RIEF RMP LLC and Renaissance Technologies LLC; Notice of Application, 61232-61237 [2010-24787]
Download as PDF
<![CDATA[
jlentini on DSKJ8SOYB1PROD with NOTICES
61232
Federal Register / Vol. 75, No. 191 / Monday, October 4, 2010 / Notices
2. The prospectus for each Fund will
disclose the existence, substance, and
effect of any order granted pursuant to
the application. Each Fund will hold
itself out to the public as employing the
management structure described in the
application. The prospectus will
prominently disclose that the Adviser
has ultimate responsibility (subject to
oversight by the Board) to oversee the
Subadvisers and recommend their
hiring, termination, and replacement.
3. Within 90 days of the hiring of a
new Subadviser, the affected Fund’s
shareholders will be furnished all
information about the new Subadviser
that would be included in a proxy
statement, except as modified to permit
Aggregate Fee Disclosure. This
information will include Aggregate Fee
Disclosure and any change in such
disclosure caused by the addition of the
new Subadviser. To meet this
obligation, the Fund will provide
shareholders within 90 days of the
hiring of a new Subadviser with an
information statement meeting the
requirements of Regulation 14C,
Schedule 14C, and Item 22 of Schedule
14A under the 1934 Act, except as
modified by the order to permit
Aggregate Fee Disclosure.
4. The Adviser will not enter into a
Subadvisory Agreement with an
Affiliated Subadviser unless the
agreement provides that the Affiliated
Subadviser’s compensation will be
limited to reimbursement of its
reasonable costs of providing
subadvisory services to the particular
Fund, without any element of profit.
5. When a Subadviser change is
proposed for a Fund with an Affiliated
Subadviser, the Board will make a
separate finding, reflected in the
applicable Board minutes, that such
change is in the best interests of the
Fund and its shareholders and does not
involve a conflict of interest from which
the Adviser or the Affiliated Subadviser
derives an inappropriate advantage.
6. The Adviser will provide general
management services to each Fund,
including overall supervisory
responsibility for the general
management and investment of the
Fund’s assets and, subject to review and
approval of the Board, will (a) Set each
Fund’s overall investment strategies; (b)
evaluate, select and recommend
Subadvisers to manage all or a part of
a Fund’s assets; (c) when appropriate,
allocate and reallocate a Fund’s assets
among multiple Subadvisers; (d)
monitor and evaluate the performance
of Subadvisers; and (e) implement
procedures reasonably designed to
ensure that the Subadvisers comply
VerDate Mar<15>2010
17:23 Oct 01, 2010
Jkt 223001
with each Fund’s investment objective,
policies and restrictions.
7. No director, trustee or officer of any
Fund, or director or officer of the
Adviser, will own directly or indirectly
(other than through a pooled investment
vehicle that is not controlled by such
person) any interest in a Subadviser,
except for (a) ownership of interests in
the Adviser or any entity that controls,
is controlled by, or is under common
control with the Adviser; or (b)
ownership of less than 1% of the
outstanding securities of any class of
equity or debt of a publicly traded
company that is either a Subadviser or
an entity that controls, is controlled by
or is under common control with a
Subadviser.
8. Each Fund will disclose in its
registration statement the Aggregate Fee
Disclosure.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–24824 Filed 10–1–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
29446; 813–358]
RIEF RMP LLC and Renaissance
Technologies LLC; Notice of
Application
September 28, 2010.
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:
Summary of Application: Applicants
request an order to exempt certain
limited liability companies and other
investment vehicles formed for the
benefit of eligible employees of
Renaissance Technologies LLC (‘‘RTC’’)
and its affiliates from certain provisions
of the Act. Each limited partnership or
other investment vehicle will be an
‘‘employees’ securities company’’ within
the meaning of section 2(a)(13) of the
Act.
PO 00000
Frm 00114
Fmt 4703
Sfmt 4703
Applicants: RIEF RMP LLC (‘‘RMP’’)
and RTC.
DATES: The application was filed on
August 2, 2005 and amended on May 3,
2007, May 14, 2008, and June 4, 2010.
Applicants have agreed to file an
amendment during the notice period,
the substance of which is reflected in
this notice.
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 October 25, 2010, 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, 800 Third Avenue,
New York, New York 10022.
FOR FURTHER INFORMATION CONTACT:
Deepak T Pai, Senior Counsel, at (202)
551–6876, or Mary Kay Frech, 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 via the Commission’s
Web site by searching for the file
number, or an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Applicants’ Representations:
1. RTC is registered as an investment
adviser under the Investment Advisers
Act of 1940 (the ‘‘Advisers Act’’) and as
a commodity pool operator and
commodity trading adviser with the
Commodity Futures Trading
Commission under the Commodity
Exchange Act, and is a member of the
National Futures Association. RTC
provides investment management
services primarily to institutional
investors as well as its own employees
and related parties and is the general
partner, managing member or
investment adviser to several private
funds. RTC and its ‘‘affiliates,’’ as
defined in rule 12b–2 under the
Securities Exchange Act of 1934 (the
E:\FR\FM\04OCN1.SGM
04OCN1
jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 191 / Monday, October 4, 2010 / Notices
‘‘1934 Act’’), are referred to collectively
as ‘‘RTC Group.’’
2. RTC has organized RMP as a
Delaware limited liability company, and
RTC may in the future organize
additional private investment funds
(‘‘Future Pooled Investment Vehicles,’’
and together with RMP, ‘‘Pooled
Investment Vehicles’’) identical in all
respects to RMP (other than investment
objectives and strategies and form of
organization) for the benefit of the same
categories of eligible investors as those
investing in RMP. RMP was formed to
benefit Eligible Employees (as defined
below) and other eligible investors as
part of a program by RTC to (a) create
capital building opportunities that are
competitive with those at other
investment management firms, and (b)
facilitate the recruitment and retention
by RTC of high caliber personnel and
key administrative employees. Investing
in the Pooled Investment Vehicles will
be voluntary. RMP will operate as a
non-diversified, closed-end
management investment company.
Membership interests (‘‘Interests’’) in
RMP will be offered in two series—A
and B (‘‘Series’’). Each Series will be
identical to the other except for the fees
each will pay to RTC for the services
rendered to RMP by RTC. RMP and each
Future Pooled Investment Vehicle will
be an ‘‘employees’ securities company’’
as that term is defined in section
2(a)(13) of the Act.
