Self Storage Group, Inc.; Notice of Application, 80857-80859 [2015-32579]
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Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 22 and paragraph (f) of Rule
19b–4 thereunder.23 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
EDGA–2015–46 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–EDGA–2015–46. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
22 15
23 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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13:31 Dec 24, 2015
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGA–
2015–46, and should be submitted on or
before January 19, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Brent J. Fields,
Secretary.
[FR Doc. 2015–32539 Filed 12–24–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–31946; 811–8025]
Self Storage Group, Inc.; Notice of
Application
December 21, 2015.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for
deregistration under section 8(f) of the
Investment Company Act of 1940 (the
‘‘Act’’).
AGENCY:
Self Storage
Group, Inc. requests an order declaring
that it has ceased to be an investment
company.
APPLICANT: Self Storage Group, Inc.
FILING DATES: The application was filed
on March 28, 2014, and amended on
September 19, 2014, and September 25,
2015.
HEARING OR NOTIFICATION OF HEARING:
An order granting the request 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 January 15, 2016, and
should be accompanied by proof of
service on applicant, in the form of an
affidavit or, for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, 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.
SUMMARY OF APPLICATION:
24 17
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80857
The Commission: Secretary,
U.S. Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
Applicant: 11 Hanover Square, 12th
Floor, New York, NY 10005.
FOR FURTHER INFORMATION CONTACT:
Christine Y. Greenlees, Senior Counsel,
at (202) 551–6879, or David P. Bartels,
Branch Chief, at (202) 551–6821
(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.
ADDRESSES:
Applicant’s Representations
1. From 1983 through 1996, applicant
operated as a diversified series of shares
of Bull & Bear Incorporated, an openend management investment company.
Applicant became separately
incorporated under the laws of the State
of Maryland in December 1996 and
registered under the Act as a closed-end
management investment company in
January 1997. Applicant, formerly
known as Global Income Fund, Inc.,
changed its name to Self Storage Group,
Inc., effective November 2013.
2. On February 29, 2012, applicant’s
stockholders approved a proposal to
change the nature of applicant’s
business so as to cease to be an
investment company and to become an
operating company that would own,
operate, manage, acquire, develop and
redevelop professionally managed self
storage facilities and would seek to
qualify as a real estate investment trust
(‘‘REIT’’) for federal tax purposes (the
‘‘Business Proposal’’).1 Applicant states
that, for this purpose, ‘‘professionally
managed self storage facility’’ refers to a
type of real property that offers storage
space rental, generally on a month-tomonth basis, for personal or business
use. Applicant represents that it
manages and operates each of its self
1 The Business Proposal permits applicant to
invest in ‘‘real estate assets,’’ which according to
applicant the Internal Revenue Code defines to
include, in addition to real property, interests in
REITs, interests in mortgages on real property and
other investments in the real estate investment,
service and related industries. Applicant concedes
that some or all of these additional types of assets
may be considered investment securities within the
meaning of section 3(a)(2) of the Act. However,
applicant intends to invest primarily in real
property self storage facilities and represents that it
will limit its investments in other real estate assets
to avoid classification as an investment company
under the Act.
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storage facilities using its own
personnel and does not intend to retain
third party management for any of its
self storage facilities.
3. Applicant states that, following
stockholder approval, it has taken steps
to implement the Business Proposal. In
particular, on June 15, 2012, applicant’s
board of directors (the ‘‘Board’’)
approved the termination of applicant’s
management contract with an outside
investment adviser and applicant
became internally managed by its
officers and employees. In addition,
applicant’s management commenced
seeking acquisition opportunities in real
property self storage facilities.
Applicant states that those efforts have
resulted in its assets being concentrated
in several wholly owned subsidiaries,
all of which own and operate real
property self storage facilities.
Applicant represents that none of these
subsidiaries is an investment company
as defined in section 3(a) of the Act or
is relying on the exception from the
definition of investment company in
section 3(c)(1) or section 3(c)(7) of the
Act.
