Leaning Pine II, L.L.C.; Notice of Application, 3853-3855 [2016-01201]
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Federal Register / Vol. 81, No. 14 / Friday, January 22, 2016 / Notices
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
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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 such
filing also will be available for
inspection and copying at the principal
offices 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–OC–
2015–03, and should be submitted on or
before February 12, 2016.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.7
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–01199 Filed 1–21–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–31959; File No. 812–14473]
Leaning Pine II, L.L.C.; Notice of
Application
January 15, 2016.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from all
provisions of the Act and all rules and
regulations thereunder.
AGENCY:
Applicant
requests an order for an exemption from
all provisions of the Act and all rules
and regulations thereunder, as
Applicant is essentially a closely-held
private investment company formed for
a limited purpose.
APPLICANT: Leaning Pine II, L.L.C.
(‘‘Applicant’’).
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SUMMARY OF APPLICATION:
7 17
CFR 200.30–3(a)(73).
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The application was filed
on May 26, 2015 and amended on
October 22, 2015 and January 13, 2016.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
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 February 9, 2016, and
should be accompanied by proof of
service on applicant, in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F St.
NE., Washington, DC 20549–1090.
Applicant: Leaning Pine II, L.L.C., 315
E. Commerce Street, Suite 300, San
Antonio, TX 78205.
FOR FURTHER INFORMATION CONTACT:
Vanessa M. Meeks, Senior Counsel, or
Melissa R. Harke, Branch Chief, at (202)
551–6825 (Chief Counsel’s Office,
Division of Investment Management).
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.
FILING DATES:
Applicant’s Representations
1. Applicant is a newly-formed Texas
limited liability company. Applicant
will be capitalized with assets of
individual members of the Hixon family
(the ‘‘Family’’) and other Family
Members (as defined below) so that it
may serve as a non-charitable
endowment for Hobo Lake Club
Incorporated (‘‘Hobo Lake Club’’), a
non-profit corporation organized by the
Family, which owns a lakeside property
and lodge in Plum Lake, Vilas County,
Wisconsin and operates as a recreation
club for its members. The land held by
Hobo Lake Club was first acquired by
members of the Family approximately
100 years ago. As a non-profit
corporation, Hobo Lake Club does not
have ‘‘owners’’ in the common sense,
but instead has ‘‘members.’’ Under Hobo
Lake Club’s bylaws, members are
limited to lineal descendants of Joseph
M. Hixon and Irene C. Hixon.
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3853
2. As used herein, ‘‘Family Members’’
refers to (i) the descendants (including
adopted descendants) of Joseph M.
Hixon (deceased) and Irene C. Hixon
(deceased); (ii) spouses and formerspouses of any individuals described in
clause (i) above; (iii) one descendant of
a former spouse who will be admitted
as a member of Applicant upon the
effectiveness of the Shareholder
Agreement (as defined below) and his
descendants (including adopted
descendants); and (iv) trusts,
partnerships and other entities
established for the exclusive benefit of,
or exclusively owned by, any
individuals described in clause (i), (ii)
or (iii) above.
3. Applicant anticipates that upon its
capitalization Applicant will have
approximately 120 members, all of
whom will be Family Members. These
approximately 120 members will
include several trusts for the benefit of
individuals who are also members
individually. Applicant will be
capitalized exclusively by the
contribution of a portion of dividend
proceeds payable to various Family
Members by Hixon Properties
Incorporated (‘‘Hixon Properties’’), a
private company that owns and invests
primarily in real estate and related
ventures that is controlled by Family
Members, such dividend proceeds to be
contributed to Applicant pursuant to an
agreement (the ‘‘Shareholder
Agreement’’) among Applicant, Hixon
Properties and Applicant’s members.
4. Membership interests in Applicant
(‘‘Interests’’) have not been and will not
be offered or sold to the public.
Applicant’s operating agreement (the
‘‘LLC Agreement’’) includes a restriction
on transfers that prohibits members
from transferring Interests to anyone
other than Family Members. As a result
of this restriction on transfers, no
trading market will exist for the
Interests. Additionally, any new
member (i.e. other than by transfer) is
also required to be a shareholder of
Hixon Properties, whose shares are
subject to transfer restrictions similar to
those in the LLC Agreement (and
applicant will further prohibit
admittance of non-Family Members
other than upon a transfer of shares of
Hixon Properties subject to the
Shareholder Agreement by a Member of
Applicant to a non-Family Member).
