Genesis Capital, LLC and Northern Lights Fund Trust; Notice of Application, 73748-73749 [2011-30632]

Download as PDF 73748 Federal Register / Vol. 76, No. 229 / Tuesday, November 29, 2011 / Notices [FR Doc. 2011–30647 Filed 11–28–11; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 29867; 812–13935] Genesis Capital, LLC and Northern Lights Fund Trust; Notice of Application 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 http:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicants’ Representations 1. The Trust, a Delaware statutory trust, is registered under the Act as an AGENCY: Securities and Exchange open-end management investment Commission (‘‘Commission’’). company and as of November 9, 2011 ACTION: Notice of an application for an was comprised of 123 individual order under section 6(c) of the registered series, including the SCA Investment Company Act of 1940 Absolute Return Fund and the SCA (‘‘Act’’) for an exemption from section Directional Fund (the ‘‘Absolute Return 15(a) of the Act and rule 18f–2 under Fund’’ and ‘‘Directional Fund,’’ the Act. respectively, and together, the ‘‘SCA Funds’’), and 10 additional series that SUMMARY OF APPLICATION: Applicants request an order that would permit them are in registration. The SCA Funds do not currently employ unaffiliated to enter into and materially amend investment subadvisers (each, a subadvisory agreements without ‘‘Subadviser’’), but anticipate doing so shareholder approval. in the future.1 Genesis Capital, a APPLICANTS: Genesis Capital, LLC Washington limited liability company, (‘‘Genesis Capital’’ or the ‘‘Adviser’’) is, and each other Adviser will be, and Northern Lights Fund Trust (the registered as an investment adviser ‘‘Trust’’). under the Investment Advisers Act of DATES: Filing Dates: The application was 1940 (‘‘Advisers Act’’). Genesis Capital filed on August 3, 2011, and amended serves as the investment adviser of the on November 14, 2011. Absolute Return Fund and Directional Hearing or Notification of Hearing: An Fund, and an Adviser will serve as order granting the application will be investment adviser to each future Fund, issued unless the Commission orders a pursuant to investment advisory hearing. Interested persons may request agreements (‘‘Advisory Agreements’’). a hearing by writing to the The SCA Funds’ Advisory Agreements Commission’s Secretary and serving were approved by the Trust’s board of applicants with a copy of the request, trustees (together with the board of personally or by mail. Hearing requests directors or trustees of any other Fund, should be received by the Commission the ‘‘Board’’), including a majority of the by 5:30 p.m. on December 16, 2011, and trustees who are not ‘‘interested should be accompanied by proof of persons,’’ as defined in section 2(a)(19) service on the applicants, in the form of an affidavit or, for lawyers, a certificate 1 Applicants also request relief with respect to of service. Hearing requests should state any existing or future series of the Trust and any other existing or future registered open-end the nature of the writer’s interest, the management investment company or series thereof reason for the request, and the issues that: (a) Is advised by the Adviser or any entity contested. Persons who wish to be controlling, controlled by, or under common control with the Adviser or its successors (included notified of a hearing may request within the term ‘‘Adviser’’); (b) uses the manager of notification by writing to the managers structure (‘‘Manager of Managers Commission’s Secretary. Structure’’) described in the application; and (c) complies with the terms and conditions of the ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street application (together with the SCA Funds, the ‘‘Funds’’ and each, individually, a ‘‘Fund’’). For the NE., Washington, DC 20549–1090. purposes of the requested order, ‘‘successor’’ is Applicants: Genesis Capital, 7191 limited to those one or more entities that would result from a reorganization into another Wagner Way NW., Suite 302, Gig jurisdiction or a change in the type of business Harbor, WA 98335; Trust: 4020 South organization. All existing entities that currently 147th Street, Omaha, NE 68137. intend to rely on the requested order are named as applicants, and the Absolute Return Fund and FOR FURTHER INFORMATION CONTACT: Directional Fund are the only series that currently Steven I. Amchan, Senior Counsel, at intend to rely on the requested order. If the name (202) 551–6826, or Dalia Osman Blass, of any Fund contains the name of a Subadviser, the Assistant Director, at (202) 551–6821 name of the Adviser will precede the name of the Subadviser. (Division of Investment Management, mstockstill on DSK4VPTVN1PROD with NOTICES November 21, 2011. VerDate Mar<15>2010 18:06 Nov 28, 2011 Jkt 226001 PO 00000 Frm 00167 Fmt 4703 Sfmt 4703 of the Act, of the Trust or the Adviser (‘‘Independent Trustees’’) and will be approved by the initial shareholder of the Absolute Return Fund and Directional Fund, respectively, upon commencement of each respective Fund’s operations. 2. Under the terms of the SCA Funds’ Advisory Agreements, the Adviser is responsible for the overall management of the Absolute Return Fund’s and Directional Fund’s business affairs and selecting investments according to their respective investment objectives, policies and restrictions. For the investment management services that it provides to those Funds, the Adviser receives the fee specified in the Advisory Agreements. The Advisory Agreements also permit the Adviser to retain one or more subadvisers for the purpose of managing the investments of all or a portion of the assets of the Absolute Return Fund and Directional Fund. Pursuant to this authority, the Adviser may enter into investment subadvisory agreements with Subadvisers to provide investment advisory services to the Absolute Return Fund and Directional Fund, respectively (such agreements with Subadvisers, ‘‘Subadvisory Agreements’’). Each Subadviser will be registered as an investment adviser under the Advisers Act. The Adviser will supervise, evaluate and allocate assets to the Subadvisers, and make recommendations to the Board about their hiring, retention or release, at all times subject to the authority of the Board. The Adviser will compensate each Subadviser out of the fees paid to the Adviser under the Advisory Agreement. 