4. Applicant states that, as of
December 31, 2014, and June 30, 2015,
applicant’s wholly owned subsidiaries
represented approximately 81% and
82%, respectively, of its total assets
measured at fair value on an
unconsolidated basis (exclusive of
Government securities and cash items),
and each of applicant’s wholly owned
subsidiaries held at least 90% of its
assets in direct investments in real
property self storage facilities.
Applicant further states that, as of
December 31, 2014, and June 30, 2015,
its holdings of investment securities (as
defined in section 3(a) of the Act)
(‘‘Investment Securities’’) represented
approximately 9% and 10%,
respectively, and cash items represented
approximately 10% and 9% of its total
assets on an unconsolidated basis.
5. Applicant states that, for the six
months ended June 30, 2015, on a
consolidated basis, it derived
approximately 69% of its gross income
from its operation of self storage
facilities, approximately 29% from
realized gains from divestment of its
holdings of Investment Securities,
approximately 3% from dividends paid
by its holdings of Investment Securities,
and less than 1% from its cash items.2
Applicant anticipates currently that, for
fiscal 2015, on a consolidated basis, it
will derive approximately 75% of its
gross income from its operation of self
storage facilities, approximately 23%
2 Applicant states that none of its subsidiaries
derives any of its gross income from securities.
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from realized gains from divestment of
its holdings of Investment Securities,
approximately 2% from dividends paid
by its holdings of Investment Securities,
and less than 1% from its cash items. In
addition, applicant states that, for the
last four fiscal quarters combined, no
more than 45 percent of its consolidated
net income after taxes was derived from
securities (other than securities issued
by companies (i) that are wholly owned
by applicant, (ii) through which
applicant engages in a business other
than that of investing, reinvesting,
owning, holding or trading in securities
and (iii) that are not investment
companies).
6. Applicant expects to continue to
earn a majority of its gross income from
its self storage facility operations and
expects its income from Investment
Securities and a time deposit to
continue to decrease as it continues to
divest its holdings of Investment
Securities.
7. Applicant represents that, since
stockholders approved the Business
Proposal, it has consistently represented
to the public that it is primarily engaged
in the business of owning, operating,
managing, acquiring, developing, and
redeveloping professionally managed
self storage facilities. In addition,
applicant asserts that its president and
other officers spend substantially all of
the time that they devote to applicant’s
business on (a) overseeing and guiding
the management of its wholly owned
subsidiaries’ self storage facilities and
(b) conducting strategic review of
applicant’s lines of business in order to
determine if these units are
appropriately structured to implement
applicant’s objectives. Applicant states
that its president and other officers
spend no time engaged in investing and
reinvesting applicant’s assets in
Investment Securities other than to
continue to divest applicant’s holdings
of Investment Securities. Likewise,
applicant asserts that its Board has
shifted its focus from oversight of a
company engaged in the business of
investing and reinvesting in securities to
oversight of a company engaged in the
business of owning and operating real
property self storage facilities.
8. Applicant states that it is not
currently a party to any litigation or
administrative proceeding and has
timely complied with its obligations to
file annual and other reports with the
Commission.
9. Applicant represents that, if the
requested order is granted, it will seek
to list its common stock on NASDAQ
and will be subject to the reporting and
other requirements of the Exchange Act.
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Applicant’s Legal Analysis
1. Section 8(f) of the Act provides that
whenever the Commission, upon
application or its own motion, finds that
a registered investment company has
ceased to be an investment company,
the Commission shall so declare by
order and upon the taking effect of such
order, the registration of such company
shall cease to be in effect.