5. Under the LLC Agreement,
Applicant’s purpose is to serve as a
source of funding for Hobo Lake Club,
and Applicant is expressly authorized to
make distributions to Hobo Lake Club
for the operations, maintenance and
improvement of Hobo Lake Club’s
properties. Applicant is not intended to
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Federal Register / Vol. 81, No. 14 / Friday, January 22, 2016 / Notices
be utilized as a wealth-creation vehicle
for its members. Rather, pursuant to the
Shareholder Agreement and consistent
with Applicant’s limited purpose of
serving as a source of funding for Hobo
Lake Club, contributions of dividend
proceeds from Hixon Properties will
cease once Applicant’s assets reach
$4,500,000 (as adjusted for changes in
the consumer price index) (the
‘‘Funding Threshold’’), which is a level
of funding that is intended, along with
other funding resources, to be sufficient
to support Hobo Lake Club.
6. Applicant will be managed by a
body of at least three managers (the
‘‘Managers’’), each of whom must be a
Family Member. Election or removal of
a Manager requires the action of
Applicant’s members holding a majority
of the Interests. The Managers may be
reimbursed for expenses incurred on
behalf of Applicant, but may only
receive compensation for their service
as Managers in excess of such
reimbursements with the consent of the
members holding at least 60% of the
Interests, which compensation shall not
include performance fees or other
performance-based compensation.
7. Applicant’s assets will be
comprised of investments in individual
securities and investment funds. The
Managers will engage investment
advisers registered with the Commission
to carry out Applicant’s investment
policy (the ‘‘Policy’’).
8. The highest priority of the Policy is
to ensure funding for Hobo Lake Club.
The registered investment advisers
engaged by Applicant will be required
to operate within the guidelines
established by the Policy and assume a
moderate risk posture. Management fees
charged must be reasonable and
customary, and no performance fees
will be permitted.
9. The Managers will supervise all
advisers engaged by Applicant and will
review Applicant’s investment portfolio
quarterly to ensure compliance with the
Policy. All advisers will be required to
provide reports to the Managers at least
quarterly. Applicant will provide
reports to its members at least annually.
On a portfolio-wide basis, the registered
investment advisers engaged by
Applicant will be subject to quantitative
asset allocation, portfolio quality and
diversification standards, which will be
established by the Managers.
Applicant’s Legal Analysis
1. Applicant is seeking an order
pursuant to section 6(c) of the Act for an
exemption from all of the provisions of
the Act and all rules and regulations
thereunder. Applicant submits that
section 3(c)(1) of the Act evidences the
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intention of Congress to exclude
‘‘private’’ investment companies from
the scope of the Act. Under section 6(c)
of the Act, the Commission may exempt
any person, security, or transaction 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. Applicant submits that the
requested exemption from all provisions
of the Act and all rules and regulations
thereunder meets these standards, as
Applicant is essentially a closely-held
private investment company formed for
a limited purpose.
2. Applicant states that similarly
situated companies can typically rely on
section 3(c)(1) of the Act for an
exclusion from registration under the
Act. Section 3(c)(1) excepts from the
definition of ‘‘investment company’’ any
issuer whose outstanding securities are
beneficially owned by not more than
100 persons and which is not making
and does not presently propose to make
a public offering of its securities.
Applicant submits that, as
contemplated, there will be over 100
initial investors in Applicant, and the
number of members is likely to increase
in the future as Interests are passed
down to younger generations, meaning
it would not qualify for the exception
under section 3(c)(1).
3. Applicant submits that the
exemption requested is necessary and
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. Applicant further submits that
the exemption requested is consistent
with relief granted by the Commission
to other private investment companies
that have more than 100 beneficial
owners and that are substantially owned
and controlled by a single family or that
were formed for the limited purpose of
aggregating and holding funds pending
utilization of those funds by a related
private enterprise.
4. Applicant submits that one of the
key purposes of the Act is the mitigation
of the conflicts of interest between fund
investors and the management of the
fund. Applicant submits that, in its case,
sufficient safeguards exist to protect its
investors and such safeguards are
consistent with those implemented by
similarly situated entities for which
relief has previously been granted.