3. Applicants request an order to permit the Adviser, subject to Board approval, to enter into and materially amend Subadvisory Agreements without obtaining shareholder approval. The requested relief will not extend to any subadviser that is an affiliated person, as defined in section 2(a)(3) of the Act, of the Trust, a Fund or the Adviser, other than by reason of serving as a subadviser to one or more of the Funds (‘‘Affiliated Subadviser’’). Applicants’ Legal Analysis 1. Section 15(a) of the Act provides, in relevant part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract that has been approved by the vote of a majority of the company’s outstanding voting securities. Rule 18f– 2 under the Act provides that each series or class of securities in a series investment company affected by a E:\FR\FM\29NON1.SGM 29NON1 Federal Register / Vol. 76, No. 229 / Tuesday, November 29, 2011 / Notices matter must approve that matter if the Act requires shareholder approval. 2. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or from any rule thereunder, if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that the requested relief meets this standard. 3. Applicants assert that the shareholders expect the Adviser and the Board to select the Subadvisers for the Funds that are best suited to achieve each Fund’s investment objective. Applicants assert that, from the perspective of the investor, the role of the Subadvisers is substantially equivalent to that of the individual portfolio managers employed by the Adviser. Applicants state that requiring shareholder approval of each Subadvisory Agreement would impose costs and unnecessary delays on the Funds, and may preclude the Adviser from acting promptly in a manner considered advisable by the Board. Applicants note that the Advisory Agreements and any Subadvisory Agreement with an Affiliated Subadviser will remain subject to section 15(a) of the Act and rule 18f–2 under the Act, including the requirement for shareholder voting. mstockstill on DSK4VPTVN1PROD with NOTICES Applicants’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Before a Fund may rely on the requested order, the operation of the Fund in the manner described in the application will be approved by a majority of the Fund’s outstanding voting securities, as defined in the Act, or in the case of a Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder(s) before offering shares of that Fund to the public. 2. Each Fund relying on the requested order will disclose in its prospectus the existence, substance, and effect of any order granted pursuant to this application. Each Fund will hold itself out to the public as utilizing the Manager of Managers Structure. The prospectus will prominently disclose that the Adviser has ultimate responsibility (subject to oversight by the Board) to oversee the Subadvisers VerDate Mar<15>2010 15:20 Nov 28, 2011 Jkt 226001 and recommend their hiring, termination, and replacement. 3. Within 90 days of the hiring of a new Subadviser, shareholders of the affected Fund will be furnished all information about the new Subadviser that would be included in a proxy statement. To meet this obligation, each Fund will provide shareholders within 90 days of the hiring of a new Subadviser an information statement meeting the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Securities Exchange Act of 1934. 4. The Adviser will not enter into a subadvisory agreement with any Affiliated Subadviser without such agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Fund. 5. At all times, at least a majority of the Board will be Independent Trustees, and the nomination of new or additional Independent Trustees will be placed within the discretion of the thenexisting Independent Trustees. 6. Whenever a subadviser change is proposed for a Fund with an Affiliated Subadviser, the Board, including a majority of the Independent Trustees, 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. 7. The Adviser will provide general management services to each Fund, including overall supervisory responsibility for the general management and investment of each 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 each Fund’s assets; (c) allocate and, when appropriate, reallocate each Fund’s assets among one or more Subadvisers; (d) monitor and evaluate the performance of Subadvisers; and (e) implement procedures reasonably designed to ensure that the Subadvisers comply with each Fund’s investment objective, policies and restrictions. 8. No trustee or officer of the Trust or a Fund, or director, manager, 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 PO 00000 Frm 00168 Fmt 4703 Sfmt 4703 73749 Adviser, or (b) ownership of less than 1% of the outstanding securities of any class of equity or debt of any publicly traded company that is either a Subadviser or an entity that controls, is controlled by, or is under common control with a Subadviser. 9. In the event the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the application, the requested order will expire on the effective date of that rule. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–30632 Filed 11–28–11; 8:45 am] BILLING CODE 8011–01–P 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 Thursday, December 1, 2011 at 2 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 Aguilar, 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 Thursday, December 1, 2011 will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; adjudicatory matters; 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. E:\FR\FM\29NON1.SGM 29NON1

