Duncan Family Office; Notice of Application, 38339-38341 [2014-15796]
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Federal Register / Vol. 79, No. 129 / Monday, July 7, 2014 / Notices
approximately 21 percent. Applicant
maintains that, from the perspective of
the Gruss Family, Applicant seeks to
continue providing Advisory Services
exclusively to members of a single
family.
4. Applicant also submits that there is
no public interest in requiring the
Applicant to be registered under the
Advisers Act. Applicant states that the
office is a private organization that was
formed to be the ‘‘family office’’ for the
Gruss Family, and that the office does
not have any public clients. Applicant
maintains that the office’s Advisory
Services are tailored exclusively to the
needs of the Gruss Family and the
Additional Family Clients. Applicant
argues that the presence of the
Additional Family Clients, who have
been receiving Advisory Services from
the office for 14 years, does not create
any public interest that would require
the office to be registered under the
Advisers Act that is different in any
manner than the considerations that
apply to a ‘‘family office’’ that complies
in all respects with the Family Office
Rule.
5. Applicant argues that, although the
Family Office Rule largely codified the
exemptive orders that the Commission
had previously issued before the
enactment of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act, the Commission recognized in
proposing the rule that the exact
representations, conditions, or terms
contained in every exemptive order
could not be captured in a rule of
general applicability. The Commission
noted that family offices would remain
free to seek a Commission exemptive
order to advise an individual or entity
that did not meet the proposed family
client definition, and that certain
situations may raise unique conflicts
and issues that are more appropriately
addressed through an exemptive order
process where the Commission can
consider the specific facts and
circumstances, than through a rule of
general applicability. Applicant
maintains that its unusual
circumstances—providing Services to
Family Clients and to the Additional
Family Clients for the past 14 years—
have not changed the nature of the
office’s operations into that of a
commercial advisory business, and that
an exemptive order is appropriate based
on the Applicant’s specific facts and
circumstances.
6. For the foregoing reasons,
Applicant requests an order declaring it
to be a person not within the intent of
section 202(a)(11) of the Advisers Act.
Applicant submits that the order is
necessary and appropriate, in the public
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interest, consistent with the protection
of investors, and consistent with the
purposes fairly intended by the policy
and provisions of the Advisers Act.
Applicant’s Conditions
1. The Applicant will offer and
provide Advisory Services only to
Family Clients and to the Additional
Family Clients, who will be deemed to
be, and treated as if each were, a Family
Client; provided, however, that the
Additional Family Clients will be
deemed to be, and treated as if they
were, Family Members for purposes of
paragraph (b)(1) and for purposes of
paragraph (d)(4)(vi) of the Family Office
Rule.
2. The Applicant will at all times be
wholly-owned by Family Clients and
exclusively controlled (directly or
indirectly) by one or more Family
Members and/or Family Entities
(excluding the Additional Family
Clients’ Family Entities) as defined in
paragraph (d)(5) of the Family Office
Rule.
3. At all times the assets beneficially
owned by Family Members and/or
Family Entities (excluding the
Additional Family Clients’ Family
Entities) will account for at least 75
percent of the assets for which
Applicant provides Advisory Services.
4. Applicant will comply with all the
terms for exclusion from the definition
of investment adviser under the
Advisers Act set forth in the Family
Office Rule except for the limited
exception requested by this application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014–15795 Filed 7–3–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IA–3867/803–00212]
Duncan Family Office; Notice of
Application
July 1, 2014.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
exemptive order under section
202(a)(11)(H) of the Investment Advisers
Act of 1940 (‘‘Advisers Act’’).
AGENCY:
Applicant: Duncan Family Office
(‘‘Applicant’’).
Relevant Advisers Act Sections:
Exemption requested under section
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38339
202(a)(11)(H) of the Advisers Act from
section 202(a)(11) of the Advisers Act.
Summary of Application: Applicant
requests that the Commission issue an
order declaring it to be a person not
within the intent of section 202(a)(11) of
the Advisers Act, which defines the
term ‘‘investment adviser.’’
DATES: Filing Dates: The application
was filed on March 27, 2012, and
amended on March 4, 2014, and April
22, 2014.
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 July 28, 2014 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 may request
notification of a hearing by writing to
the Commission’s Secretary.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street NE.,
Washington, DC 20549. Applicant,
Duncan Family Office, c/o Martin E.