Applicant’s Conditions
Applicant agrees that the order of the
Commission granting the requested
relief shall be subject to the following
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Fmt 4703
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conditions, which conditions shall
continue for so long as Applicant seeks
to rely on such relief:
1. Interests have not been and will not
be offered or sold to the public. The LLC
Agreement includes a restriction on
transfers that prohibits members from
transferring Interests to anyone other
than Family Members. Additionally,
any new member (i.e., other than by
transfer) is also required to be a
shareholder of Hixon Properties, whose
shares are subject to transfer restrictions
similar to those in the LLC Agreement.
Applicant will further prohibit
admittance of non-Family Members
other than upon a transfer of shares of
Hixon Properties subject to the
Shareholder Agreement by a Member of
Applicant to a non-Family Member.
2. Applicant will be managed by
Managers, each of whom will be a
Family Member.
3. Applicant’s Managers will engage
only Commission-registered investment
advisers and will meet no less
frequently than quarterly to review
Applicant’s investment portfolio to
ensure compliance with the Policy.
4. Applicant will not modify its
purpose as set forth in the LLC
Agreement.
5. Applicant will not knowingly make
available to any broker or dealer
registered under the Securities
Exchange Act of 1934, as amended, any
financial information concerning
Applicant for the purpose of knowingly
enabling such broker or dealer to initiate
any regular trading market in the
Interests.
6. Applicant will provide each
member of Applicant annual financial
statements audited by an independent
public accountant registered with, and
subject to regular inspection by, the
Public Company Accounting Oversight
Board at such times as Applicant’s
assets, as reflected on Applicant’s yearend balance sheet prepared in
accordance with generally accepted
accounting principles, equal or exceed
$1,000,000. With respect to any year for
which audited annual financial
statements are not provided in
accordance with the foregoing
limitation, Applicant will provide
unaudited annual financial statements
to each member of Applicant.
7. Applicant will comply with the
provisions set forth in subparagraphs
(A)(i) and (B)(i) of section 12(d)(1) of the
Act, as if Applicant were an investment
company relying on the exemption set
forth in section 3(c)(1) of the Act.
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Federal Register / Vol. 81, No. 14 / Friday, January 22, 2016 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–01201 Filed 1–21–16; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice: 9417]
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Notice of Public Meeting
The Department of State will conduct
an open meeting at 9:30 a.m. on
Wednesday, February 24, 2016, at the
headquarters of the Radio Technical
Commission for Maritime Services
(RTCM) in Suite 605, 1611 N. Kent
Street, Arlington, Virginia 22209. The
primary purpose of the meeting is to
prepare for the third Session of the
International Maritime Organization’s
(IMO) Sub-Committee on Navigation,
Communication, and Search and Rescue
to be held at the IMO Headquarters,
United Kingdom, from February 29 to
March 4, 2016.
The agenda items to be considered
include:
—Routing measures and mandatory ship
reporting systems
—Amendment to the General Provisions
on Ships’ Routing (resolution
A.572(14)) on establishing multiple
structures at sea
—Recognition of Galileo as a component
of the WWRNS
—Additional modules to the Revised
Performance Standards for Integrated
Navigations Systems (INS) (resolution
MSC.252(83) relating to the
harmonization of bridge design and
display of information
—Updates to the LRIT system
—Guidelines associated with multisystem shipborne radionavigation
receivers dealing with the harmonized
provision of PNT data and integrity
information
—Guidelines for the harmonized
display of navigation information
received via communications
equipment
—Revised Guidelines and criteria for
ship reporting systems (resolution
MSC.43(64))
—Analysis of developments in maritime
radiocommunication systems and
technology
—Performance Standards for shipborne
GMDSS equipment to accommodate
additional providers of GMDSS
satellite services
—Interconnection of NAVTEX and
Inmarsat SafetyNET receivers and
their display on Integrated Navigation
Display Systems
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—Completion of the detailed review of
the Global Maritime Distress and
Safety System (GMDSS)
—Updating of the GMDSS master plan
and guidelines on MSI (maritime
safety information) provisions
—Response to matters related to the
Radiocommunication ITU R Study
Group
—Response to matters related to ITU
World Radiocommunication
Conference
—Measures to protect the safety of
persons rescued at sea
—Analysis of information on
developments in Inmarsat and
Cospas-Sarsat
—Revised Performance Standards for
EPIRBs operating on 406 MHz
(resolution A.810(19)) to include
Cospas-Sarsat MEOSAR and second
generation beacons
—Guidelines on harmonized
aeronautical and maritime search and
rescue procedures, including SAR
training matters
—Further development of the Global
SAR Plan for the provision of
maritime SAR services
—Amendments to the IAMSAR Manual
—Revised guidelines for preparing
plans for cooperation between search
and rescue services and passenger
ships (MSC.1/Circ.1079)
—Unified interpretation of provisions of
IMO safety, security, and environment
related Conventions
—Biennial status report and provisional
agenda for NCSR 4
—Report to the Maritime Safety
Committee
Members of the public may attend
this meeting up to the seating capacity
of the room. To facilitate the building
security process, and to request
reasonable accommodation, those who
plan to attend should contact the
meeting coordinator, George Detweiler,
by email at George.H.Detweiler@
uscg.mil, by phone at (202) 372–1566, or
in writing at 2703 Martin Luther King Jr.
