Stellus Capital Investment Corporation, et al.;, 42846-42847 [2014-17267]
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Federal Register / Vol. 79, No. 141 / Wednesday, July 23, 2014 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31160; 812–14249]
Stellus Capital Investment
Corporation, et al.; Notice of
Application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Applicants’ Representations
1. The Company, a Maryland
corporation, is an externally managed,
AGENCY: Securities and Exchange
non-diversified, closed-end
Commission (‘‘Commission’’).
management investment company that
ACTION: Notice of an application for an
has elected to be regulated as a business
order under section 6(c) of the
development company (‘‘BDC’’) under
Investment Company Act of 1940 (the
the Act.1 The Company’s investment
‘‘Act’’) for an exemption from sections
objective is to maximize total return to
18(a) and 61(a) of the Act.
its stockholders in the form of current
income and capital appreciation by
Applicants: Stellus Capital
primarily investing in private middleInvestment Corporation (the
market companies (typically with $5
‘‘Company’’), Stellus Capital
million to $50 million of earnings before
Management, LLC (the ‘‘Investment
interest, taxes, depreciation and
Adviser’’), Stellus Capital SBIC GP, LLC amortization) through first lien, second
(the ‘‘General Partner’’), and Stellus
lien, unitranche and mezzanine debt
Capital SBIC LP (‘‘Stellus SBIC’’).
financing and corresponding equity
SUMMARY: Summary of the Application:
investments. The Investment Adviser, a
The Company requests an order to
Delaware limited liability company, is
permit it to adhere to a modified asset
the investment adviser to the Company.
coverage requirement.
The Investment Adviser is registered
DATES: Filing Dates: The application was under the Investment Advisers Act of
filed December 12, 2013, and amended
1940.
on April 2, 2014 and July 9, 2014.
2. Stellus SBIC, a Delaware limited
Hearing or Notification of Hearing: An
partnership, is a small business
order granting the application will be
investment company (‘‘SBIC’’) licensed
issued unless the Commission orders a
by the Small Business Administration
hearing. Interested persons may request
(‘‘SBA’’) under the Small Business
a hearing by writing to the
Investment Act of 1958 (‘‘SBIA’’).
Commission’s Secretary and serving
Stellus SBIC is excluded from the
applicants with a copy of the request,
definition of investment company by
personally or by mail. Hearing requests
section 3(c)(7) of the Act. The Company
should be received by the Commission
currently owns a 99 percent limited
by 5:30 p.m. on August 11, 2014 and
partnership interest in Stellus SBIC. The
should be accompanied by proof of
General Partner, a Delaware limited
service on the Applicants, in the form
liability company, is the general partner
of an affidavit or, for lawyers, a
of Stellus SBIC. The General Partner
certificate of service. Hearing requests
owns 1 percent of Stellus SBIC in the
should state the nature of the writer’s
form of a general partnership interest.
interest, the reason for the request, and
Applicants’ Legal Analysis
the issues contested. Persons who wish
to be notified of a hearing may request
1. The Company requests an
notification by writing to the
exemption pursuant to section 6(c) of
Commission’s Secretary.
the Act from the provisions of sections
ADDRESSES: Secretary, U.S. Securities
18(a) and 61(a) of the Act to permit it
and Exchange Commission, 100 F Street to adhere to a modified asset coverage
NE., Washington, DC 20549–1090.
requirement with respect to any direct
Applicants: Robert T. Ladd, Stellus
or indirect wholly-owned subsidiary of
Capital Investment Corporation, 4400
the Company that is licensed by the
Post Oak Parkway, Suite 2200, Houston, SBA to operate under the SBIA as a
Texas 77027.
SBIC and relies on section 3(c)(7) for an
FOR FURTHER INFORMATION CONTACT:
exemption from the definition of
Aaron T. Gilbride, Attorney-Adviser, at
‘‘investment company’’ under the 1940
(202) 551–6906, or Melissa R. Harke,
Branch Chief, at (202) 551–6722
1 Section 2(a)(48) defines a BDC to be any closed(Division of Investment Management,
end investment company that operates for the
purpose of making investments in securities
Chief Counsel’s Office).
described in section 55(a)(1) through 55(a)(3) of the
SUPPLEMENTARY INFORMATION: The
Act and makes available significant managerial
following is a summary of the
assistance with respect to the issuers of such
securities.
application. The complete application
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July 17, 2014.
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Act (each, a ‘‘SBIC Subsidiary’’).2
Applicants state that companies
operating under the SBIA, such as the
SBIC Subsidiary, will be subject to the
SBA’s substantial regulation of
permissible leverage in their capital
structure.