3. RTC serves as the managing
member of RMP and will serve as the
general partner, managing member or
investment adviser (‘‘Managing
Member’’) of the Future Pooled
Investment Vehicles. RTC will control
each Pooled Investment Vehicle within
the meaning of section 2(a)(9) of the Act,
and will have the authority to make all
decisions regarding the acquisition,
management and disposition of the
portfolio investments for Pooled
Investment Vehicles. RTC will be paid
an advisory fee for its services, which
may be determined as a percentage of
assets under management. In addition,
RTC may be entitled to a performancebased fee or allocation based on net
capital appreciation in addition to the
fixed fee.1
4. RTC, as Managing Member, and any
other person acting for or on behalf of
the Pooled Investment Vehicles shall act
in the best interest of the Pooled
Investment Vehicles and their
Participants (as defined below).
Whenever RTC or any other person
acting for or on behalf of the Pooled
1 Any performance fee or allocation will be
charged only if permitted by rule 205–3 under the
Advisers Act.
VerDate Mar<15>2010
17:23 Oct 01, 2010
Jkt 223001
Investment Vehicles is required or
permitted to make a decision, take or
approve an action, or omit to do any of
the foregoing in such person’s
discretion, then that person shall
exercise such discretion in accordance
with reasonableness and good faith and
any fiduciary duties owed to the Pooled
Investment Vehicles and the
Participants. The organizational
documents for, and any other
contractual arrangements regarding, a
Pooled Investment Vehicle will not
contain any provision which protects or
purports to protect RTC or its delegates
against any liability to the Pooled
Investment Vehicles or the Participants
to which such person would otherwise
be subject by reason of willful
misfeasance, bad faith, or gross
negligence in the performance of such
person’s duties, or by reason of such
person’s reckless disregard of such
person’s obligations and duties under
such contract or organizational
documents.
5. Interests in the Pooled Investment
Vehicles will be offered to Eligible
Investors (as defined below) without
registration in reliance on section 4(2) of
the Securities Act of 1933 (the ‘‘1933
Act’’) or Regulation D under the 1933
Act. RTC must reasonably believe,
before offering an Interest to an Eligible
Investor, that such person has the
knowledge, sophistication and
experience in business and financial
matters to be capable of evaluating the
merits and risks of the investment, is
able to bear the economic risk of such
investment, and is able to afford a
complete loss of such investment.
6. ‘‘Eligible Investors’’ who may invest
in the Pooled Investment Vehicles are:
(a) Individuals who are current or
former employees, officers or directors
of the RTC Group (‘‘Eligible
Employees’’); (b) a spouse, child, spouse
of a child, brother, sister, parent or
grandchild of an individual who is an
Eligible Employee (‘‘Eligible Family
Members’’); (c) persons or entities whom
the RTC Group has engaged on retainer
to provide services and professional
expertise on an ongoing basis as regular
consultants in business or legal advisers
to the RTC Group and who share a
community of interest with RTC and
RTC employees (‘‘Consultants’’); and (d)
either (i) trusts or other investment
vehicles of which the trustees or
grantors are Eligible Employees or
Eligible Employees together with their
Eligible Family Members, (ii) trusts or
other investment vehicles established
solely for the benefit of Eligible
Employees, Consultants or Eligible
Family Members, or (iii) partnerships,
corporations or other entities all of the
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
61233
voting power of which is controlled by
Eligible Employees (‘‘Qualified
Investment Entities’’) (together with
Eligible Employees, Eligible Family
Members and Consultants, ‘‘Eligible
Investors’’).
7. All Eligible Investors investing in
RMP must be ‘‘accredited investors’’ as
defined in rule 501(a)(5) or 501(a)(6) of
Regulation D, except that up to 35
Eligible Employees who are nonaccredited investors may invest in RMP
provided they fall into one of the
following categories: (a) Eligible
Employees who (i) Have a graduate
degree in business, law or accounting,
(ii) have a minimum of five years of
consulting, investment banking or
similar business experience, and (iii)
have had reportable income from all
sources of at least $100,000 in each of
the two most recent years and have a
reasonable expectation of income from
all sources of at least $140,000 in the
years in which the Eligible Employee
invests in a Pooled Investment Vehicle;
or (b) Eligible Employees who are
‘‘knowledgeable employees,’’ as defined
in rule 3c–5 under the Act, of the
Pooled Investment Vehicle (with the
Pooled Investment Vehicle treated as
though it were a ‘‘covered company’’ for
purposes of the rule). In addition, an
Eligible Employee in category (a) above
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 the Pooled Investment
Vehicle and in all other Pooled
Investment Vehicles in which that
Eligible Employee has previously
invested.
8. A Qualified Investment Entity must
be either (a) an accredited investor as
defined in rule 501(a) of Regulation D,
or (b) an entity for which an Eligible
Employee is the settlor and principal
investment decisionmaker and is
counted toward the limit on the 35 nonaccredited investors that may invest in
a Pooled Investment Vehicle.
9. The specific investment objectives
and strategies for a particular Pooled
Investment Vehicle will be set forth in
the private placement memorandum
relating to the Interests in the Pooled
Investment Vehicles being offered,
which will be delivered to each offeree
at or before the sale of an Interest. Each
Pooled Investment Vehicle will furnish
to those Eligible Investors who are
accepted as investors (‘‘Participants’’)
annual financial statements audited by
its registered public accounting firm and
unaudited monthly reports of the results
E:\FR\FM\04OCN1.SGM
04OCN1
jlentini on DSKJ8SOYB1PROD with NOTICES
61234
Federal Register / Vol. 75, No. 191 / Monday, October 4, 2010 / Notices
of its investments.2 In addition, RTC
will cause a report to be sent to each
Participant in a Pooled Investment
Vehicle, as soon as practicable after the
end of each fiscal year, setting forth the
information with respect to his or her
share of income, gains, losses, credits
and other items for federal and state
income tax purposes.
10. Interests in the Pooled Investment
Vehicles will not be transferable except
with the express consent of RTC and
then only to Eligible Investors. No sales
load or fees of any kind will be charged
in connection with the sale of Interests.
Each private placement memorandum of
the Pooled Investment Vehicles will
describe the terms by which a
Participant may transfer an Interest or
withdraw from the Pooled Investment
Vehicle. In addition, RTC has the right
to cause any Participant to withdraw
without cause. Upon withdrawal, the
Pooled Investment Vehicles will pay to
the Participant the net asset value of the
Interest determined at the time of
withdrawal, as determined in good faith
by RTC.
11. RTC intends to structure an
investment program in which the
Pooled Investment Vehicles will coinvest in portfolio companies with RTC
or other pooled investment funds
organized primarily for the benefit of
investors who are not affiliated with
RTC over which RTC exercises
investment discretion (‘‘Third Party
Funds’’).3 Side-by-side investments by a
Third Party Fund, or by an RTC entity
in a transaction in which the RTC
investment was made pursuant to a
contractual obligation to a Third Party
Fund, will not be subject to the
restrictions contained in condition 3.