Lybecker, Perkins Coie LLP, Suite 600,
700 Thirteenth Street NW., Washington,
DC 20005.
FOR FURTHER INFORMATION CONTACT:
Vanessa M. Meeks, Senior Counsel, at
(202) 551–6806 or Melissa R. Harke,
Branch Chief, at (202) 551–6722
(Division of Investment Management,
Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained for a fee at the SEC’s
Public Reference Branch, 100 F Street
NE., Washington, DC 20549–0102
(telephone (202) 551–5850).
Applicant’s Representations
1. Applicant is a multi-generational
single-family office that provides
services to the family and descendants
of Dan L. Duncan. Applicant is a
division of Enterprise Products
Company, an energy company located
in Houston, Texas (‘‘Company’’), and
the Company is wholly-owned by
Family Clients and is exclusively
controlled (directly or indirectly) by one
or more Family Members and/or Family
Entities in compliance with rule
202(a)(11)(G)-1 (‘‘Family Office Rule’’).
For purposes of the application, the
term ‘‘Duncan Family’’ means the lineal
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descendants of Dan L. Duncan, their
spouses, and all of the persons and
entities that qualify as Family Clients as
defined in paragraph (d)(4) of the
Family Office Rule. Capitalized terms
have the same meaning as defined in the
Family Office Rule.
2. Applicant provides both advisory
and non-advisory services (collectively,
the ‘‘Services’’). Any Service provided
by the Applicant that relates to
investment advice about securities or
may otherwise be construed as advisory
in nature is considered an ‘‘Advisory
Service.’’
3. Applicant represents that: (i) Other
than the exception discussed in
representation 4 below, each of the
persons served by the Applicant is a
Family Client, i.e., Applicant has no
clients other than Family Clients as
required by paragraph (b)(1) of the
Family Office Rule, (ii) Applicant is a
division of the Company, which is
owned and controlled in a manner that
complies in all respects with paragraph
(b)(2) of the Family Office Rule, and (iii)
Applicant does not hold itself out to the
public as an investment adviser as
required by paragraph (b)(3) of the
Family Office Rule. At the time of the
application, Applicant represents that
Family Members account for
approximately 75 percent of the natural
persons to whom the Applicant
provides Advisory Services.
4. Applicant provides Services to the
mother of a spouse of a lineal
descendant of Dan L. Duncan (‘‘Motherin-Law’’), as well as certain related
foundations (collectively, the
‘‘Additional Family Client’’). Applicant
represents that if the Mother-in-Law
were a Family Client, the related
foundations would meet the
requirements of (d)(4)(v) of the Family
Office Rule.
5. The Additional Family Client does
not have an ownership interest in the
Company. Applicant represents that the
assets beneficially owned by Family
Members and/or Family Entities
(excluding the Additional Family
Client’s Family Entities) make up at
least 75 percent of the total assets for
which the Applicant provides Advisory
Services.
6. Applicant represents that the
Additional Family Client has important
familial ties to and is an integral part of
the Duncan Family. Applicant
maintains that including the Additional
Family Client in the ‘‘family’’ simply
recognizes and memorializes the
familial ties and intra-familial
relationships that already exist, and
have existed for at least 16 years while
the assets of the Additional Family
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Jkt 232001
Client were managed by the Duncan
Family.
Applicant’s Legal Analysis
1. Section 202(a)(11) of the Advisers
Act defines the term ‘‘investment
adviser’’ to mean ‘‘any person who, for
compensation, engages in the business
of advising others, either directly or
through publications or writings, as to
the value of securities or as to the
advisability of investing in, purchasing,
or selling securities, or who, for
compensation and as a part of a regular
business, issues or promulgates analyses
or reports concerning securities . . . . ’’
2. Applicant falls within the
definition of an investment adviser
under section 202(a)(11). The Family
Office Rule provides an exclusion from
the definition of investment adviser for
which the Applicant would be eligible
but for the provision of Services to the
Additional Family Client. Section 203(a)
of the Advisers Act requires investment
advisers to register with the
Commission. Because the Applicant has
regulatory assets under management of
more than $100 million, it is not
prohibited from registering with the
Commission under section 203A(a) of
the Advisers Act. Therefore, absent
relief, Applicant would be required to
register under section 203(a) of the
Advisers Act.