Ave. SE., Stop 7418, Washington DC
20593–7418 not later than February 17,
2016. Requests made after February 17,
2016, might not be able to be
accommodated. RTCM Headquarters is
adjacent to the Rosslyn Metro Station.
For further directions and lodging
information, please see: https://www.
rtcm.org/visit.php. Additional
information regarding this and other
public meetings related to the IMO may
be found at: www.uscg.mil/imo.
Dated: January 15, 2016.
Jonathan W. Burby,
Coast Guard Liaison Officer, Office of Ocean
and Polar Affairs, Department of State.
DEPARTMENT OF STATE
[Public Notice: 9420]
Culturally Significant Objects Imported
for Exhibition Determinations:
‘‘Picasso: The Great War,
Experimentation and Change’’
Exhibition
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, Delegation of Authority
No. 236–3 of August 28, 2000 (and, as
appropriate, Delegation of Authority No.
257–1 of December 11, 2015), I hereby
determine that the objects to be
included in the exhibition ‘‘Picasso: The
Great War, Experimentation and
Change,’’ imported from abroad for
temporary exhibition within the United
States, are of cultural significance. The
objects are imported pursuant to loan
agreements with the foreign owners or
custodians. I also determine that the
exhibition or display of the exhibit
objects at The Barnes Foundation,
Philadelphia, Pennsylvania, from on or
about February 21, 2016, until on or
about May 9, 2016, at the Columbus
Museum of Art, Columbus, Ohio, from
on or about June 10, 2016, until on or
about September 11, 2016, and at
possible additional exhibitions or
venues yet to be determined, is in the
national interest. I have ordered that
Public Notice of these Determinations
be published in the Federal Register.
SUMMARY:
For
further information, including a list of
the imported objects, contact the Office
of Public Diplomacy and Public Affairs
in the Office of the Legal Adviser, U.S.
Department of State (telephone: 202–
632–6471; email: section2459@
state.gov). The mailing address is U.S.
Department of State, L/PD, SA–5, Suite
5H03, Washington, DC 20522–0505.
FOR FURTHER INFORMATION CONTACT:
Dated: January 14, 2016.
Mark Taplin,
Deputy Assistant Secretary for Policy, Bureau
of Educational and Cultural Affairs,
Department of State.
[FR Doc. 2016–01277 Filed 1–21–16; 8:45 am]
BILLING CODE 4710–05–P
[FR Doc. 2016–01275 Filed 1–21–16; 8:45 am]
BILLING CODE 4710–09–P
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]]>Agencies
[Federal Register Volume 81, Number 14 (Friday, January 22, 2016)]
[Notices]
[Pages 3853-3855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01201]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-31959; File No. 812-14473]
Leaning Pine II, L.L.C.; Notice of Application
January 15, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from all
provisions of the Act and all rules and regulations thereunder.
-----------------------------------------------------------------------
SUMMARY OF APPLICATION: Applicant requests an order for an exemption
from all provisions of the Act and all rules and regulations
thereunder, as Applicant is essentially a closely-held private
investment company formed for a limited purpose.
APPLICANT: Leaning Pine II, L.L.C. (``Applicant'').
FILING DATES: The application was filed on May 26, 2015 and amended on
October 22, 2015 and January 13, 2016.
HEARING OR NOTIFICATION OF HEARING: An order granting the requested
relief 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 February 9, 2016, and should be accompanied by proof of
service on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
St. NE., Washington, DC 20549-1090. Applicant: Leaning Pine II, L.L.C.,
315 E. Commerce Street, Suite 300, San Antonio, TX 78205.
FOR FURTHER INFORMATION CONTACT: Vanessa M. Meeks, Senior Counsel, or
Melissa R. Harke, Branch Chief, at (202) 551-6825 (Chief Counsel's
Office, Division of Investment Management).