All other side-by-side investments will
be subject to the restrictions contained
in condition 3.
12. RMP and other Pooled Investment
Vehicles may borrow money from
others. Any indebtedness of the Pooled
Investment Vehicles will be the debt of
such Pooled Investment Vehicles and
without recourse to the Participants.
The Pooled Investment Vehicles will
not borrow from any person if the
borrowing would cause any person
other than an Eligible Investor to own
securities of the Pooled Investment
Vehicles (other than short term paper).
13. The Pooled Investment Vehicles
will not purchase or otherwise acquire
any security issued by any registered
2 ‘‘Audit’’ shall have the meaning defined in rule
1–02(d) of Regulation S–X.
3 The investment objectives and program of one
such Third Party Fund, Renaissance Institutional
Equities Fund LLC (‘‘RIEF’’), will be substantially
similar to RMP’s investment objectives and
program.
VerDate Mar<15>2010
17:23 Oct 01, 2010
Jkt 223001
investment company if the Pooled
Investment Vehicles immediately after
such purchase or acquisition will own
in the aggregate more than 3% of the
total outstanding voting stock of such
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 RMP and each Future
Pooled Investment Vehicle 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) of the Act 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
PO 00000
Frm 00116
Fmt 4703
Sfmt 4703
section 17(a) to permit: (a) RTC or a
Third Party Fund (or any affiliated
person of RTC or a Third Party Fund),
acting as principal, to engage in any
transaction directly or indirectly with a
Pooled Investment Vehicle or any
company controlled by a Pooled
Investment Vehicle; and (b) the Pooled
Investment Vehicles to invest in or
engage in any transaction with any RTC
entity (or any affiliated person of such
entity), acting as principal, (i) in which
the Pooled Investment Vehicles, any
company controlled by a Pooled
Investment Vehicle, or any RTC entity
or Third Party Fund has invested or will
invest, or (ii) with which the Pooled
Investment Vehicles, any company
controlled by a Pooled Investment
Vehicle or any RTC entity or Third Party
Fund is or will become affiliated.
4. Applicants submit that an
exemption from section 17(a) is
consistent with the purposes of the
Pooled Investment Vehicles and the
protection of investors. Applicants state
that Participants in the Pooled
Investment Vehicles will be fully
informed of the possible extent of the
Pooled Investment Vehicles’ coinvesting with RTC and Third Party
Funds. Applicants also state that, as
professionals employed in the
investment management business, or in
administrative, financial, accounting,
legal or operational activities related
thereto, or otherwise familiar with RTC,
Eligible Investors will be able to
understand and evaluate the attendant
risks. Applicants assert that the
community of interest among the
Eligible Investors investing in the
Pooled Investment Vehicles, on the one
hand, and RTC, on the other hand, will
protect Participants 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 registered
investment company unless authorized
by the Commission. Applicants request
an order pursuant to section 17(d) and
rule 17d–1 to the extent necessary to
permit affiliated persons of RMP and the
Future Pooled Investment Vehicles
(including, without limitation, RTC,
affiliated persons of RTC and a Third
Party Fund), or affiliated persons of any
of these persons to participate in, or
effect any transaction in connection
with, any joint enterprise or other joint
arrangement or profit-sharing plan in
which any Pooled Investment Vehicle or
a company controlled by any Pooled
Investment Vehicle is a participant.
E:\FR\FM\04OCN1.SGM
04OCN1
jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 191 / Monday, October 4, 2010 / Notices
6. Applicants assert that compliance
with section 17(d) would prevent RMP
and the Future Pooled Investment
Vehicles from achieving their principal
purpose, which is to provide Eligible
Employees a vehicle through which
they may invest in the same securities
as RIEF or another Third Party Fund.
Applicants believe that if RMP’s or any
Future Pooled Investment Vehicle’s coinvestments with RTC and its affiliated
persons and affiliated persons of its
affiliated persons are prohibited, the
appeal of RMP and Future Pooled
Investment Vehicles for the Eligible
Investors would be significantly
diminished. Eligible Investors have
indicated a desire to participate in such
co-investment opportunities because
they believe that: (a) RTC can analyze
investment opportunities to an extent
that individual employees would have
neither the time nor resources to
duplicate; (b) investments made by
Third Party Funds managed by RTC
may not be generally available to or
available on the same terms and
conditions to investors even of the
financial status of the Eligible Investors;
and (c) Eligible Investors will be able to
pool their investment resources, thus
achieving greater diversification of their
individual investment portfolios.
Applicants further believe 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. Applicants believe that the interests
of the Eligible Employees participating
in the Pooled Investment Vehicles will
be adequately protected even in
situations where condition 3 does not
apply. In structuring a Third Party
Fund, it is common for the unaffiliated
investors of such fund to require that
RTC invest its own capital in fund
investments, either through the fund or
on a side-by-side basis, and that RTC
investments be subject to substantially
the same terms as those applicable to
the fund’s investments. Applicants
believe it is important that the interests
of the Third Party Fund take priority
over the interests of the Pooled
Investment Vehicles, and that the
activities of the Third Party Fund not be
burdened or otherwise affected by
activities of the Pooled Investment
Vehicles. If condition 3 were to apply to
RTC’s investment in these situations,
the effect of such a requirement would
be to indirectly burden the Third Party
Fund with the requirements of
condition 3. In addition, applicants state
that the relationship of RMP to RIEF or
another Pooled Investment Vehicle to
another Third Party Fund is
VerDate Mar<15>2010
17:23 Oct 01, 2010
Jkt 223001
fundamentally different from RMP’s and
the other Pooled Investment Vehicles’
relationship to RTC. The focus of, and
the rationale for, the protections
contained in the requested relief are to
protect the Pooled Investment Vehicles
from any overreaching by RTC in the
employer/employee context, whereas
the same concerns are not present with
respect to RMP and the other Pooled
`
Investment Vehicles vis-a-vis the
investors in RIEF or other Third Party
Funds.