2. Section 3(a)(1)(A) of the Act defines
an ‘‘investment company’’ as any issuer
that ‘‘is or holds itself out as being
engaged primarily, or proposes to
engage primarily, in the business of
investing, reinvesting, or trading in
securities.’’ Section 3(a)(1)(C) of the Act
defines an ‘‘investment company’’ as
any issuer that ‘‘is engaged or proposes
to engage in the business of investing,
reinvesting, owning, holding, or trading
in securities, and owns or proposes to
acquire investment securities having a
value exceeding 40 per centum of the
value of such issuer’s total assets
(exclusive of Government securities and
cash items) on an unconsolidated
basis.’’ 3
3. Section 3(b)(1) of the Act provides
that ‘‘[n]otwithstanding paragraph (1)(C)
of subsection (a), none of the following
persons is an investment company
within the meaning of this title: (1) Any
issuer primarily engaged, directly or
through a wholly owned subsidiary or
subsidiaries, in a business or businesses
other than that of investing, reinvesting,
owning, holding, or trading in
securities.’’ Rule 3a–1 under the Act
states that ‘‘[n]otwithstanding section
3(a)(1)(C) of the Act, an issuer will be
deemed not to be an investment
company under the Act, provided, that:
(a) no more than 45 percent of the value
(as defined in section 2(a)(41) of the
Act) of such issuer’s total assets
(exclusive of Government securities and
cash items) consists of, and no more
than 45 percent of such issuer’s net
income after taxes (for the last four
fiscal quarters combined) is derived
from, securities other than: (1)
Government securities; (2) securities
issued by employees’ securities
companies; (3) securities issued by
majority-owned subsidiaries of the
issuer (other than subsidiaries relying
on the exclusion from the definition of
investment company in section 3(b)(3)
or (c)(1) of the Act) which are not
3 Section 3(a)(2) of the Act defines ‘‘investment
securities’’ as ‘‘all securities except (A) Government
securities, (B) securities issued by employees’
securities companies, and (C) securities issued by
majority-owned subsidiaries of the owner which (i)
are not investment companies, and (ii) are not
relying on the exception from the definition of
investment company in paragraph (1) or (7) of
subsection (c).’’
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Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices
investment companies; and (4)
securities issued by companies: (i)
which are controlled primarily by such
issuer; (ii) through which such issuer
engages in a business other than that of
investing, reinvesting, owning, holding
or trading in securities; and (iii) which
are not investment companies; (b) the
issuer is not an investment company as
defined in section 3(a)(1)(A) or
3(a)(1)(B) of the Act and is not a special
situation investment company; and (c)
the percentages described in paragraph
(a) of this section are determined on an
unconsolidated basis, except that the
issuer shall consolidate its financial
statements with the financial statements
of any wholly-owned subsidiaries.’’
4. Applicant states that it is no longer
an investment company as defined in
section 3(a)(1)(A) or section 3(a)(1)(C).
As noted above, applicant states that, for
the last four fiscal quarters combined,
no more than 45 percent of its
consolidated net income after taxes was
derived from securities (other than
securities issued by companies (i) that
are wholly owned by applicant, (ii)
through which applicant engages in a
business other than that of investing,
reinvesting, owning, holding or trading
in securities and (iii) that are not
investment companies). Applicant
asserts that it is primarily engaged in the
business of owning, operating,
managing, acquiring, developing, and
redeveloping professionally managed
self storage facilities through its wholly
owned subsidiaries. Applicant argues
that its historical development, its
public representations, the activities of
its directors and officers, the nature of
its present assets and the sources of its
present income support this assertion.
Applicant states that it is thus qualified
for an order of the Commission pursuant
to section 8(f) of the Act.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015–32579 Filed 12–24–15; 8:45 am]
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BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76719; File No. SR–
NYSEArca–2015–73]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of
Amendment Nos. 3, 4, 5, and 6 and
Order Granting Accelerated Approval
of a Proposed Rule Change, as
Modified by Amendment Nos. 1, 3, 4,
5 and 6, To List and Trade of Shares
of the Guggenheim Total Return Bond
ETF Under NYSE Arca Equities Rule
8.600
December 21, 2015.