2. Section 18(a) of the Act prohibits a
registered closed-end investment
company from issuing any class of
senior security or selling any such
security of which it is the issuer unless
the company complies with the asset
coverage requirements set forth in that
section. Section 61(a) of the Act makes
section 18 applicable to BDCs, with
certain modifications. Section 18(k)
exempts an investment company
operating as an SBIC from the asset
coverage requirements for senior
securities representing indebtedness
that are contained in section 18(a)(1)(A)
and (B).
3. Applicants state that the Company
may be required to comply with the
asset coverage requirements of section
18(a) (as modified by section 61(a)) on
a consolidated basis because the
Company may be deemed to be an
indirect issuer of any class of senior
security issued by Stellus SBIC or
another SBIC Subsidiary. Applicants
state that applying section 18(a) (as
modified by section 61(a)) on a
consolidated basis generally would
require that the Company treat as its
own all assets and any liabilities held
directly either by itself, by Stellus SBIC,
or by another SBIC Subsidiary.
Accordingly, the Company requests an
order under section 6(c) of the Act
exempting the Company from the
provisions of section 18(a) (as modified
by section 61(a)), such that senior
securities issued by each SBIC
Subsidiary that would be excluded from
the SBIC Subsidiary’s asset coverage
ratio by section 18(k) if it were itself a
BDC would also be excluded from the
Company’s consolidated asset coverage
ratio.
4. Section 6(c) of the Act, in relevant
part, permits the Commission to exempt
any transaction or class of transactions
from any provision of the Act if and to
the extent that 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 satisfies the
section 6(c) standard. Applicants
contend that, because the SBIC
2 All existing entities that currently intend to rely
on the order are named as applicants. Any other
existing or future entity that may rely on the order
in the future will comply with the terms and
condition of the order.
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Federal Register / Vol. 79, No. 141 / Wednesday, July 23, 2014 / Notices
Subsidiary would be entitled to rely on
section 18(k) if it were a BDC itself,
there is no policy reason to deny the
benefit of that exemption to the
Company.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
The Company shall not issue or sell
any senior security, and the Company
shall not cause or permit Stellus SBIC
or any other SBIC Subsidiary to issue or
sell any senior security of which the
Company, Stellus SBIC or any other
SBIC Subsidiary is the issuer except to
the extent permitted by section 18 (as
modified for BDCs by section 61) of the
Act; provided that, immediately after
the issuance or sale by any of the
Company, Stellus SBIC or any other
SBIC Subsidiary of any such senior
security, the Company, individually and
on a consolidated basis, shall have the
asset coverage required by section 18(a)
of the Act (as modified by section 61(a)).
In determining whether the Company
has the asset coverage on a consolidated
basis required by section 18(a) of the
Act (as modified by section 61(a)), any
senior securities representing
indebtedness of an SBIC Subsidiary if
that SBIC Subsidiary has issued
indebtedness that is held or guaranteed
by the SBA shall not be considered
senior securities and, for purposes of the
definition of ‘‘asset coverage’’ in section
18(h), shall be treated as indebtedness
not represented by senior securities.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–17267 Filed 7–22–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31161; 812–14253]
FundVantage Trust, et al.; Notice of
Application
July 17, 2014.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 12(d)(1)(J) of the
Investment Company Act of 1940 (the
‘‘Act’’) for exemption from sections
12(d)(1)(A) and (B) of the Act, and
under sections 6(c) and 17(b) of the Act
for an exemption from section 17(a) of
the Act.
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AGENCY:
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SUMMARY:
Summary of the Application: The
order would permit certain open-end
management investment companies
registered under the Act to acquire
shares of certain open-end management
investment companies registered under
the Act that are outside of the same
group of investment companies as the
acquiring investment companies.
Applicants: FundVantage Trust (the
‘‘Trust’’), Gotham Asset Management,
LLC (the ‘‘Adviser’’), and Foreside
Funds Distributor, LLC (the
‘‘Distributor’’).
DATES: Filing Dates: The application was
filed on December 16, 2013, and
amended on April 25, 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
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 August 11, 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, Attn: John M. Ford, Esq.,
Pepper Hamilton LLP, 3000 Two Logan
Square, Philadelphia, PA 19103.
FOR FURTHER INFORMATION CONTACT:
Michael S. Didiuk, Senior Counsel, at
(202) 551–6839, or Holly Hunter-Ceci,
Branch Chief, at (202) 551–6869
(Division of Investment Management,
Chief Counsel’s Office).
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 for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm, or by
calling (202) 551–8090.