8. 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 the following exceptions
from the requirements of rule 17f–1: (a)
In lieu of compliance with rule 17f–
1(b)(1), RMP and each Future Pooled
Investment Vehicle will enter into a
written customer and prime broker
agreement with one or more brokerdealers each of whom is a member of
the New York Stock Exchange LLC in
substantially similar form to the form
used by the subject prime broker(s); 4 (b)
in lieu of compliance with rule 17f–
1(b)(4), the Pooled Investment Vehicles’
registered public accountant shall semiannually reconcile the prime broker’s
statement of each Pooled Investment
Vehicle’s account with each Pooled
Investment Vehicle’s records of its
holdings of cash and securities and
issue to each Pooled Investment Vehicle
a report on such reconciliation; (c) the
Pooled Investment Vehicles will not
comply with rule 17f–1(c), which
requires transmitting to the Commission
a copy of any contract executed
pursuant to rule 17f–1; and (d) RTC as
the Managing Member will approve the
contracts required to be ratified by the
board of directors in rule 17f–1(d).
Applicants will comply with all other
requirements of rule 17f–1.
9. 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
4 Almost all of the securities in which RMP and
the Future Pooled Investment Vehicles will invest
will be eligible for deposit in a securities depository
registered as a clearing agency under the 1934 Act.
There will be no physical segregation, and
segregation will be accomplished by entries on the
books and records of the prime broker and periodic
account statements issued by the prime broker to
RMP and each Future Pooled Investment Vehicle
will reflect such recordation.
PO 00000
Frm 00117
Fmt 4703
Sfmt 4703
61235
approvals relating to fidelity bonding.
Applicants request instead that such
actions and approvals be taken by RTC,
regardless of whether it is deemed to be
an interested person of such Pooled
Investment Vehicles. Applicants state
that because RTC will be considered an
interested person of each Pooled
Investment Vehicle, the Pooled
Investment Vehicles could not comply
with rule 17g–1 without the requested
relief. Applicants also request an
exemption from the requirements of
paragraphs (g) and (h) of rule 17g–1
relating to the filing of copies of fidelity
bonds and related information with the
Commission and the provision of
notices to the board of directors, and
from the requirements of rule 17g–1(j)(3)
that the board of directors of an
investment company satisfy the fund
governance standards defined in rule 0–
1(a)(7). The Pooled Investment Vehicles
will comply with all other requirements
of rule 17g–1.
10. 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 Pooled Investment
Vehicles and would serve little purpose
in light of the community of interest
among the Participants by virtue of their
common association with RTC.
11. 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 the Pooled Investment
Vehicles and would entail
administrative and legal costs that
outweigh any benefit to the Participants
in the Pooled Investment Vehicles.
Applicants request exemptive relief to
the extent necessary to permit the
Pooled Investment Vehicles to report
annually to their Participants.
Applicants also request an exemption
from section 30(h) of the Act to the
E:\FR\FM\04OCN1.SGM
04OCN1
jlentini on DSKJ8SOYB1PROD with NOTICES
61236
Federal Register / Vol. 75, No. 191 / Monday, October 4, 2010 / Notices
extent necessary to exempt RTC,
directors and officers of RTC and any
other persons who may be deemed
members of an advisory board of the
Pooled Investment Vehicles from filing
Forms 3, 4 and 5 under section 16 of the
1934 Act with respect to their
ownership of Interests in the Pooled
Investment Vehicles. Applicants assert
that, because there would be no trading
market and the transfers of Interests are
severely restricted, these filings are
unnecessary for the protection of
investors and burdensome to those
required to make them.
12. Rule 38a–1 requires investment
companies to adopt, implement and
periodically review written policies
reasonably designed to prevent violation
of the federal securities laws and to
appoint a chief compliance officer. RMP
and Future Pooled Investment Vehicles
will comply will rule 38a–1(a), (c) and
(d), except that the board of directors of
RTC, the Managing Member, will fulfill
the responsibilities assigned to a fund’s
board of directors under the rule and,
since all the members of RTC’s board of
directors would be considered
interested persons, approval by a
majority of the disinterested directors
required by rule 38a–1 will not be
obtained. In addition, because the board
of directors of RTC does not have any
disinterested directors, RMP and the
Future Pooled Investment Vehicles will
comply with the requirement in rule
38a–1(a)(4)(iv) that the chief compliance
officer meet with the disinterested
directors by having the chief
compliance officer meet with the board
of directors of RTC 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) of the Act and rule 17d–
1 thereunder to which RMP or a Future
Pooled Investment Vehicle is a party
(the ‘‘Section 17 Transactions’’) will be
effected only if RTC determines that:
(a) The terms of the Section 17
Transaction, including the
consideration to be paid or received, are
fair and reasonable to the Participants in
the Pooled Investment Vehicle and do
not involve overreaching of the Pooled
Investment Vehicle or its Participants
on the part of any person concerned;
and
(b) The Section 17 Transaction is
consistent with the interests of the
Participants, the organizational
documents of the Pooled Investment
Vehicle, and the Pooled Investment
Vehicle’s reports to its Participants.
VerDate Mar<15>2010
17:23 Oct 01, 2010
Jkt 223001
In addition, RTC will record and
preserve a description of the Section 17
Transactions, the findings of RTC, the
information or materials upon which
the findings of RTC are based, and the
basis for those findings. All such
records will be maintained for the life
of the Pooled Investment Vehicles and
at least six years thereafter, and will be
subject to examination by the
Commission and its staff. The Pooled
Investment Vehicles 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, RTC 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 the Pooled
Investment Vehicles, or any affiliated
person of any such person, promoter or
principal underwriter.
3. RTC will not invest the funds of a
Pooled Investment Vehicle in any
investment in which a ‘‘Co-Investor’’ (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 a Pooled Investment
Vehicle and the Co-Investor are
participants, unless any such CoInvestor, prior to disposing of all or part
of its investment: (a) Gives RTC
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 any
Pooled Investment Vehicle has the
opportunity to dispose of its investment
prior to or concurrently with, and on the
same terms as, and pro rata with the CoInvestor. The term ‘‘Co-Investor’’ with
respect to RMP or a Future Pooled
Investment Vehicle means any person
who is: (a) An affiliated person (as
defined in section 2(a)(3) of the Act) of
the Pooled Investment Vehicle (other
than a Third Party Fund); (b) RTC; (c)
an officer or director of RTC; or (d) an
entity (other than a Third Party Fund)
in which RTC acts as a general partner,
managing member, trustee or has a
similar capacity to control the sale or
other disposition of the entity’s
securities.
The restrictions contained in this
condition, however, will 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’’)
PO 00000
Frm 00118
Fmt 4703
Sfmt 4703
of which the 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 the Co-Investor or to
a trust or other investment vehicle
established for any Co-Investor or any
such 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 600(a) of Regulation NMS
thereunder; (e) when the securities are
government securities as defined in
section 2(a)(16) of the Act; and (f) when
the investment is comprised of
securities that are listed on 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.