3. Applicant submits that its
relationship with the Additional Family
Client does not change the nature of the
office into that of a commercial advisory
firm. In support of this argument,
Applicant notes that if the Mother-inLaw were the mother of a lineal
descendent of Dan L. Duncan, rather
than the mother of a spouse of a lineal
descendent, there would be no question
that each of the persons presently being
served by the office would be a Family
Member, and that the related
foundations would meet the
requirements of paragraph (d)(4)(v) of
the Family Office Rule pertaining to
charitable foundations. Applicant states
that in requesting the order, the office is
not attempting to expand its operations
or engage in any level of commercial
activity to which the Advisers Act is
designed to apply. Indeed, although the
Mother-in-Law does not fall within the
definition of Family Member, she is
considered to be, and is treated as, a
member of the Duncan Family, and the
number of natural persons who are not
Family Members as a percentage of the
total natural persons to whom the office
would provide Advisory Services if
relief were granted would be only
approximately 25 percent. Applicant
maintains that, from the perspective of
the Duncan Family, Applicant seeks to
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continue providing Advisory Services
exclusively to members of a single
family.
4. Applicant also submits that there is
no public interest in requiring the
Applicant to be registered under the
Advisers Act. Applicant states that the
office is a private organization that was
formed to be the ‘‘family office’’ for the
Duncan Family, and that the office does
not have any public clients. Applicant
maintains that the office’s Advisory
Services are tailored exclusively to the
needs of the Duncan Family and the
Additional Family Client. Applicant
argues that the presence of the
Additional Family Client, who has been
receiving Advisory Services from the
office for 16 years, does not create any
public interest that would require the
office to be registered under the
Advisers Act that is different in any
manner than the considerations that
apply to a ‘‘family office’’ that complies
in all respects with the Family Office
Rule.
5. Applicant argues that, although the
Family Office Rule largely codified the
exemptive orders that the Commission
had previously issued before the
enactment of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act, the Commission recognized in
proposing the rule that the exact
representations, conditions, or terms
contained in every exemptive order
could not be captured in a rule of
general applicability. The Commission
noted that family offices would remain
free to seek a Commission exemptive
order to advise an individual or entity
that did not meet the proposed family
client definition, and that certain
situations may raise unique conflicts
and issues that are more appropriately
addressed through an exemptive order
process where the Commission can
consider the specific facts and
circumstances, than through a rule of
general applicability. Applicant
maintains that its unusual
circumstances—providing Services to
Family Clients and to an Additional
Family Client for the past 16 years—
have not changed the nature of the
office’s operations into that of a
commercial advisory business, and that
an exemptive order is appropriate based
on the Applicant’s specific facts and
circumstances.
6. For the foregoing reasons,
Applicant requests an order declaring it
to be a person not within the intent of
section 202(a)(11) of the Advisers Act.
Applicant submits that the order is
necessary and appropriate, in the public
interest, consistent with the protection
of investors, and consistent with the
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purposes fairly intended by the policy
and provisions of the Advisers Act.
Applicant’s Conditions
1. The Applicant will offer and
provide Advisory Services only to
Family Clients and to the Additional
Family Client, who will generally be
deemed to be, and treated as if she and
certain related foundations were, a
Family Client; provided, however, that
the Additional Family Client will be
deemed to be, and treated as if she were,
a Family Member for purposes of
paragraph (b)(1) and for purposes of
paragraph (d)(4)(vi) of the Family Office
Rule.
2. The Company will at all times be
wholly-owned by Family Clients and
exclusively controlled (directly or
indirectly) by one or more Family
Members and/or Family Entities
(excluding the Additional Family
Client’s Family Entities) as defined in
paragraph (d)(5) of the Family Office
Rule.
3. At all times the assets beneficially
owned by Family Members and/or
Family Entities (excluding the
Additional Family Client’s Family
Entities) will account for at least 75
percent of the assets for which
Applicant provides Advisory Services.
4. Applicant will comply with all the
terms for exclusion from the definition
of investment adviser under the
Advisers Act set forth in the Family
Office Rule except for the limited
exception requested by this application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014–15796 Filed 7–3–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–31140; 812–14327]
BNP Paribas S.A., et al.; Notice of
Application and Temporary Order
June 30, 2014.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Temporary order and notice of
application for a permanent order under
section 9(c) of the Investment Company
Act of 1940 (‘‘Act’’).