I. Introduction
On September 1, 2015, NYSE Arca,
Inc. (‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to list and trade shares
(‘‘Shares’’) of the Guggenheim Total
Return Bond ETF (‘‘Fund’’) under NYSE
Arca Equities Rule 8.600. On September
15, 2015, the Exchange filed
Amendment No. 1 to the proposed rule
change.3 The Commission published
notice of the proposed rule change, as
modified by Amendment No. 1 thereto,
in the Federal Register on September
22, 2015.4 On September 22, 2015, the
Exchange submitted Amendment No. 3
to the proposed rule change.5 On
November 5, 2015, pursuant to Section
19(b)(2) of the Act,6 the Commission
designated a longer period within which
to either approve the proposed rule
change, disapprove the proposed rule
change, or institute proceedings to
determine whether to disapprove the
proposed rule change.7 On November
23, 2015, December 14, 2015, and
December 16, 2015, the Exchange
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1 to the proposed rule change
replaced and superseded the original filing in its
entirety.
4 See Securities Exchange Act Release No. 75930
(September 16, 2015), 80 FR 57251 (‘‘Notice’’).
5 On September 21, 2015, the Exchange submitted
and withdrew Amendment No. 2 to the proposal.
In Amendment No. 3, the Exchange clarified certain
representations regarding the availability of
quotation, last sale, and pricing information for the
Shares and the instruments in which the Fund may
invest. Amendment No. 3 is available at https://
www.sec.gov/comments/sr-nysearca-2015-73/
nysearca201573-2.pdf.
6 15 U.S.C. 78s(b)(2).
7 See Securities Exchange Act Release No. 76362,
80 FR 70044 (November 12, 2015). The Commission
designated December 21, 2015 as the date by which
it should approve, disapprove, or institute
proceedings to determine whether to disapprove the
proposed rule change.
2 17
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80859
submitted Amendment Nos. 4, 5, and 6,
respectively, to the proposed rule
change.8 The Commission is publishing
this notice to solicit comment on
Amendment Nos. 3, 4, 5 and 6 to the
proposed rule change from interested
persons and is approving the proposed
rule change, as modified by Amendment
Nos. 1, 3, 4, 5 and 6, on an accelerated
basis.
II. The Exchange’s Description of the
Proposal 9
The Exchange proposes to list and
trade the Shares under NYSE Arca
Equities Rule 8.600, which governs the
listing and trading of Managed Fund
Shares on the Exchange.10 The Shares
will be offered by the Claymore
Exchange-Traded Fund Trust 2
(‘‘Trust’’),11 a statutory trust organized
8 Amendment No. 4 replaced and superseded the
original filing, as modified by Amendment Nos. 1
and 3, in its entirety. Amendment No. 4 is available
at https://www.sec.gov/comments/sr-nysearca-201573/nysearca201573-3.pdf. Amendment No. 5
replaced and superseded the original filing, as
modified by Amendment Nos. 1, 3 and 4, in its
entirety. Amendment No. 5 is available at https://
www.sec.gov/comments/sr-nysearca-2015-73/
nysearca201573-4.pdf. Amendment No. 6 replaced
and superseded the original filing, as modified by
Amendment Nos. 1, 3, 4 and 5, in its entirety.
9 Additional information regarding the Fund, the
Trust (as defined herein), and the Shares, including
investment strategies, risks, creation and
redemption procedures, fees, portfolio holdings,
disclosure policies, calculation of net asset value
(‘‘NAV’’), distributions, and taxes, among other
things, can be found in the Notice and the
Registration Statement, as applicable. See Notice,
supra note 4, and Registration Statement, infra note
11.