4. The Pooled Investment Vehicles
and RTC will maintain and preserve, for
the life of each Pooled Investment
Vehicle 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 the
Pooled Investment Vehicles, and each
annual report of each Pooled Investment
Vehicle required to be sent to such
Participants, and agree that all such
records will be subject to examination
by the Commission and its staff.5
5. Each Pooled Investment Vehicle
will send to each Participant in such
Pooled Investment Vehicle who had an
interest in the Pooled Investment
Vehicle at any time during the fiscal
year then ended financial statements of
the Pooled Investment Vehicle audited
by the Pooled Investment Vehicle’s
independent public accountants. At the
end of each fiscal year, RTC will make
a valuation or have a valuation made of
all of the assets of the Pooled
Investment Vehicle 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 Pooled Investment Vehicle. In
addition, within 120 days after the end
of each Pooled Investment Vehicle’s
5 RMP and the Pooled Investment Vehicles will
preserve the accounts, books and other documents
required to be maintained in an easily accessible
place for the first two years.
E:\FR\FM\04OCN1.SGM
04OCN1
Federal Register / Vol. 75, No. 191 / Monday, October 4, 2010 / Notices
fiscal year or as soon as practicable
thereafter, RTC will send a report to
each person who was a Participant in a
Pooled Investment Vehicle 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 that Participant’s
federal and state income tax returns and
a report of the investment activities of
the Pooled Investment Vehicle during
that fiscal year.
6. If any Pooled Investment Vehicle
makes purchases or sales from or to an
entity affiliated with such Pooled
Investment Vehicle by reason of an
officer, director or employee of RTC (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
Pooled Investment Vehicle’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. 2010–24787 Filed 10–1–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
jlentini on DSKJ8SOYB1PROD with NOTICES
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Monday, October 4, 2010 at 10 a.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(10) and 17 CFR
200.402(a)(10), permit consideration of
the scheduled matter at the Closed
Meeting.
Commissioner Paredes, as duty
officer, voted to consider the item listed
for the Closed Meeting in closed
session, and determined that no earlier
notice thereof was possible.
The subject matter of the Closed
Meeting scheduled for Monday, October
4, 2010 will be: A litigation matter.
VerDate Mar<15>2010
17:23 Oct 01, 2010
Jkt 223001
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact: The Office of the Secretary at
(202) 551–5400.
61237
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62997; File No. SR–CBOE–
2010–088]
Dated: September 30, 2010.
Elizabeth M. Murphy
Secretary.
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to Dates for Pilot
Programs
[FR Doc. 2010–24982 Filed 9–30–10; 4:15 pm]
September 28, 2010.
BILLING CODE 8010–01–P
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 21, 2010, the Chicago Board
Options Exchange, Incorporated
(‘‘Exchange’’ or ‘‘CBOE’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as one
constituting a stated policy, practice, or
interpretation with respect to the
meaning, administration, or
enforcement of an existing rule under
Section 19(b)(3)(A)(i) of the Act, and
Rule 19b–4(f)(1) thereunder, 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.
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Wednesday, October 6, 2010 at 1:00
p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matters at the Closed
Meeting.
Commissioner Paredes, as duty
officer, voted to consider the items
listed for the Closed Meeting in a closed
session.
The subject matter of the Closed
Meeting scheduled for Wednesday,
October 6, 2010 will be:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings; and other
matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Dated: September 29, 2010.
Elizabeth M. Murphy,
Secretary.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to make
technical amendments to its rules to
insert the specific dates for two pilot
programs. The text of the proposed rule
change is available on the Exchange’s
Web site (https://www.cboe.org/Legal), at
the Exchange’s Office of the Secretary,
and at the Commission.
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
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
[FR Doc. 2010–24885 Filed 9–30–10; 11:15 am]
1 15
BILLING CODE 8010–01–P
2 17
PO 00000
Frm 00119
Fmt 4703
Sfmt 4703
E:\FR\FM\04OCN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
04OCN1
]]>Agencies
[Federal Register Volume 75, Number 191 (Monday, October 4, 2010)]
[Notices]
[Pages 61232-61237]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24787]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 29446; 813-358]
RIEF RMP LLC and Renaissance Technologies LLC; Notice of
Application
September 28, 2010.
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 liability companies and other investment vehicles
formed for the benefit of eligible employees of Renaissance
Technologies LLC (``RTC'') and its affiliates from certain provisions
of the Act. Each limited partnership or other investment vehicle will
be an ``employees' securities company'' within the meaning of section
2(a)(13) of the Act.
Applicants: RIEF RMP LLC (``RMP'') and RTC.
DATES: The application was filed on August 2, 2005 and amended on May
3, 2007, May 14, 2008, and June 4, 2010. Applicants have agreed to file
an amendment during the notice period, the substance of which is
reflected in this notice.
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 October 25, 2010, 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, 800 Third Avenue,
New York, New York 10022.
FOR FURTHER INFORMATION CONTACT: Deepak T Pai, Senior Counsel, at (202)
551-6876, or Mary Kay Frech, 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 via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at https://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Applicants' Representations:
1. RTC is registered as an investment adviser under the Investment
Advisers Act of 1940 (the ``Advisers Act'') and as a commodity pool
operator and commodity trading adviser with the Commodity Futures
Trading Commission under the Commodity Exchange Act, and is a member of
the National Futures Association. RTC provides investment management
services primarily to institutional investors as well as its own
employees and related parties and is the general partner, managing
member or investment adviser to several private funds. RTC and its
``affiliates,'' as defined in rule 12b-2 under the Securities Exchange
Act of 1934 (the
[[Page 61233]]
``1934 Act''), are referred to collectively as ``RTC Group.''
2. RTC has organized RMP as a Delaware limited liability company,
and RTC may in the future organize additional private investment funds
(``Future Pooled Investment Vehicles,'' and together with RMP, ``Pooled
Investment Vehicles'') identical in all respects to RMP (other than
investment objectives and strategies and form of organization) for the
benefit of the same categories of eligible investors as those investing
in RMP. RMP was formed to benefit Eligible Employees (as defined below)
and other eligible investors as part of a program by RTC to (a) create
capital building opportunities that are competitive with those at other
investment management firms, and (b) facilitate the recruitment and
retention by RTC of high caliber personnel and key administrative
employees. Investing in the Pooled Investment Vehicles will be
voluntary. RMP will operate as a non-diversified, closed-end management
investment company. Membership interests (``Interests'') in RMP will be
offered in two series--A and B (``Series''). Each Series will be
identical to the other except for the fees each will pay to RTC for the
services rendered to RMP by RTC. RMP and each Future Pooled Investment
Vehicle will be an ``employees' securities company'' as that term is
defined in section 2(a)(13) of the Act.
