forth in the application.
3. Section 17(a) generally prohibits any affiliated person of a
registered investment company, or any affiliated person of an
affiliated person, acting as principal, from knowingly selling or
purchasing any security or other property to or from the company.
Applicants request an exemption from section 17(a) to permit: (a) A
Raymond James entity or a Third Party Fund, acting as principal, to
engage in any transaction directly or indirectly with any Partnership
or any company controlled by the Partnership; (b) any Partnership to
invest in or engage in any transaction with any Raymond James entity,
acting as principal, (i) in which the Partnership, any company
controlled by the Partnership, or any Raymond James entity or Third
Party Fund has invested or will invest, or (ii) with which the
Partnership, any company controlled by the Partnership, or any Raymond
James entity or Third Party Fund is or will become affiliated; and (c)
any Third Party Investor, acting as principal, to engage in any
transaction directly or indirectly with a Partnership or any company
controlled by the Partnership.
4. Applicants state that an exemption from section 17(a) is
consistent with the protection of investors and is necessary to promote
the purpose of each Partnership. Applicants state that the Participants
in each Partnership will be fully informed of the possible extent of
the Partnership's dealings with Raymond James. Applicants also state
that, as professionals employed in investment banking and financial
planning, Participants in each Partnership will be able to understand
and evaluate the attendant risks. Applicants assert that the community
of interest among the Participants and Raymond James will provide the
best protection against any risk of abuse.
5. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
any affiliated person of a registered investment company, or any
affiliated person of such person, acting as principal, from
participating in any joint arrangement with the company unless
authorized by the Commission. Applicants request relief to permit
affiliated persons of each Partnership, or affiliated persons of any of
these persons, to participate in any joint arrangement in which the
Partnership or a company controlled by the Partnership is a
participant.
6. Applicants assert that compliance with section 17(d) would cause
the Partnerships to forgo investment opportunities simply because a
Participant or other affiliated person of the Partnerships (or any
affiliate of the affiliated person) made or is concurrently making a
similar investment. Applicants also state that because certain
attractive investment opportunities often require that each participant
make available funds in an amount substantially greater than that
available to one Partnership alone, there may be attractive
opportunities that a Partnership may be unable to take advantage of
except by co-investing with other persons, including affiliated
persons. Applicants assert that the flexibility to structure co-
investments and joint investments will not involve abuses of the type
section 17(d) and rule 17d-1 were designed to prevent.
7. Co-investments with a Third Party Fund, or by a Raymond James
entity pursuant to a contractual obligation to a Third Party Fund, will
not be subject to condition 3 below. Applicants note that it is common
for a Third Party Fund to require that Raymond James invest its own
capital in Third Party Fund investments, and that Raymond James
investments be subject to substantially the same terms as those
applicable to the Third Party Fund. Applicants believe it is important
that the interests of the Third Party Fund take priority over the
interests of the Partnerships, and that the Third Party Fund not be
burdened or otherwise affected by activities of the Partnerships. In
addition, applicants assert that the relationship of a Partnership to a
Third Party Fund is fundamentally different from a Partnership's
relationship to Raymond James. Applicants contend
[[Page 58914]]
that the focus of, and the rationale for, the protections contained in
the requested relief are to protect the Partnerships from any
overreaching by Raymond James in the employer/employee context, whereas
the same concerns are not present with respect to the Partnerships and
a Third Party Fund.