Applicants’ Representations
1. The Trust is organized as a
Delaware statutory trust and is
registered as an open-end management
investment company under the Act. The
Trust is comprised of separate series
(each a ‘‘Fund’’ and collectively, the
‘‘Funds’’). The Adviser is registered as
PO 00000
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42847
an investment adviser under the
Investment Advisers Act of 1940
(‘‘Advisers Act’’) and serves as
investment adviser for three of the
Funds. The Distributor is registered as a
broker-dealer under the Securities
Exchange Act of 1934 (the ‘‘Exchange
Act’’) and serves as the Funds’ principal
underwriter and distributor. Both the
Adviser and the Distributor are
Delaware limited liability companies.
2. Applicants request an order to
permit (a) registered open-end
management investment companies (the
‘‘Investing Funds’’) that are not part of
the same ‘‘group of investment
companies,’’ within the meaning of
section 12(d)(1)(G)(ii) of the Act, as the
Trust, to acquire shares of the Funds in
excess of the limits in section
12(d)(1)(A) of the Act, and (b) the
Funds, any principal underwriter for a
Fund, and any broker or dealer
registered under the Exchange Act
(‘‘Broker’’) to sell shares of the Funds to
the Investing Funds in excess of the
limits of section 12(d)(1)(B) of the Act.1
Applicants also request an order under
sections 6(c) and 17(b) of the Act to
exempt applicants from section 17(a) to
the extent necessary to permit a Fund to
sell its shares to and redeem its shares
from an Investing Fund.2
3. Each Investing Fund will be
advised by an ‘‘investment adviser,’’
within the meaning of section
2(a)(20)(A) of the Act, and such adviser
will be registered as an investment
adviser under the Advisers Act (each, an
‘‘Investing Fund Adviser’’). Some
Investing Funds may also be advised by
investment adviser(s) that meets the
definition of section 2(a)(20)(B) of the
Act (each, an ‘‘Investing Fund
Subadviser’’).
Applicants’ Legal Analysis
A. Section 12(d)(1)
1. Section 12(d)(1)(A) of the Act, in
relevant part, prohibits a registered
1 All entities that currently intend to rely on the
requested order are named as applicants. Any other
entity that relies on the order in the future will
comply with the terms and conditions of the
application. Certain of the Funds created in the
future may be registered under the Act as open-end
management investment companies and may have
received exemptive relief to permit their shares to
be listed and traded on a national securities
exchange at negotiated prices (‘‘ETFs’’).
2 Applicants request that the relief apply to: (1)
each registered open-end management investment
company or series thereof that currently or
subsequently is part of the same ‘‘group of
investment companies,’’ within the meaning of
section 12(d)(1)(G)(ii) of the Act, as the Trust and
is advised by the Adviser (included in the term
‘‘Funds’’); (2) each Investing Fund that enters into
a Participation Agreement (as defined below) with
a Fund to purchase shares of the Fund; and (3) any
principal underwriter to a Fund or Broker selling
shares of a Fund.
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]]>Agencies
[Federal Register Volume 79, Number 141 (Wednesday, July 23, 2014)]
[Notices]
[Pages 42846-42847]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17267]
[[Page 42846]]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 31160; 812-14249]
Stellus Capital Investment Corporation, et al.; Notice of
Application
July 17, 2014.
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 (the ``Act'') for an exemption from
sections 18(a) and 61(a) of the Act.
-----------------------------------------------------------------------
Applicants: Stellus Capital Investment Corporation (the
``Company''), Stellus Capital Management, LLC (the ``Investment
Adviser''), Stellus Capital SBIC GP, LLC (the ``General Partner''), and
Stellus Capital SBIC LP (``Stellus SBIC'').
SUMMARY: Summary of the Application: The Company requests an order to
permit it to adhere to a modified asset coverage requirement.
DATES: Filing Dates: The application was filed December 12, 2013, and
amended on April 2, 2014 and July 9, 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 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 August 11, 2014 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: Robert T. Ladd,
Stellus Capital Investment Corporation, 4400 Post Oak Parkway, Suite
2200, Houston, Texas 77027.
FOR FURTHER INFORMATION CONTACT: Aaron T. Gilbride, Attorney-Adviser,
at (202) 551-6906, 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 via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at https://www.sec.gov/search/search.htm or by calling (202) 551-8090.
Applicants' Representations
1. The Company, a Maryland corporation, is an externally managed,
non-diversified, closed-end management investment company that has
elected to be regulated as a business development company (``BDC'')
under the Act.\1\ The Company's investment objective is to maximize
total return to its stockholders in the form of current income and
capital appreciation by primarily investing in private middle-market
companies (typically with $5 million to $50 million of earnings before
interest, taxes, depreciation and amortization) through first lien,
second lien, unitranche and mezzanine debt financing and corresponding
equity investments. The Investment Adviser, a Delaware limited
liability company, is the investment adviser to the Company. The
Investment Adviser is registered under the Investment Advisers Act of
1940.