3. RTC serves as the managing member of RMP and will serve as the
general partner, managing member or investment adviser (``Managing
Member'') of the Future Pooled Investment Vehicles. RTC will control
each Pooled Investment Vehicle within the meaning of section 2(a)(9) of
the Act, and will have the authority to make all decisions regarding
the acquisition, management and disposition of the portfolio
investments for Pooled Investment Vehicles. RTC will be paid an
advisory fee for its services, which may be determined as a percentage
of assets under management. In addition, RTC may be entitled to a
performance-based fee or allocation based on net capital appreciation
in addition to the fixed fee.\1\
---------------------------------------------------------------------------
\1\ Any performance fee or allocation will be charged only if
permitted by rule 205-3 under the Advisers Act.
---------------------------------------------------------------------------
4. RTC, as Managing Member, and any other person acting for or on
behalf of the Pooled Investment Vehicles shall act in the best interest
of the Pooled Investment Vehicles and their Participants (as defined
below). Whenever RTC or any other person acting for or on behalf of the
Pooled Investment Vehicles is required or permitted to make a decision,
take or approve an action, or omit to do any of the foregoing in such
person's discretion, then that person shall exercise such discretion in
accordance with reasonableness and good faith and any fiduciary duties
owed to the Pooled Investment Vehicles and the Participants. The
organizational documents for, and any other contractual arrangements
regarding, a Pooled Investment Vehicle will not contain any provision
which protects or purports to protect RTC or its delegates against any
liability to the Pooled Investment Vehicles or the Participants to
which such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of such
person's duties, or by reason of such person's reckless disregard of
such person's obligations and duties under such contract or
organizational documents.
5. Interests in the Pooled Investment Vehicles will be offered to
Eligible Investors (as defined below) without registration in reliance
on section 4(2) of the Securities Act of 1933 (the ``1933 Act'') or
Regulation D under the 1933 Act. RTC must reasonably believe, before
offering an Interest to an Eligible Investor, that such person has the
knowledge, sophistication and experience in business and financial
matters to be capable of evaluating the merits and risks of the
investment, is able to bear the economic risk of such investment, and
is able to afford a complete loss of such investment.
6. ``Eligible Investors'' who may invest in the Pooled Investment
Vehicles are: (a) Individuals who are current or former employees,
officers or directors of the RTC Group (``Eligible Employees''); (b) a
spouse, child, spouse of a child, brother, sister, parent or grandchild
of an individual who is an Eligible Employee (``Eligible Family
Members''); (c) persons or entities whom the RTC Group has engaged on
retainer to provide services and professional expertise on an ongoing
basis as regular consultants in business or legal advisers to the RTC
Group and who share a community of interest with RTC and RTC employees
(``Consultants''); and (d) either (i) trusts or other investment
vehicles of which the trustees or grantors are Eligible Employees or
Eligible Employees together with their Eligible Family Members, (ii)
trusts or other investment vehicles established solely for the benefit
of Eligible Employees, Consultants or Eligible Family Members, or (iii)
partnerships, corporations or other entities all of the voting power of
which is controlled by Eligible Employees (``Qualified Investment
Entities'') (together with Eligible Employees, Eligible Family Members
and Consultants, ``Eligible Investors'').
7. All Eligible Investors investing in RMP must be ``accredited
investors'' as defined in rule 501(a)(5) or 501(a)(6) of Regulation D,
except that up to 35 Eligible Employees who are non-accredited
investors may invest in RMP provided they fall into one of the
following categories: (a) Eligible Employees who (i) Have a graduate
degree in business, law or accounting, (ii) have a minimum of five
years of consulting, investment banking or similar business experience,
and (iii) have had reportable income from all sources of at least
$100,000 in each of the two most recent years and have a reasonable
expectation of income from all sources of at least $140,000 in the
years in which the Eligible Employee invests in a Pooled Investment
Vehicle; or (b) Eligible Employees who are ``knowledgeable employees,''
as defined in rule 3c-5 under the Act, of the Pooled Investment Vehicle
(with the Pooled Investment Vehicle treated as though it were a
``covered company'' for purposes of the rule). In addition, an Eligible
Employee in category (a) above 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 the Pooled Investment
Vehicle and in all other Pooled Investment Vehicles in which that
Eligible Employee has previously invested.
8. A Qualified Investment Entity must be either (a) an accredited
investor as defined in rule 501(a) of Regulation D, or (b) an entity
for which an Eligible Employee is the settlor and principal investment
decisionmaker and is counted toward the limit on the 35 non-accredited
investors that may invest in a Pooled Investment Vehicle.
9. The specific investment objectives and strategies for a
particular Pooled Investment Vehicle will be set forth in the private
placement memorandum relating to the Interests in the Pooled Investment
Vehicles being offered, which will be delivered to each offeree at or
before the sale of an Interest. Each Pooled Investment Vehicle will
furnish to those Eligible Investors who are accepted as investors
(``Participants'') annual financial statements audited by its
registered public accounting firm and unaudited monthly reports of the
results
[[Page 61234]]
of its investments.\2\ In addition, RTC will cause a report to be sent
to each Participant in a Pooled Investment Vehicle, as soon as
practicable after the end of each fiscal year, setting forth the
information with respect to his or her share of income, gains, losses,
credits and other items for federal and state income tax purposes.
---------------------------------------------------------------------------
\2\ ``Audit'' shall have the meaning defined in rule 1-02(d) of
Regulation S-X.
---------------------------------------------------------------------------
10. Interests in the Pooled Investment Vehicles will not be
transferable except with the express consent of RTC and then only to
Eligible Investors. No sales load or fees of any kind will be charged
in connection with the sale of Interests. Each private placement
memorandum of the Pooled Investment Vehicles will describe the terms by
which a Participant may transfer an Interest or withdraw from the
Pooled Investment Vehicle. In addition, RTC has the right to cause any
Participant to withdraw without cause. Upon withdrawal, the Pooled
Investment Vehicles will pay to the Participant the net asset value of
the Interest determined at the time of withdrawal, as determined in
good faith by RTC.
11. RTC intends to structure an investment program in which the
Pooled Investment Vehicles will co-invest in portfolio companies with
RTC or other pooled investment funds organized primarily for the
benefit of investors who are not affiliated with RTC over which RTC
exercises investment discretion (``Third Party Funds'').\3\ Side-by-
side investments by a Third Party Fund, or by an RTC entity in a
transaction in which the RTC investment was made pursuant to a
contractual obligation to a Third Party Fund, will not be subject to
the restrictions contained in condition 3. All other side-by-side
investments will be subject to the restrictions contained in condition
3.