8. Section 17(e) of the Act and rule 17e-1 under the Act limit the
compensation an affiliated person may receive when acting as agent or
broker for a registered investment company. Applicants request an
exemption from section 17(e) to permit a Raymond James entity
(including the General Partner) that acts as an agent or broker to
receive placement fees, advisory fees, or other compensation from a
Partnership in connection with the purchase or sale by the Partnership
of securities, provided that the fees or other compensation can be
deemed ``usual and customary.'' Applicants state that for the purposes
of the application, fees or other compensation will be deemed ``usual
and customary'' only if (a) the Partnership is purchasing or selling
securities alongside other unaffiliated third parties, including Third
Party Funds or Third Party Investors, who are similarly purchasing or
selling securities, (b) the fees or other compensation being charged to
the Partnership are also being charged to the unaffiliated third
parties, including Third Party Funds and Third Party Investors, and (c)
the amount of securities being purchased or sold by the Partnership
does not exceed 50% of the total amount of securities being purchased
or sold by the Partnership and the unaffiliated third parties,
including Third Party Funds or Third Party Investors. Applicants assert
that, because Raymond James does not wish it to appear as if it is
favoring the Partnerships, compliance with section 17(e) would prevent
a Partnership from participating in transactions where the Partnership
is being charged lower fees than unaffiliated third parties. Applicants
assert that the fees or other compensation paid by a Partnership to a
Raymond James entity will be the same as those negotiated at arm's
length with unaffiliated third parties.
9. Rule 17e-1(b) under the Act requires that a majority of
directors who are not ``interested persons'' (as defined in section
2(a)(19) of the Act) take actions and make approvals regarding
commissions, fees, or other remuneration. Rule 17e-1(c) under the Act
requires each Partnership to comply with the fund governance standards
defined in rule 0-1(a)(7) under the Act. Applicants request an
exemption from rule 17e-1 to the extent necessary to permit each
Partnership to comply with the rule without having a majority of the
directors of the General Partner who are not interested persons take
actions and make determinations as set forth in paragraph (b) of the
rule, and without having to satisfy the standards set forth in
paragraph (c) of the rule. Applicants state that because all the
directors of the General Partner will be affiliated persons, without
the relief requested, a Partnership could not comply with rule 17e-1.
Applicants state that each Partnership will comply with rule 17e-1(b)
by having a majority of the directors of the Partnership take actions
and make approvals as are set forth in rule 17e-1. Applicants state
that each Partnership will comply with all other requirements of rule
17e-1.
10. Section 17(f) of the Act designates the entities that may act
as investment company custodians, and rule 17f-1 under the Act imposes
certain requirements when the custodian is a member of a national
securities exchange. Applicants request an exemption from section 17(f)
and rule 17f-1 to permit a Raymond James entity to act as custodian of
Partnership assets without a written contract, as would be required by
rule 17f-1(a). Applicants also request an exemption from the rule 17f-
1(b)(4) requirement that an independent accountant periodically verify
the assets held by the custodian. Applicants state that, because of the
community of interest between Raymond James and the Partnerships and
the existing requirement for an independent audit, compliance with
these requirements would be unnecessarily burdensome and expensive.
Applicants will comply with all other requirements of rule 17f-1.
11. Section 17(g) of the Act and rule 17g-1 under the Act generally
require the bonding of officers and employees of a registered
investment company who have access to its securities or funds. Rule
17g-1 requires that a majority of directors who are not interested
persons take certain actions and give certain approvals relating to
fidelity bonding. Applicants request exemptive relief to permit the
General Partner's directors, who may be deemed interested persons, to
take actions and make determinations set forth in the rule. Applicants
state that, because all directors of the General Partner will be
affiliated persons, a Partnership could not comply with rule 17g-1
without the requested relief. Specifically, each Partnership will
comply with rule 17g-1 by having a majority of the Partnership's
directors take actions and make determinations as are set forth in rule
17g-1. Applicants also state that each Partnership will comply with all
other requirements of rule 17g-1, except that the Partnerships request
an exemption from the requirements of paragraphs (g) and (h) or rule
17g-1 relating to the filing of copies of fidelity bonds and related
information with the Commission and relating to this provision of
notices to the board of directors, and an exemption from the
requirements of paragraph (j)(3) of rule 17g-1 that the Partnerships
comply with the fund governance standards defined in rule 0-1(a)(7).