---------------------------------------------------------------------------
\1\ Section 2(a)(48) defines a BDC to be any closed-end
investment company that operates for the purpose of making
investments in securities described in section 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------
2. Stellus SBIC, a Delaware limited partnership, is a small
business investment company (``SBIC'') licensed by the Small Business
Administration (``SBA'') under the Small Business Investment Act of
1958 (``SBIA''). Stellus SBIC is excluded from the definition of
investment company by section 3(c)(7) of the Act. The Company currently
owns a 99 percent limited partnership interest in Stellus SBIC. The
General Partner, a Delaware limited liability company, is the general
partner of Stellus SBIC. The General Partner owns 1 percent of Stellus
SBIC in the form of a general partnership interest.
Applicants' Legal Analysis
1. The Company requests an exemption pursuant to section 6(c) of
the Act from the provisions of sections 18(a) and 61(a) of the Act to
permit it to adhere to a modified asset coverage requirement with
respect to any direct or indirect wholly-owned subsidiary of the
Company that is licensed by the SBA to operate under the SBIA as a SBIC
and relies on section 3(c)(7) for an exemption from the definition of
``investment company'' under the 1940 Act (each, a ``SBIC
Subsidiary'').\2\ Applicants state that companies operating under the
SBIA, such as the SBIC Subsidiary, will be subject to the SBA's
substantial regulation of permissible leverage in their capital
structure.
---------------------------------------------------------------------------
\2\ All existing entities that currently intend to rely on the
order are named as applicants. Any other existing or future entity
that may rely on the order in the future will comply with the terms
and condition of the order.
---------------------------------------------------------------------------
2. Section 18(a) of the Act prohibits a registered closed-end
investment company from issuing any class of senior security or selling
any such security of which it is the issuer unless the company complies
with the asset coverage requirements set forth in that section. Section
61(a) of the Act makes section 18 applicable to BDCs, with certain
modifications. Section 18(k) exempts an investment company operating as
an SBIC from the asset coverage requirements for senior securities
representing indebtedness that are contained in section 18(a)(1)(A) and
(B).
3. Applicants state that the Company may be required to comply with
the asset coverage requirements of section 18(a) (as modified by
section 61(a)) on a consolidated basis because the Company may be
deemed to be an indirect issuer of any class of senior security issued
by Stellus SBIC or another SBIC Subsidiary. Applicants state that
applying section 18(a) (as modified by section 61(a)) on a consolidated
basis generally would require that the Company treat as its own all
assets and any liabilities held directly either by itself, by Stellus
SBIC, or by another SBIC Subsidiary. Accordingly, the Company requests
an order under section 6(c) of the Act exempting the Company from the
provisions of section 18(a) (as modified by section 61(a)), such that
senior securities issued by each SBIC Subsidiary that would be excluded
from the SBIC Subsidiary's asset coverage ratio by section 18(k) if it
were itself a BDC would also be excluded from the Company's
consolidated asset coverage ratio.
4. Section 6(c) of the Act, in relevant part, permits the
Commission to exempt any transaction or class of transactions from any
provision of the Act if and to the extent that 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
satisfies the section 6(c) standard. Applicants contend that, because
the SBIC
[[Page 42847]]
Subsidiary would be entitled to rely on section 18(k) if it were a BDC
itself, there is no policy reason to deny the benefit of that exemption
to the Company.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition:
The Company shall not issue or sell any senior security, and the
Company shall not cause or permit Stellus SBIC or any other SBIC
Subsidiary to issue or sell any senior security of which the Company,
Stellus SBIC or any other SBIC Subsidiary is the issuer except to the
extent permitted by section 18 (as modified for BDCs by section 61) of
the Act; provided that, immediately after the issuance or sale by any
of the Company, Stellus SBIC or any other SBIC Subsidiary of any such
senior security, the Company, individually and on a consolidated basis,
shall have the asset coverage required by section 18(a) of the Act (as
modified by section 61(a)). In determining whether the Company has the
asset coverage on a consolidated basis required by section 18(a) of the
Act (as modified by section 61(a)), any senior securities representing
indebtedness of an SBIC Subsidiary if that SBIC Subsidiary has issued
indebtedness that is held or guaranteed by the SBA shall not be
considered senior securities and, for purposes of the definition of
``asset coverage'' in section 18(h), shall be treated as indebtedness
not represented by senior securities.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-17267 Filed 7-22-14; 8:45 am]
BILLING CODE 8011-01-P