10 The Commission previously approved a
proposed rule change relating to listing and trading
of shares of the Guggenheim Enhanced Total Return
ETF under NYSE Arca Equities Rule 8.600. See
Securities Exchange Act Release Nos. 68488
(December 20, 2012), 77 FR 76326 (December 27,
2012) (SR–NYSEArca–2012–142) (‘‘Prior Notice’’);
and 68863 (February 7, 2013), 78 FR 10222
(February 13, 2013) (SR–NYSEArca–2012–142)
(‘‘Prior Order’’ and, together with the Prior Notice,
‘‘Prior Release’’). The Exchange represents that
shares of the Guggenheim Enhanced Total Return
ETF have not commenced listing and trading on the
Exchange, that the Fund would replace the
Guggenheim Enhanced Total Return ETF as
approved in the Prior Release, and that the Notice
supersedes the Prior Release in its entirety. The
Exchange represents that prior to commencement of
trading of Shares of the Fund, the Trust will file an
amendment to its Registration Statement to change
the name of the Guggenheim Enhanced Total
Return ETF to the name of the Fund.
11 The Exchange states that the Trust is registered
under the 1940 Act. According to the Exchange, on
November 25, 2014, the Trust filed with the
Commission an amendment to its registration
statement on Form N–1A under the Securities Act
of 1933 (15 U.S.C. 77a) (‘‘Securities Act’’) and the
1940 Act relating to the Fund (File Nos. 333–
135105 and 811–21910) (‘‘Registration Statement’’).
The Exchange states that the Commission has
issued an order granting certain exemptive relief to
the Trust under the 1940 Act. See Investment
Company Act Release No. 29271 (May 18, 2010)
(File No. 812–13534) (‘‘Exemptive Order’’).
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]]>Agencies
[Federal Register Volume 80, Number 248 (Monday, December 28, 2015)]
[Notices]
[Pages 80857-80859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32579]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-31946; 811-8025]
Self Storage Group, Inc.; Notice of Application
December 21, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for deregistration under section 8(f) of
the Investment Company Act of 1940 (the ``Act'').
-----------------------------------------------------------------------
Summary of Application: Self Storage Group, Inc. requests an order
declaring that it has ceased to be an investment company.
Applicant: Self Storage Group, Inc.
Filing Dates: The application was filed on March 28, 2014, and amended
on September 19, 2014, and September 25, 2015.
Hearing or Notification of Hearing: An order granting the request 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
January 15, 2016, and should be accompanied by proof of service on
applicant, in the form of an affidavit or, for lawyers, a certificate
of service. Pursuant to rule 0-5 under the Act, hearing requests should
state the nature of the writer's interest, any facts bearing upon the
desirability of a hearing on the matter, 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: The Commission: Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicant: 11
Hanover Square, 12th Floor, New York, NY 10005.
FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior
Counsel, at (202) 551-6879, or David P. Bartels, Branch Chief, at (202)
551-6821 (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.
Applicant's Representations
1. From 1983 through 1996, applicant operated as a diversified
series of shares of Bull & Bear Incorporated, an open-end management
investment company. Applicant became separately incorporated under the
laws of the State of Maryland in December 1996 and registered under the
Act as a closed-end management investment company in January 1997.
Applicant, formerly known as Global Income Fund, Inc., changed its name
to Self Storage Group, Inc., effective November 2013.
2. On February 29, 2012, applicant's stockholders approved a
proposal to change the nature of applicant's business so as to cease to
be an investment company and to become an operating company that would
own, operate, manage, acquire, develop and redevelop professionally
managed self storage facilities and would seek to qualify as a real
estate investment trust (``REIT'') for federal tax purposes (the
``Business Proposal'').\1\ Applicant states that, for this purpose,
``professionally managed self storage facility'' refers to a type of
real property that offers storage space rental, generally on a month-
to-month basis, for personal or business use. Applicant represents that
it manages and operates each of its self
[[Page 80858]]
storage facilities using its own personnel and does not intend to
retain third party management for any of its self storage facilities.
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\1\ The Business Proposal permits applicant to invest in ``real
estate assets,'' which according to applicant the Internal Revenue
Code defines to include, in addition to real property, interests in
REITs, interests in mortgages on real property and other investments
in the real estate investment, service and related industries.