Agencies

[Federal Register Volume 76, Number 229 (Tuesday, November 29, 2011)]
[Notices]
[Pages 73748-73749]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30632]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29867; 812-13935]


Genesis Capital, LLC and Northern Lights Fund Trust; Notice of 
Application

November 21, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (``Act'') for an exemption from section 
15(a) of the Act and rule 18f-2 under the Act.

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Summary of Application: Applicants request an order that would permit 
them to enter into and materially amend subadvisory agreements without 
shareholder approval.

Applicants: Genesis Capital, LLC (``Genesis Capital'' or the 
``Adviser'') and Northern Lights Fund Trust (the ``Trust'').

DATES: Filing Dates: The application was filed on August 3, 2011, and 
amended on November 14, 2011.
    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 applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on December 16, 2011, and should be accompanied by proof of 
service on the applicants, 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: Genesis Capital, 
7191 Wagner Way NW., Suite 302, Gig Harbor, WA 98335; Trust: 4020 South 
147th Street, Omaha, NE 68137.

FOR FURTHER INFORMATION CONTACT: Steven I. Amchan, Senior Counsel, at 
(202) 551-6826, or Dalia Osman Blass, Assistant Director, 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 http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Trust, a Delaware statutory trust, is registered under the 
Act as an open-end management investment company and as of November 9, 
2011 was comprised of 123 individual registered series, including the 
SCA Absolute Return Fund and the SCA Directional Fund (the ``Absolute 
Return Fund'' and ``Directional Fund,'' respectively, and together, the 
``SCA Funds''), and 10 additional series that are in registration. The 
SCA Funds do not currently employ unaffiliated investment subadvisers 
(each, a ``Subadviser''), but anticipate doing so in the future.\1\ 
Genesis Capital, a Washington limited liability company, is, and each 
other Adviser will be, registered as an investment adviser under the 
Investment Advisers Act of 1940 (``Advisers Act''). Genesis Capital 
serves as the investment adviser of the Absolute Return Fund and 
Directional Fund, and an Adviser will serve as investment adviser to 
each future Fund, pursuant to investment advisory agreements 
(``Advisory Agreements''). The SCA Funds' Advisory Agreements were 
approved by the Trust's board of trustees (together with the board of 
directors or trustees of any other Fund, the ``Board''), including a 
majority of the trustees who are not ``interested persons,'' as defined 
in section 2(a)(19) of the Act, of the Trust or the Adviser 
(``Independent Trustees'') and will be approved by the initial 
shareholder of the Absolute Return Fund and Directional Fund, 
respectively, upon commencement of each respective Fund's operations.
---------------------------------------------------------------------------

    \1\ Applicants also request relief with respect to any existing 
or future series of the Trust and any other existing or future 
registered open-end management investment company or series thereof 
that: (a) Is advised by the Adviser or any entity controlling, 
controlled by, or under common control with the Adviser or its 
successors (included within the term ``Adviser''); (b) uses the 
manager of managers structure (``Manager of Managers Structure'') 
described in the application; and (c) complies with the terms and 
conditions of the application (together with the SCA Funds, the 
``Funds'' and each, individually, a ``Fund''). For the purposes of 
the requested order, ``successor'' is limited to those one or more 
entities that would result from a reorganization into another 
jurisdiction or a change in the type of business organization. All 
existing entities that currently intend to rely on the requested 
order are named as applicants, and the Absolute Return Fund and 
Directional Fund are the only series that currently intend to rely 
on the requested order. If the name of any Fund contains the name of 
a Subadviser, the name of the Adviser will precede the name of the 
Subadviser.
---------------------------------------------------------------------------