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AGENCY:
Applicants have received a
temporary order exempting them from
section 9(a) of the Act, with respect to
guilty pleas entered on June 30, 2014 or
shortly thereafter, by BNP Paribas S.A.
SUMMARY:
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15:59 Jul 03, 2014
Jkt 232001
(‘‘BNPP’’) in the U.S. District Court for
the Southern District of New York
(‘‘District Court’’) in connection with a
plea agreement between BNPP and the
U.S. Department of Justice and the
Office of the U.S. Attorney for the
Southern District of New York (together
with the Department of Justice, the
‘‘DOJ’’), and in the Supreme Court of the
State of New York, County of New York
(‘‘NY Supreme Court’’), in connection
with a plea agreement between BNPP
and the New York County District
Attorney’s Office (‘‘DANY’’), until the
Commission takes final action on an
application for a permanent order.
Applicants have also applied for a
permanent order.
Applicants: Fischer Francis Trees &
Watts, Inc. (‘‘FFTW’’), Bishop Street
Capital Management Corp. (‘‘BSCM’’),
Impax Asset Management Ltd. (‘‘IAM’’),
and BNPP (each an ‘‘Applicant’’ and
collectively, the ‘‘Applicants’’).1
Filing Date: The application was filed
on June 30, 2014. 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
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 July 25, 2014, and
should be accompanied by proof of
service on 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: Betty Whelchel, BNP
Paribas S.A., 787 Seventh Avenue, New
York, NY 10019, with a copy to Donald
R. Crawshaw and Wendy M. Goldberg,
Sullivan & Cromwell LLP, 125 Broad
Street, New York, NY 10004.
FOR FURTHER INFORMATION CONTACT:
Kieran G. Brown, Senior Counsel, at
(202) 551–6773 or Daniele Marchesani,
1 Applicants request that any relief granted
pursuant to the application also apply to any
existing or future company of which BNPP is or
may become an affiliated person within the
meaning of section 2(a)(3) of the Act (together with
the Applicants, the ‘‘Covered Persons’’) with
respect to any activity contemplated by section 9(a)
of the Act.
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38341
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a temporary order and 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. BNPP is organized under the laws
of France as a credit institution and is
a major global bank active in seventyfive countries with key positions in its
three main areas of activity: retail
banking, investment solutions and
corporate and investment banking.
FFTW and BSCM are each indirect
wholly-owned subsidiaries of BNPP.
IAM is a subsidiary of a company listed
on the Alternative Investment Market of
the London Stock Exchange and BNPP
indirectly owns 25.22% of such
company’s shares. FFTW, a corporation
formed under the laws of New York,
BSCM, a corporation formed under the
laws of Hawaii, and IAM, a limited
liability company formed under the
laws of the United Kingdom, are each
registered as an investment adviser
under the Investment Advisers Act of
1940. FFTW, BSCM and IAM serve as
investment adviser (as defined in
section 2(a)(20) of the Act) to
investment companies registered under
the Act or series of such companies
(‘‘Funds’’) (such activities, ‘‘Fund
Service Activities’’).
2. On June 30, 2014, the DOJ filed a
notice of intent to file a one-count
criminal information in the District
Court and the DANY filed a two-count
criminal information in the NY
Supreme Court, respectively against
BNPP. The DOJ’s information, which
was filed on July 1, 2014, charged BNPP
with conspiracy to commit an offense
against the United States in violation of
Title 18, United States Code, Section
371, by conspiring to violate the
International Emergency Economic
Powers Act (‘‘IEEPA’’), codified at Title
50, United States Code, Section 1701 et
seq., and regulations issued thereunder,
and the Trading with the Enemy Act
(‘‘TWEA’’), codified at Title 50, United
States Code Appendix, Section 1 et seq.,
and regulations issued thereunder.
DANY’s information charged BNPP with
the crime of falsifying business records
in the first degree, in violation of Penal
Law § 175.10, and conspiracy in the
fifth degree, in violation of Penal Law
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]]>Agencies
[Federal Register Volume 79, Number 129 (Monday, July 7, 2014)]
[Notices]
[Pages 38339-38341]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15796]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IA-3867/803-00212]
Duncan Family Office; Notice of Application
July 1, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an exemptive order under section
202(a)(11)(H) of the Investment Advisers Act of 1940 (``Advisers
Act'').