12. Section 17(j) of the Act and paragraph (b) of rule 17j-1 under
the Act make it unlawful for certain enumerated persons to engage in
fraudulent or deceptive practices in connection with the purchase or
sale of a security held or to be acquired by a registered investment
company. Rule 17j-1 also requires that every registered investment
company adopt a written code of ethics and that every access person of
a registered investment company report personal securities
transactions. Applicants request an exemption from the provisions of
rule 17j-1, except for the anti-fraud provisions of paragraph (b),
because they are unnecessarily burdensome as applied to the
Partnerships.
13. Applicants request an exemption from the requirements in
sections 30(a), 30(b), and 30(e) of the Act, and the rules under those
sections, that registered investment companies prepare and file with
the Commission and mail to their shareholders certain periodic reports
and financial statements. Applicants contend that the forms prescribed
by the Commission for periodic reports have little relevance to a
Partnership and would entail administrative and legal costs that
outweigh any benefit to the Participants. Applicants request exemptive
relief to the extent necessary to permit each Partnership to report
annually to its Participants. Applicants also request an exemption from
section 30(h) of the Act to the extent necessary to exempt the General
Partner of each Partnership, directors and officers of the General
Partnership and any other persons who may be deemed to be members of an
advisory board of a Partnership from filing Forms 3, 4, and 5 under
section 16(a) of the 1934 Act with respect to their ownership of
Interests in the Partnership. Applicants assert that, because there
will be no trading market and the transfers of Interests will be
severely restricted, these filings are unnecessary for the protection
of investors and burdensome to those required to make them.
14. Rule 38a-1 requires investment companies to adopt, implement
and
[[Page 58915]]
periodically review written policies reasonable designed to prevent
violation of the federal securities law and to appoint a chief
compliance officer. Each Partnership will comply will rule 38a-1(a),
(c) and (d), except that (a) because the Partnership does not have a
board of directors, the board of directors of the General Partner will
fulfill the responsibilities assigned to the Partnership's board of
directors under the rule, (b) because the board of directors of the
General Partner does not have any disinterested members, approval by a
majority of the disinterested board members required by rule 38a-1 will
not be obtained, and (c) because the board of directors of the General
Partner does not have any independent members, the Partnerships will
comply with the requirement in rule 38a-1(a)(4)(iv) that the chief
compliance officer meet with the independent board members by having
the chief compliance officer meet with the board of directors of the
General Partner as constituted.
Applicants' Conditions
Applicants agree that any order granting the requested relief will
be subject to the following conditions:
1. Each proposed transaction otherwise prohibited by section 17(a)
or section 17(d) and rule 17d to which a Partnership is a party (the
``Section 17 Transactions'') will be effected only if the General
Partner determines that:
(a) The terms of the Section 17 Transaction, including the
consideration to be paid or received, are fair and reasonable to the
Partners of the participating Partnership and do not involve
overreaching of such Partnership or its Partners on the part of any
person concerned; and
(b) The Section 17 Transaction is consistent with the interests of
the Partners of the participating Partnership, such Partnership's
organizational documents and such Partnership's reports to its
Partners.
In addition, the General Partner will record and will preserve a
description of all Section 17 Transactions, the General Partner's
findings and the information or materials upon which the General
Partner's findings are based and the basis for the findings. All such
records will be maintained for the life of the Partnership and at least
six years thereafter, and will be subject to examination by the
Commission and its staff. Each Partnership will preserve the accounts,
books and other documents required to be maintained in an easily
accessible place for the first two years.
2. In connection with the Section 17 Transactions, the General
Partner will adopt, and periodically review and update, procedures
designed to ensure that reasonable inquiry is made, prior to the
consummation of any Section 17 Transaction, with respect to the
possible involvement in the transaction of any affiliated person or
promoter of or principal underwriter for such Partnership, or any
affiliated person of such a person, promoter or principal underwriter.