    2. Under the terms of the SCA Funds' Advisory Agreements, the 
Adviser is responsible for the overall management of the Absolute 
Return Fund's and Directional Fund's business affairs and selecting 
investments according to their respective investment objectives, 
policies and restrictions. For the investment management services that 
it provides to those Funds, the Adviser receives the fee specified in 
the Advisory Agreements. The Advisory Agreements also permit the 
Adviser to retain one or more subadvisers for the purpose of managing 
the investments of all or a portion of the assets of the Absolute 
Return Fund and Directional Fund. Pursuant to this authority, the 
Adviser may enter into investment subadvisory agreements with 
Subadvisers to provide investment advisory services to the Absolute 
Return Fund and Directional Fund, respectively (such agreements with 
Subadvisers, ``Subadvisory Agreements''). Each Subadviser will be 
registered as an investment adviser under the Advisers Act. The Adviser 
will supervise, evaluate and allocate assets to the Subadvisers, and 
make recommendations to the Board about their hiring, retention or 
release, at all times subject to the authority of the Board. The 
Adviser will compensate each Subadviser out of the fees paid to the 
Adviser under the Advisory Agreement.
    3. Applicants request an order to permit the Adviser, subject to 
Board approval, to enter into and materially amend Subadvisory 
Agreements without obtaining shareholder approval. The requested relief 
will not extend to any subadviser that is an affiliated person, as 
defined in section 2(a)(3) of the Act, of the Trust, a Fund or the 
Adviser, other than by reason of serving as a subadviser to one or more 
of the Funds (``Affiliated Subadviser'').

Applicants' Legal Analysis

    1. Section 15(a) of the Act provides, in relevant part, that it is 
unlawful for any person to act as an investment adviser to a registered 
investment company except pursuant to a written contract that has been 
approved by the vote of a majority of the company's outstanding voting 
securities. Rule 18f-2 under the Act provides that each series or class 
of securities in a series investment company affected by a

[[Page 73749]]

matter must approve that matter if the Act requires shareholder 
approval.
    2. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provisions of the Act, or 
from any rule thereunder, if such exemption is necessary or appropriate 
in the public interest and consistent with the protection of investors 
and the purposes fairly intended by the policy and provisions of the 
Act. Applicants state that the requested relief meets this standard.
    3. Applicants assert that the shareholders expect the Adviser and 
the Board to select the Subadvisers for the Funds that are best suited 
to achieve each Fund's investment objective. Applicants assert that, 
from the perspective of the investor, the role of the Subadvisers is 
substantially equivalent to that of the individual portfolio managers 
employed by the Adviser. Applicants state that requiring shareholder 
approval of each Subadvisory Agreement would impose costs and 
unnecessary delays on the Funds, and may preclude the Adviser from 
acting promptly in a manner considered advisable by the Board. 
Applicants note that the Advisory Agreements and any Subadvisory 
Agreement with an Affiliated Subadviser will remain subject to section 
15(a) of the Act and rule 18f-2 under the Act, including the 
requirement for shareholder voting.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Before a Fund may rely on the requested order, the operation of 
the Fund in the manner described in the application will be approved by 
a majority of the Fund's outstanding voting securities, as defined in 
the Act, or in the case of a Fund whose public shareholders purchase 
shares on the basis of a prospectus containing the disclosure 
contemplated by condition 2 below, by the initial shareholder(s) before 
offering shares of that Fund to the public.
    2. Each Fund relying on the requested order will disclose in its 
prospectus the existence, substance, and effect of any order granted 
pursuant to this application. Each Fund will hold itself out to the 
public as utilizing the Manager of Managers Structure. 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, shareholders 
of the affected Fund will be furnished all information about the new 
Subadviser that would be included in a proxy statement. To meet this 
obligation, each Fund will provide shareholders within 90 days of the 
hiring of a new Subadviser an information statement meeting the 
requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 
14A under the Securities Exchange Act of 1934.
    4. The Adviser will not enter into a subadvisory agreement with any 
Affiliated Subadviser without such agreement, including the 
compensation to be paid thereunder, being approved by the shareholders 
of the applicable Fund.
    5. At all times, at least a majority of the Board will be 
Independent Trustees, and the nomination of new or additional 
Independent Trustees will be placed within the discretion of the then-
existing Independent Trustees.
    6. Whenever a subadviser change is proposed for a Fund with an 
Affiliated Subadviser, the Board, including a majority of the 
Independent Trustees, 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.
    7. The Adviser will provide general management services to each 
Fund, including overall supervisory responsibility for the general 
management and investment of each 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 each Fund's assets; (c) allocate and, when 
appropriate, reallocate each Fund's assets among one or more 
Subadvisers; (d) monitor and evaluate the performance of Subadvisers; 
and (e) implement procedures reasonably designed to ensure that the 
Subadvisers comply with each Fund's investment objective, policies and 
restrictions.
    8. No trustee or officer of the Trust or a Fund, or director, 
manager, 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 any publicly traded company that is either a Subadviser or an 
entity that controls, is controlled by, or is under common control with 
a Subadviser.
    9. In the event the Commission adopts a rule under the Act 
providing substantially similar relief to that in the order requested 
in the application, the requested order will expire on the effective 
date of that rule.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30632 Filed 11-28-11; 8:45 am]
BILLING CODE 8011-01-P