-----------------------------------------------------------------------
Applicant: Duncan Family Office (``Applicant'').
Relevant Advisers Act Sections: Exemption requested under section
202(a)(11)(H) of the Advisers Act from section 202(a)(11) of the
Advisers Act.
Summary of Application: Applicant requests that the Commission
issue an order declaring it to be a person not within the intent of
section 202(a)(11) of the Advisers Act, which defines the term
``investment adviser.''
DATES: Filing Dates: The application was filed on March 27, 2012, and
amended on March 4, 2014, and April 22, 2014.
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 July 28, 2014 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 may request notification of a hearing by writing to
the Commission's Secretary.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549. Applicant, Duncan Family Office, c/o Martin
E. Lybecker, Perkins Coie LLP, Suite 600, 700 Thirteenth Street NW.,
Washington, DC 20005.
FOR FURTHER INFORMATION CONTACT: Vanessa M. Meeks, Senior Counsel, at
(202) 551-6806 or Melissa R. Harke, Branch Chief, at (202) 551-6722
(Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
SEC's Public Reference Branch, 100 F Street NE., Washington, DC 20549-
0102 (telephone (202) 551-5850).
Applicant's Representations
1. Applicant is a multi-generational single-family office that
provides services to the family and descendants of Dan L. Duncan.
Applicant is a division of Enterprise Products Company, an energy
company located in Houston, Texas (``Company''), and the Company is
wholly-owned by Family Clients and is exclusively controlled (directly
or indirectly) by one or more Family Members and/or Family Entities in
compliance with rule 202(a)(11)(G)-1 (``Family Office Rule''). For
purposes of the application, the term ``Duncan Family'' means the
lineal
[[Page 38340]]
descendants of Dan L. Duncan, their spouses, and all of the persons and
entities that qualify as Family Clients as defined in paragraph (d)(4)
of the Family Office Rule. Capitalized terms have the same meaning as
defined in the Family Office Rule.
2. Applicant provides both advisory and non-advisory services
(collectively, the ``Services''). Any Service provided by the Applicant
that relates to investment advice about securities or may otherwise be
construed as advisory in nature is considered an ``Advisory Service.''
3. Applicant represents that: (i) Other than the exception
discussed in representation 4 below, each of the persons served by the
Applicant is a Family Client, i.e., Applicant has no clients other than
Family Clients as required by paragraph (b)(1) of the Family Office
Rule, (ii) Applicant is a division of the Company, which is owned and
controlled in a manner that complies in all respects with paragraph
(b)(2) of the Family Office Rule, and (iii) Applicant does not hold
itself out to the public as an investment adviser as required by
paragraph (b)(3) of the Family Office Rule. At the time of the
application, Applicant represents that Family Members account for
approximately 75 percent of the natural persons to whom the Applicant
provides Advisory Services.
4. Applicant provides Services to the mother of a spouse of a
lineal descendant of Dan L. Duncan (``Mother-in-Law''), as well as
certain related foundations (collectively, the ``Additional Family
Client''). Applicant represents that if the Mother-in-Law were a Family
Client, the related foundations would meet the requirements of
(d)(4)(v) of the Family Office Rule.
5. The Additional Family Client does not have an ownership interest
in the Company. Applicant represents that the assets beneficially owned
by Family Members and/or Family Entities (excluding the Additional
Family Client's Family Entities) make up at least 75 percent of the
total assets for which the Applicant provides Advisory Services.
6. Applicant represents that the Additional Family Client has
important familial ties to and is an integral part of the Duncan
Family. Applicant maintains that including the Additional Family Client
in the ``family'' simply recognizes and memorializes the familial ties
and intra-familial relationships that already exist, and have existed
for at least 16 years while the assets of the Additional Family Client
were managed by the Duncan Family.
Applicant's Legal Analysis
1. Section 202(a)(11) of the Advisers Act defines the term
``investment adviser'' to mean ``any person who, for compensation,
engages in the business of advising others, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or
who, for compensation and as a part of a regular business, issues or
promulgates analyses or reports concerning securities . . . . ''
2. Applicant falls within the definition of an investment adviser
under section 202(a)(11). The Family Office Rule provides an exclusion
from the definition of investment adviser for which the Applicant would
be eligible but for the provision of Services to the Additional Family
Client. Section 203(a) of the Advisers Act requires investment advisers
to register with the Commission. Because the Applicant has regulatory
assets under management of more than $100 million, it is not prohibited
from registering with the Commission under section 203A(a) of the
Advisers Act. Therefore, absent relief, Applicant would be required to
register under section 203(a) of the Advisers Act.