3. The General Partner will not make on behalf of a Partnership any
investment in which a `` Co-Investor'' with respect to any Partnership
(as defined below) has acquired or proposes to acquire the same class
of securities of the same issuer, where the investment involves a joint
enterprise or other joint arrangement within the meaning of rule 17d-1
in which such Partnership and the Co-Investor are participants, unless
any such Co-Investor, prior to disposing of all or part of its
investment, (a) gives such General Partner sufficient, but not less
than one day's notice of its intent to dispose of its investment; and
(b) refrains from disposing of its investment unless the participating
Partnership holding such investment has the opportunity to dispose of
its investment prior to or concurrently with, on the same terms as, and
on a pro rata basis with the Co-Investor. The term ``Co-Investor'' with
respect to any Partnership means any person who is: (a) An ``affiliated
person'' (as defined in section 2(a)(3) of the Act) of such Partnership
(other than a Third Party Fund); (b) a Raymond James entity; (c) an
officer or director of a Raymond James entity; or (d) an entity (other
than a Third Party Fund) in which the General Partner acts as a general
partner or has a similar capacity to control the sale or other
disposition of the entity's securities.
The restrictions contained in this condition, however, shall not be
deemed to limit or prevent the disposition of an investment by a Co-
Investor: (a) To its direct or indirect wholly-owned subsidiary, to any
company (a ``Parent'') of which such Co-Investor is a direct or
indirect wholly-owned subsidiary, or to a direct or indirect wholly-
owned subsidiary of its Parent; (b) to immediate family members of such
Co-Investor, including step and adoptive relationships, or to a trust
or other investment vehicle established for any such immediate family
member; (c) when the investment is comprised of securities that are
listed on any exchange registered as a national securities exchange
under section 6 of the 1934 Act; (d) when the investment is comprised
of securities that are national market system securities pursuant to
section 11A(a)(2) of the 1934 Act and rule 11Aa2-1 thereunder; (e) when
the investment is comprised of securities that are listed or traded on
any foreign securities exchange or board of trade that satisfies
regulatory requirements under the law of the jurisdiction in which such
foreign securities exchange or board of trade is organized similar to
those that apply to a national securities exchange or a national market
system for securities; or (f) when the investment is comprised of
securities that are government securities as defined in section
2(a)(16) of the Act.
4. Each Partnership and its General Partner will maintain and
preserve, for the life of such Partnership and at least six years
thereafter, such accounts, books, and other documents as constitute the
record forming the basis for the audited financial statements that are
to be provided to the Participants in such Partnership, and each annual
report of such Partnership required to be sent to such Participants,
and agree that all such records will be subject to examination by the
Commission and its staff. Each Partnership will preserve the accounts,
books and other documents required to be maintained in an easily
accessible place for the first two years.
5. The General Partner of each Partnership will send to each
Participant in that Partnership, at any time during the fiscal year
then ended, Partnership financial statements audited by such
Partnership's independent accountants, except in the case of a
Partnership formed to make a single Portfolio Investment. In such
cases, financial statements will be unaudited, but each Participant
will receive financial statements of the single Portfolio Investment
audited by such entity's independent accountants. At the end of each
fiscal year, the General Partner will make a valuation or have a
valuation made of all of the assets of the Partnership as of such
fiscal year end in a manner consistent with customary practice with
respect to the valuation of assets of the kind held by the Partnership.
In addition, within 120 days after the end of each fiscal year of each
Partnership or as soon as practicable thereafter, the General Partner
will send a report to each person who was a Participant at any time
during the fiscal year then ended, setting forth such tax information
as shall be necessary for the preparation by the Participant of his,
her or its U.S. federal and state income tax returns and a report of
the investment activities of the Partnership during that fiscal year.
6. If a Partnership makes purchases or sales from or to an entity
affiliated with the Partnership by reason of an officer,
[[Page 58916]]
director or employee of Raymond James (a) serving as an officer,
director, general partner or investment adviser of the entity, or (b)
having a 5% or more investment in the entity, such individual will not
participate in the Partnership's determination of whether or not to
effect the purchase or sale.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-20444 Filed 10-16-07; 8:45 am]
BILLING CODE 8011-01-P