Applicant concedes that some or all of these additional types of
assets may be considered investment securities within the meaning of
section 3(a)(2) of the Act. However, applicant intends to invest
primarily in real property self storage facilities and represents
that it will limit its investments in other real estate assets to
avoid classification as an investment company under the Act.
---------------------------------------------------------------------------
3. Applicant states that, following stockholder approval, it has
taken steps to implement the Business Proposal. In particular, on June
15, 2012, applicant's board of directors (the ``Board'') approved the
termination of applicant's management contract with an outside
investment adviser and applicant became internally managed by its
officers and employees. In addition, applicant's management commenced
seeking acquisition opportunities in real property self storage
facilities. Applicant states that those efforts have resulted in its
assets being concentrated in several wholly owned subsidiaries, all of
which own and operate real property self storage facilities. Applicant
represents that none of these subsidiaries is an investment company as
defined in section 3(a) of the Act or is relying on the exception from
the definition of investment company in section 3(c)(1) or section
3(c)(7) of the Act.
4. Applicant states that, as of December 31, 2014, and June 30,
2015, applicant's wholly owned subsidiaries represented approximately
81% and 82%, respectively, of its total assets measured at fair value
on an unconsolidated basis (exclusive of Government securities and cash
items), and each of applicant's wholly owned subsidiaries held at least
90% of its assets in direct investments in real property self storage
facilities. Applicant further states that, as of December 31, 2014, and
June 30, 2015, its holdings of investment securities (as defined in
section 3(a) of the Act) (``Investment Securities'') represented
approximately 9% and 10%, respectively, and cash items represented
approximately 10% and 9% of its total assets on an unconsolidated
basis.
5. Applicant states that, for the six months ended June 30, 2015,
on a consolidated basis, it derived approximately 69% of its gross
income from its operation of self storage facilities, approximately 29%
from realized gains from divestment of its holdings of Investment
Securities, approximately 3% from dividends paid by its holdings of
Investment Securities, and less than 1% from its cash items.\2\
Applicant anticipates currently that, for fiscal 2015, on a
consolidated basis, it will derive approximately 75% of its gross
income from its operation of self storage facilities, approximately 23%
from realized gains from divestment of its holdings of Investment
Securities, approximately 2% from dividends paid by its holdings of
Investment Securities, and less than 1% from its cash items. In
addition, applicant states that, for the last four fiscal quarters
combined, no more than 45 percent of its consolidated net income after
taxes was derived from securities (other than securities issued by
companies (i) that are wholly owned by applicant, (ii) through which
applicant engages in a business other than that of investing,
reinvesting, owning, holding or trading in securities and (iii) that
are not investment companies).
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\2\ Applicant states that none of its subsidiaries derives any
of its gross income from securities.
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6. Applicant expects to continue to earn a majority of its gross
income from its self storage facility operations and expects its income
from Investment Securities and a time deposit to continue to decrease
as it continues to divest its holdings of Investment Securities.
7. Applicant represents that, since stockholders approved the
Business Proposal, it has consistently represented to the public that
it is primarily engaged in the business of owning, operating, managing,
acquiring, developing, and redeveloping professionally managed self
storage facilities. In addition, applicant asserts that its president
and other officers spend substantially all of the time that they devote
to applicant's business on (a) overseeing and guiding the management of
its wholly owned subsidiaries' self storage facilities and (b)
conducting strategic review of applicant's lines of business in order
to determine if these units are appropriately structured to implement
applicant's objectives. Applicant states that its president and other
officers spend no time engaged in investing and reinvesting applicant's
assets in Investment Securities other than to continue to divest
applicant's holdings of Investment Securities. Likewise, applicant
asserts that its Board has shifted its focus from oversight of a
company engaged in the business of investing and reinvesting in
securities to oversight of a company engaged in the business of owning
and operating real property self storage facilities.
8. Applicant states that it is not currently a party to any
litigation or administrative proceeding and has timely complied with
its obligations to file annual and other reports with the Commission.
9. Applicant represents that, if the requested order is granted, it
will seek to list its common stock on NASDAQ and will be subject to the
reporting and other requirements of the Exchange Act.