---------------------------------------------------------------------------
\3\ The investment objectives and program of one such Third
Party Fund, Renaissance Institutional Equities Fund LLC (``RIEF''),
will be substantially similar to RMP's investment objectives and
program.
---------------------------------------------------------------------------
12. RMP and other Pooled Investment Vehicles may borrow money from
others. Any indebtedness of the Pooled Investment Vehicles will be the
debt of such Pooled Investment Vehicles and without recourse to the
Participants. The Pooled Investment Vehicles will not borrow from any
person if the borrowing would cause any person other than an Eligible
Investor to own securities of the Pooled Investment Vehicles (other
than short term paper).
13. The Pooled Investment Vehicles will not purchase or otherwise
acquire any security issued by any registered investment company if the
Pooled Investment Vehicles immediately after such purchase or
acquisition will own in the aggregate more than 3% of the total
outstanding voting stock of such 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 RMP and each Future Pooled Investment Vehicle 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) of the Act 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) RTC
or a Third Party Fund (or any affiliated person of RTC or a Third Party
Fund), acting as principal, to engage in any transaction directly or
indirectly with a Pooled Investment Vehicle or any company controlled
by a Pooled Investment Vehicle; and (b) the Pooled Investment Vehicles
to invest in or engage in any transaction with any RTC entity (or any
affiliated person of such entity), acting as principal, (i) in which
the Pooled Investment Vehicles, any company controlled by a Pooled
Investment Vehicle, or any RTC entity or Third Party Fund has invested
or will invest, or (ii) with which the Pooled Investment Vehicles, any
company controlled by a Pooled Investment Vehicle or any RTC entity or
Third Party Fund is or will become affiliated.
4. Applicants submit that an exemption from section 17(a) is
consistent with the purposes of the Pooled Investment Vehicles and the
protection of investors. Applicants state that Participants in the
Pooled Investment Vehicles will be fully informed of the possible
extent of the Pooled Investment Vehicles' co-investing with RTC and
Third Party Funds. Applicants also state that, as professionals
employed in the investment management business, or in administrative,
financial, accounting, legal or operational activities related thereto,
or otherwise familiar with RTC, Eligible Investors will be able to
understand and evaluate the attendant risks. Applicants assert that the
community of interest among the Eligible Investors investing in the
Pooled Investment Vehicles, on the one hand, and RTC, on the other
hand, will protect Participants 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 registered investment
company unless authorized by the Commission. Applicants request an
order pursuant to section 17(d) and rule 17d-1 to the extent necessary
to permit affiliated persons of RMP and the Future Pooled Investment
Vehicles (including, without limitation, RTC, affiliated persons of RTC
and a Third Party Fund), or affiliated persons of any of these persons
to participate in, or effect any transaction in connection with, any
joint enterprise or other joint arrangement or profit-sharing plan in
which any Pooled Investment Vehicle or a company controlled by any
Pooled Investment Vehicle is a participant.
[[Page 61235]]
6. Applicants assert that compliance with section 17(d) would
prevent RMP and the Future Pooled Investment Vehicles from achieving
their principal purpose, which is to provide Eligible Employees a
vehicle through which they may invest in the same securities as RIEF or
another Third Party Fund. Applicants believe that if RMP's or any
Future Pooled Investment Vehicle's co-investments with RTC and its
affiliated persons and affiliated persons of its affiliated persons are
prohibited, the appeal of RMP and Future Pooled Investment Vehicles for
the Eligible Investors would be significantly diminished. Eligible
Investors have indicated a desire to participate in such co-investment
opportunities because they believe that: (a) RTC can analyze investment
opportunities to an extent that individual employees would have neither
the time nor resources to duplicate; (b) investments made by Third
Party Funds managed by RTC may not be generally available to or
available on the same terms and conditions to investors even of the
financial status of the Eligible Investors; and (c) Eligible Investors
will be able to pool their investment resources, thus achieving greater
diversification of their individual investment portfolios. Applicants
further believe 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. Applicants believe that the interests of the Eligible Employees
participating in the Pooled Investment Vehicles will be adequately
protected even in situations where condition 3 does not apply. In
structuring a Third Party Fund, it is common for the unaffiliated
investors of such fund to require that RTC invest its own capital in
fund investments, either through the fund or on a side-by-side basis,
and that RTC investments be subject to substantially the same terms as
those applicable to the fund's investments. Applicants believe it is
important that the interests of the Third Party Fund take priority over
the interests of the Pooled Investment Vehicles, and that the
activities of the Third Party Fund not be burdened or otherwise
affected by activities of the Pooled Investment Vehicles. If condition
3 were to apply to RTC's investment in these situations, the effect of
such a requirement would be to indirectly burden the Third Party Fund
with the requirements of condition 3. In addition, applicants state
that the relationship of RMP to RIEF or another Pooled Investment
Vehicle to another Third Party Fund is fundamentally different from
RMP's and the other Pooled Investment Vehicles' relationship to RTC.
The focus of, and the rationale for, the protections contained in the
requested relief are to protect the Pooled Investment Vehicles from any
overreaching by RTC in the employer/employee context, whereas the same
concerns are not present with respect to RMP and the other Pooled
Investment Vehicles vis-[agrave]-vis the investors in RIEF or other
Third Party Funds.
8. 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 the following exceptions from the requirements
of rule 17f-1: (a) In lieu of compliance with rule 17f-1(b)(1), RMP and
each Future Pooled Investment Vehicle will enter into a written
customer and prime broker agreement with one or more broker-dealers
each of whom is a member of the New York Stock Exchange LLC in
substantially similar form to the form used by the subject prime
broker(s); \4\ (b) in lieu of compliance with rule 17f-1(b)(4), the
Pooled Investment Vehicles' registered public accountant shall semi-
annually reconcile the prime broker's statement of each Pooled
Investment Vehicle's account with each Pooled Investment Vehicle's
records of its holdings of cash and securities and issue to each Pooled
Investment Vehicle a report on such reconciliation; (c) the Pooled
Investment Vehicles will not comply with rule 17f-1(c), which requires
transmitting to the Commission a copy of any contract executed pursuant
to rule 17f-1; and (d) RTC as the Managing Member will approve the
contracts required to be ratified by the board of directors in rule
17f-1(d). Applicants will comply with all other requirements of rule
17f-1.
---------------------------------------------------------------------------
\4\ Almost all of the securities in which RMP and the Future
Pooled Investment Vehicles will invest will be eligible for deposit
in a securities depository registered as a clearing agency under the
1934 Act. There will be no physical segregation, and segregation
will be accomplished by entries on the books and records of the
prime broker and periodic account statements issued by the prime
broker to RMP and each Future Pooled Investment Vehicle will reflect
such recordation.