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. Applicant is a newly-formed Texas limited liability company.
Applicant will be capitalized with assets of individual members of the
Hixon family (the ``Family'') and other Family Members (as defined
below) so that it may serve as a non-charitable endowment for Hobo Lake
Club Incorporated (``Hobo Lake Club''), a non-profit corporation
organized by the Family, which owns a lakeside property and lodge in
Plum Lake, Vilas County, Wisconsin and operates as a recreation club
for its members. The land held by Hobo Lake Club was first acquired by
members of the Family approximately 100 years ago. As a non-profit
corporation, Hobo Lake Club does not have ``owners'' in the common
sense, but instead has ``members.'' Under Hobo Lake Club's bylaws,
members are limited to lineal descendants of Joseph M. Hixon and Irene
C. Hixon.
2. As used herein, ``Family Members'' refers to (i) the descendants
(including adopted descendants) of Joseph M. Hixon (deceased) and Irene
C. Hixon (deceased); (ii) spouses and former-spouses of any individuals
described in clause (i) above; (iii) one descendant of a former spouse
who will be admitted as a member of Applicant upon the effectiveness of
the Shareholder Agreement (as defined below) and his descendants
(including adopted descendants); and (iv) trusts, partnerships and
other entities established for the exclusive benefit of, or exclusively
owned by, any individuals described in clause (i), (ii) or (iii) above.
3. Applicant anticipates that upon its capitalization Applicant
will have approximately 120 members, all of whom will be Family
Members. These approximately 120 members will include several trusts
for the benefit of individuals who are also members individually.
Applicant will be capitalized exclusively by the contribution of a
portion of dividend proceeds payable to various Family Members by Hixon
Properties Incorporated (``Hixon Properties''), a private company that
owns and invests primarily in real estate and related ventures that is
controlled by Family Members, such dividend proceeds to be contributed
to Applicant pursuant to an agreement (the ``Shareholder Agreement'')
among Applicant, Hixon Properties and Applicant's members.
4. Membership interests in Applicant (``Interests'') have not been
and will not be offered or sold to the public. Applicant's operating
agreement (the ``LLC Agreement'') includes a restriction on transfers
that prohibits members from transferring Interests to anyone other than
Family Members. As a result of this restriction on transfers, no
trading market will exist for the Interests. Additionally, any new
member (i.e. other than by transfer) is also required to be a
shareholder of Hixon Properties, whose shares are subject to transfer
restrictions similar to those in the LLC Agreement (and applicant will
further prohibit admittance of non-Family Members other than upon a
transfer of shares of Hixon Properties subject to the Shareholder
Agreement by a Member of Applicant to a non-Family Member).
5. Under the LLC Agreement, Applicant's purpose is to serve as a
source of funding for Hobo Lake Club, and Applicant is expressly
authorized to make distributions to Hobo Lake Club for the operations,
maintenance and improvement of Hobo Lake Club's properties. Applicant
is not intended to
[[Page 3854]]
be utilized as a wealth-creation vehicle for its members. Rather,
pursuant to the Shareholder Agreement and consistent with Applicant's
limited purpose of serving as a source of funding for Hobo Lake Club,
contributions of dividend proceeds from Hixon Properties will cease
once Applicant's assets reach $4,500,000 (as adjusted for changes in
the consumer price index) (the ``Funding Threshold''), which is a level
of funding that is intended, along with other funding resources, to be
sufficient to support Hobo Lake Club.
6. Applicant will be managed by a body of at least three managers
(the ``Managers''), each of whom must be a Family Member. Election or
removal of a Manager requires the action of Applicant's members holding
a majority of the Interests. The Managers may be reimbursed for
expenses incurred on behalf of Applicant, but may only receive
compensation for their service as Managers in excess of such
reimbursements with the consent of the members holding at least 60% of
the Interests, which compensation shall not include performance fees or
other performance-based compensation.
7. Applicant's assets will be comprised of investments in
individual securities and investment funds. The Managers will engage
investment advisers registered with the Commission to carry out
Applicant's investment policy (the ``Policy'').
8. The highest priority of the Policy is to ensure funding for Hobo
Lake Club. The registered investment advisers engaged by Applicant will
be required to operate within the guidelines established by the Policy
and assume a moderate risk posture. Management fees charged must be
reasonable and customary, and no performance fees will be permitted.