Applicant's Legal Analysis
1. Section 8(f) of the Act provides that whenever the Commission,
upon application or its own motion, finds that a registered investment
company has ceased to be an investment company, the Commission shall so
declare by order and upon the taking effect of such order, the
registration of such company shall cease to be in effect.
2. Section 3(a)(1)(A) of the Act defines an ``investment company''
as any issuer that ``is or holds itself out as being engaged primarily,
or proposes to engage primarily, in the business of investing,
reinvesting, or trading in securities.'' Section 3(a)(1)(C) of the Act
defines an ``investment company'' as any issuer that ``is engaged or
proposes to engage in the business of investing, reinvesting, owning,
holding, or trading in securities, and owns or proposes to acquire
investment securities having a value exceeding 40 per centum of the
value of such issuer's total assets (exclusive of Government securities
and cash items) on an unconsolidated basis.'' \3\
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\3\ Section 3(a)(2) of the Act defines ``investment securities''
as ``all securities except (A) Government securities, (B) securities
issued by employees' securities companies, and (C) securities issued
by majority-owned subsidiaries of the owner which (i) are not
investment companies, and (ii) are not relying on the exception from
the definition of investment company in paragraph (1) or (7) of
subsection (c).''
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3. Section 3(b)(1) of the Act provides that ``[n]otwithstanding
paragraph (1)(C) of subsection (a), none of the following persons is an
investment company within the meaning of this title: (1) Any issuer
primarily engaged, directly or through a wholly owned subsidiary or
subsidiaries, in a business or businesses other than that of investing,
reinvesting, owning, holding, or trading in securities.'' Rule 3a-1
under the Act states that ``[n]otwithstanding section 3(a)(1)(C) of the
Act, an issuer will be deemed not to be an investment company under the
Act, provided, that: (a) no more than 45 percent of the value (as
defined in section 2(a)(41) of the Act) of such issuer's total assets
(exclusive of Government securities and cash items) consists of, and no
more than 45 percent of such issuer's net income after taxes (for the
last four fiscal quarters combined) is derived from, securities other
than: (1) Government securities; (2) securities issued by employees'
securities companies; (3) securities issued by majority-owned
subsidiaries of the issuer (other than subsidiaries relying on the
exclusion from the definition of investment company in section 3(b)(3)
or (c)(1) of the Act) which are not
[[Page 80859]]
investment companies; and (4) securities issued by companies: (i) which
are controlled primarily by such issuer; (ii) through which such issuer
engages in a business other than that of investing, reinvesting,
owning, holding or trading in securities; and (iii) which are not
investment companies; (b) the issuer is not an investment company as
defined in section 3(a)(1)(A) or 3(a)(1)(B) of the Act and is not a
special situation investment company; and (c) the percentages described
in paragraph (a) of this section are determined on an unconsolidated
basis, except that the issuer shall consolidate its financial
statements with the financial statements of any wholly-owned
subsidiaries.''
4. Applicant states that it is no longer an investment company as
defined in section 3(a)(1)(A) or section 3(a)(1)(C). As noted above,
applicant states that, for the last four fiscal quarters combined, no
more than 45 percent of its consolidated net income after taxes was
derived from securities (other than securities issued by companies (i)
that are wholly owned by applicant, (ii) through which applicant
engages in a business other than that of investing, reinvesting,
owning, holding or trading in securities and (iii) that are not
investment companies). Applicant asserts that it is primarily engaged
in the business of owning, operating, managing, acquiring, developing,
and redeveloping professionally managed self storage facilities through
its wholly owned subsidiaries. Applicant argues that its historical
development, its public representations, the activities of its
directors and officers, the nature of its present assets and the
sources of its present income support this assertion. Applicant states
that it is thus qualified for an order of the Commission pursuant to
section 8(f) of the Act.
For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-32579 Filed 12-24-15; 8:45 am]
BILLING CODE 8011-01-P