3. Applicant submits that its relationship with the Additional
Family Client does not change the nature of the office into that of a
commercial advisory firm. In support of this argument, Applicant notes
that if the Mother-in-Law were the mother of a lineal descendent of Dan
L. Duncan, rather than the mother of a spouse of a lineal descendent,
there would be no question that each of the persons presently being
served by the office would be a Family Member, and that the related
foundations would meet the requirements of paragraph (d)(4)(v) of the
Family Office Rule pertaining to charitable foundations. Applicant
states that in requesting the order, the office is not attempting to
expand its operations or engage in any level of commercial activity to
which the Advisers Act is designed to apply. Indeed, although the
Mother-in-Law does not fall within the definition of Family Member, she
is considered to be, and is treated as, a member of the Duncan Family,
and the number of natural persons who are not Family Members as a
percentage of the total natural persons to whom the office would
provide Advisory Services if relief were granted would be only
approximately 25 percent. Applicant maintains that, from the
perspective of the Duncan Family, Applicant seeks to continue providing
Advisory Services exclusively to members of a single family.
4. Applicant also submits that there is no public interest in
requiring the Applicant to be registered under the Advisers Act.
Applicant states that the office is a private organization that was
formed to be the ``family office'' for the Duncan Family, and that the
office does not have any public clients. Applicant maintains that the
office's Advisory Services are tailored exclusively to the needs of the
Duncan Family and the Additional Family Client. Applicant argues that
the presence of the Additional Family Client, who has been receiving
Advisory Services from the office for 16 years, does not create any
public interest that would require the office to be registered under
the Advisers Act that is different in any manner than the
considerations that apply to a ``family office'' that complies in all
respects with the Family Office Rule.
5. Applicant argues that, although the Family Office Rule largely
codified the exemptive orders that the Commission had previously issued
before the enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, the Commission recognized in proposing the rule that
the exact representations, conditions, or terms contained in every
exemptive order could not be captured in a rule of general
applicability. The Commission noted that family offices would remain
free to seek a Commission exemptive order to advise an individual or
entity that did not meet the proposed family client definition, and
that certain situations may raise unique conflicts and issues that are
more appropriately addressed through an exemptive order process where
the Commission can consider the specific facts and circumstances, than
through a rule of general applicability. Applicant maintains that its
unusual circumstances--providing Services to Family Clients and to an
Additional Family Client for the past 16 years--have not changed the
nature of the office's operations into that of a commercial advisory
business, and that an exemptive order is appropriate based on the
Applicant's specific facts and circumstances.
6. For the foregoing reasons, Applicant requests an order declaring
it to be a person not within the intent of section 202(a)(11) of the
Advisers Act. Applicant submits that the order is necessary and
appropriate, in the public interest, consistent with the protection of
investors, and consistent with the
[[Page 38341]]
purposes fairly intended by the policy and provisions of the Advisers
Act.
Applicant's Conditions
1. The Applicant will offer and provide Advisory Services only to
Family Clients and to the Additional Family Client, who will generally
be deemed to be, and treated as if she and certain related foundations
were, a Family Client; provided, however, that the Additional Family
Client will be deemed to be, and treated as if she were, a Family
Member for purposes of paragraph (b)(1) and for purposes of paragraph
(d)(4)(vi) of the Family Office Rule.
2. The Company will at all times be wholly-owned by Family Clients
and exclusively controlled (directly or indirectly) by one or more
Family Members and/or Family Entities (excluding the Additional Family
Client's Family Entities) as defined in paragraph (d)(5) of the Family
Office Rule.
3. At all times the assets beneficially owned by Family Members
and/or Family Entities (excluding the Additional Family Client's Family
Entities) will account for at least 75 percent of the assets for which
Applicant provides Advisory Services.
4. Applicant will comply with all the terms for exclusion from the
definition of investment adviser under the Advisers Act set forth in
the Family Office Rule except for the limited exception requested by
this application.
For the Commission, by the Division of Investment Management,
under delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-15796 Filed 7-3-14; 8:45 am]
BILLING CODE 8011-01-P