---------------------------------------------------------------------------
9. 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 instead that such actions and
approvals be taken by RTC, regardless of whether it is deemed to be an
interested person of such Pooled Investment Vehicles. Applicants state
that because RTC will be considered an interested person of each Pooled
Investment Vehicle, the Pooled Investment Vehicles could not comply
with rule 17g-1 without the requested relief. Applicants also request
an exemption from the requirements of paragraphs (g) and (h) of rule
17g-1 relating to the filing of copies of fidelity bonds and related
information with the Commission and the provision of notices to the
board of directors, and from the requirements of rule 17g-1(j)(3) that
the board of directors of an investment company satisfy the fund
governance standards defined in rule 0-1(a)(7). The Pooled Investment
Vehicles will comply with all other requirements of rule 17g-1.
10. 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 Pooled
Investment Vehicles and would serve little purpose in light of the
community of interest among the Participants by virtue of their common
association with RTC.
11. 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 the
Pooled Investment Vehicles and would entail administrative and legal
costs that outweigh any benefit to the Participants in the Pooled
Investment Vehicles. Applicants request exemptive relief to the extent
necessary to permit the Pooled Investment Vehicles to report annually
to their Participants. Applicants also request an exemption from
section 30(h) of the Act to the
[[Page 61236]]
extent necessary to exempt RTC, directors and officers of RTC and any
other persons who may be deemed members of an advisory board of the
Pooled Investment Vehicles from filing Forms 3, 4 and 5 under section
16 of the 1934 Act with respect to their ownership of Interests in the
Pooled Investment Vehicles. Applicants assert that, because there would
be no trading market and the transfers of Interests are severely
restricted, these filings are unnecessary for the protection of
investors and burdensome to those required to make them.
12. Rule 38a-1 requires investment companies to adopt, implement
and periodically review written policies reasonably designed to prevent
violation of the federal securities laws and to appoint a chief
compliance officer. RMP and Future Pooled Investment Vehicles will
comply will rule 38a-1(a), (c) and (d), except that the board of
directors of RTC, the Managing Member, will fulfill the
responsibilities assigned to a fund's board of directors under the rule
and, since all the members of RTC's board of directors would be
considered interested persons, approval by a majority of the
disinterested directors required by rule 38a-1 will not be obtained. In
addition, because the board of directors of RTC does not have any
disinterested directors, RMP and the Future Pooled Investment Vehicles
will comply with the requirement in rule 38a-1(a)(4)(iv) that the chief
compliance officer meet with the disinterested directors by having the
chief compliance officer meet with the board of directors of RTC 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) of the Act and rule 17d-1 thereunder to which RMP or a
Future Pooled Investment Vehicle is a party (the ``Section 17
Transactions'') will be effected only if RTC determines that:
(a) The terms of the Section 17 Transaction, including the
consideration to be paid or received, are fair and reasonable to the
Participants in the Pooled Investment Vehicle and do not involve
overreaching of the Pooled Investment Vehicle or its Participants on
the part of any person concerned; and
(b) The Section 17 Transaction is consistent with the interests of
the Participants, the organizational documents of the Pooled Investment
Vehicle, and the Pooled Investment Vehicle's reports to its
Participants.
In addition, RTC will record and preserve a description of the
Section 17 Transactions, the findings of RTC, the information or
materials upon which the findings of RTC are based, and the basis for
those findings. All such records will be maintained for the life of the
Pooled Investment Vehicles and at least six years thereafter, and will
be subject to examination by the Commission and its staff. The Pooled
Investment Vehicles 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, RTC 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 the Pooled Investment Vehicles, or any affiliated
person of any such person, promoter or principal underwriter.
3. RTC will not invest the funds of a Pooled Investment Vehicle in
any investment in which a ``Co-Investor'' (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 a Pooled
Investment Vehicle and the Co-Investor are participants, unless any
such Co-Investor, prior to disposing of all or part of its investment:
(a) Gives RTC 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 any Pooled Investment Vehicle has the opportunity
to dispose of its investment prior to or concurrently with, and on the
same terms as, and pro rata with the Co-Investor. The term ``Co-
Investor'' with respect to RMP or a Future Pooled Investment Vehicle
means any person who is: (a) An affiliated person (as defined in
section 2(a)(3) of the Act) of the Pooled Investment Vehicle (other
than a Third Party Fund); (b) RTC; (c) an officer or director of RTC;
or (d) an entity (other than a Third Party Fund) in which RTC acts as a
general partner, managing member, trustee or has a similar capacity to
control the sale or other disposition of the entity's securities.
The restrictions contained in this condition, however, will 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 the 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 the Co-
Investor or to a trust or other investment vehicle established for any
Co-Investor or any such 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 600(a) of Regulation NMS thereunder; (e) when the securities are
government securities as defined in section 2(a)(16) of the Act; and
(f) when the investment is comprised of securities that are listed on
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.
4. The Pooled Investment Vehicles and RTC will maintain and
preserve, for the life of each Pooled Investment Vehicle 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 the Pooled
Investment Vehicles, and each annual report of each Pooled Investment
Vehicle required to be sent to such Participants, and agree that all
such records will be subject to examination by the Commission and its
staff.\5\
---------------------------------------------------------------------------
\5\ RMP and the Pooled Investment Vehicles will preserve the
accounts, books and other documents required to be maintained in an
easily accessible place for the first two years.
---------------------------------------------------------------------------
5. Each Pooled Investment Vehicle will send to each Participant in
such Pooled Investment Vehicle who had an interest in the Pooled
Investment Vehicle at any time during the fiscal year then ended
financial statements of the Pooled Investment Vehicle audited by the
Pooled Investment Vehicle's independent public accountants. At the end
of each fiscal year, RTC will make a valuation or have a valuation made
of all of the assets of the Pooled Investment Vehicle 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 Pooled Investment
Vehicle. In addition, within 120 days after the end of each Pooled
Investment Vehicle's
[[Page 61237]]
fiscal year or as soon as practicable thereafter, RTC will send a
report to each person who was a Participant in a Pooled Investment
Vehicle 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 that Participant's federal and state income tax returns
and a report of the investment activities of the Pooled Investment
Vehicle during that fiscal year.
6. If any Pooled Investment Vehicle makes purchases or sales from
or to an entity affiliated with such Pooled Investment Vehicle by
reason of an officer, director or employee of RTC (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 Pooled Investment Vehicle'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. 2010-24787 Filed 10-1-10; 8:45 am]
BILLING CODE 8010-01-P