9. The Managers will supervise all advisers engaged by Applicant
and will review Applicant's investment portfolio quarterly to ensure
compliance with the Policy. All advisers will be required to provide
reports to the Managers at least quarterly. Applicant will provide
reports to its members at least annually. On a portfolio-wide basis,
the registered investment advisers engaged by Applicant will be subject
to quantitative asset allocation, portfolio quality and diversification
standards, which will be established by the Managers.
Applicant's Legal Analysis
1. Applicant is seeking an order pursuant to section 6(c) of the
Act for an exemption from all of the provisions of the Act and all
rules and regulations thereunder. Applicant submits that section
3(c)(1) of the Act evidences the intention of Congress to exclude
``private'' investment companies from the scope of the Act. Under
section 6(c) of the Act, the Commission may exempt any person,
security, or transaction 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.
Applicant submits that the requested exemption from all provisions of
the Act and all rules and regulations thereunder meets these standards,
as Applicant is essentially a closely-held private investment company
formed for a limited purpose.
2. Applicant states that similarly situated companies can typically
rely on section 3(c)(1) of the Act for an exclusion from registration
under the Act. Section 3(c)(1) excepts from the definition of
``investment company'' any issuer whose outstanding securities are
beneficially owned by not more than 100 persons and which is not making
and does not presently propose to make a public offering of its
securities. Applicant submits that, as contemplated, there will be over
100 initial investors in Applicant, and the number of members is likely
to increase in the future as Interests are passed down to younger
generations, meaning it would not qualify for the exception under
section 3(c)(1).
3. Applicant submits that the exemption requested is necessary and
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. Applicant further submits that the exemption
requested is consistent with relief granted by the Commission to other
private investment companies that have more than 100 beneficial owners
and that are substantially owned and controlled by a single family or
that were formed for the limited purpose of aggregating and holding
funds pending utilization of those funds by a related private
enterprise.
4. Applicant submits that one of the key purposes of the Act is the
mitigation of the conflicts of interest between fund investors and the
management of the fund. Applicant submits that, in its case, sufficient
safeguards exist to protect its investors and such safeguards are
consistent with those implemented by similarly situated entities for
which relief has previously been granted.
Applicant's Conditions
Applicant agrees that the order of the Commission granting the
requested relief shall be subject to the following conditions, which
conditions shall continue for so long as Applicant seeks to rely on
such relief:
1. Interests have not been and will not be offered or sold to the
public. The LLC Agreement includes a restriction on transfers that
prohibits members from transferring Interests to anyone other than
Family Members. Additionally, any new member (i.e., other than by
transfer) is also required to be a shareholder of Hixon Properties,
whose shares are subject to transfer restrictions similar to those in
the LLC Agreement. Applicant will further prohibit admittance of non-
Family Members other than upon a transfer of shares of Hixon Properties
subject to the Shareholder Agreement by a Member of Applicant to a non-
Family Member.
2. Applicant will be managed by Managers, each of whom will be a
Family Member.
3. Applicant's Managers will engage only Commission-registered
investment advisers and will meet no less frequently than quarterly to
review Applicant's investment portfolio to ensure compliance with the
Policy.
4. Applicant will not modify its purpose as set forth in the LLC
Agreement.
5. Applicant will not knowingly make available to any broker or
dealer registered under the Securities Exchange Act of 1934, as
amended, any financial information concerning Applicant for the purpose
of knowingly enabling such broker or dealer to initiate any regular
trading market in the Interests.
6. Applicant will provide each member of Applicant annual financial
statements audited by an independent public accountant registered with,
and subject to regular inspection by, the Public Company Accounting
Oversight Board at such times as Applicant's assets, as reflected on
Applicant's year-end balance sheet prepared in accordance with
generally accepted accounting principles, equal or exceed $1,000,000.
With respect to any year for which audited annual financial statements
are not provided in accordance with the foregoing limitation, Applicant
will provide unaudited annual financial statements to each member of
Applicant.
7. Applicant will comply with the provisions set forth in
subparagraphs (A)(i) and (B)(i) of section 12(d)(1) of the Act, as if
Applicant were an investment company relying on the exemption set forth
in section 3(c)(1) of the Act.
[[Page 3855]]
For the Commission, by the Division of Investment Management,
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-01201 Filed 1-21-16; 8:45 am]
BILLING CODE 8011-01-P
