Brookfield Asset Management Private Institutional Capital Adviser US, LLC et al.; Notice of Application, 9898-9900 [2016-04113]

Download as PDF 9898 Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Notices [Release No. 4337/803–00222] Brookfield Asset Management Private Institutional Capital Adviser US, LLC et al.; Notice of Application February 22, 2016. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of application for an exemptive order under Section 206A of the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’) and Rule 206(4)– 5(e). AGENCY: SUMMARY: Brookfield Asset Management Private Institutional Capital Adviser US, LLC and Brookfield Asset Management Private Institutional Capital Adviser (Canada), L.P. (‘‘Applicants’’). RELEVANT ADVISERS ACT SECTIONS: Exemption requested under section 206A of the Advisers Act and rule 206(4)–5(e) from rule 206(4)–5(a)(1) under the Advisers Act. SUMMARY OF APPLICATION: Applicants request that the Commission issue an order under section 206A of the Advisers Act and rule 206(4)–5(e) exempting them from rule 206(4)–5(a)(1) under the Advisers Act to permit Applicants to receive compensation for investment advisory services provided to government entities within the twoyear period following a contribution by a covered associate of Applicant to an official of the government entities. FILING DATES: The application was filed on January 29, 2014, and amended and restated applications were filed on February 26, 2014, August 13, 2014 and October 7, 2015. 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 March 18, 2016, and should be accompanied by proof of service on Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Advisers 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 may request notification of a hearing by writing to the Commission’s Secretary. mstockstill on DSK4VPTVN1PROD with NOTICES APPLICANTS: VerDate Sep<11>2014 20:41 Feb 25, 2016 Jkt 238001 Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants, Brookfield Asset Management Private Institutional Capital Adviser US, LLC et al., 250 Vesey Street, 15th Floor, New York, NY 10281. FOR FURTHER INFORMATION CONTACT: Aaron T. Gilbride, Senior Counsel or Sara P. Crovitz, Assistant Chief Counsel, at (202) 551–6825 (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 either at http://www.sec.gov/ rules/iareleases.shtml or by searching for the file number, or for an applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551–8090. ADDRESSES: SECURITIES AND EXCHANGE COMMISSION Applicant’s Representations 1. Brookfield Asset Management Private Institutional Capital Adviser US, LLC (‘‘Brookfield US’’) and Brookfield Asset Management Private Institutional Capital Adviser (Canada), L.P. (‘‘Brookfield Canada’’ and, together with Brookfield US, the ‘‘Applicants’’), are affiliated asset management companies registered with the Commission as investment advisers under the Advisers Act and are indirectly wholly-owned by Brookfield Asset Management, Inc., a public company. Brookfield US advises, among other private funds, Brookfield Strategic Real Estate Partners B L.P. (‘‘Fund A’’), a private fund that is part of Brookfield’s Real Estate Platform, and Brookfield Canada advises, among other private funds, Brookfield Infrastructure Fund II–B, L.P. (‘‘Fund B’’), a private fund that is part of Brookfield’s Infrastructure Platform. Fund A and Fund B are collectively referred to as the ‘‘Funds.’’ Both Funds are excluded from the definition of ‘‘investment company’’ by Section 3(c)(7) of the Investment Company Act of 1940. Certain public pension plans that are government entities of New York City (the ‘‘Clients’’) are invested in the Funds. The investment decisions for the Clients are made by the respective boards of trustees, which range from seven to 15 members, and include certain elected officials sitting ex officio; appointees of elected officials; and representatives of employee groups that participate in the system. Either the Mayor of New York City or one or more of the Mayor’s appointees sit on each board. 2. On January 13, 2013, Richard B. Clark, a Senior Managing Partner, PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 Global Head of Brookfield’s Real Estate Platform, Brookfield Property Group, and Non-Executive Chairman of the Board of Brookfield Office Properties (‘‘BPO’’), a non-investment adviser commercial real estate corporation that owns, manages, and develops real estate and is affiliated with the Applicants and Brookfield (the ‘‘Contributor’’), made a $400 campaign contribution (the ‘‘Contribution’’) to the campaign of Christine Quinn (the ‘‘Official’’), a New York City Councilwoman who was Council Speaker. The Contribution was given in connection with a fundraiser for the Official’s campaign on January 13, 2013, which the Contributor attended. At the time of the Contribution, the Official was a candidate for New York City Mayor. 3. Applicants represent that the amount of the Contribution, profile of the candidate, and characteristics of the campaign fall generally within the pattern of the Contributor’s other political donations. 4. Applicants represent that the Contributor has confirmed that he has not, at any time, had any contact with the Official concerning campaign contributions, nor has the Contributor told any prospective or existing investor (including the Clients) about the Contribution. 5. Applicants represent that the Contributor’s role with the Clients was limited to making substantive presentations to the Clients’ representatives and consultants about the Real Estate Platform Brookfield US manages. Applicants represent that the Contributor had no contact with any representative of the Clients outside of such presentation and no contact with any member of the board of trustees which oversees the investment decisions of the Clients. 6. Applicants represent that the Clients made their investment in Fund A on May 23, 2012, approximately eight months prior to the Contributor making the Contribution. The Clients invested in Fund B on July 8, 2013. Applicants represent that the Contributor was not involved in any contacts with the Clients, their representatives or the New York City Comptroller’s office in relation to their investment in Fund B. 7. Applicants represent that the Contributor did not solicit any other persons to make contributions to the Official’s campaign and did not arrange any introductions to potential supporters. 8. Applicants represent that the Contribution was discovered by the Contributor following completion of his annual certification regarding compliance with the Applicants’ E:\FR\FM\26FEN1.SGM 26FEN1 Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Compliance Manual (which includes a policy and procedure designed to ensure compliance with laws, rules and regulations regarding pay-to-play practices). Applicants represent that the Contributor immediately notified the Chief Compliance Officer and obtained a full refund within days after the Contribution was discovered. Applicants represent that Brookfield US established an escrow account for Fund A in which all management fees attributable to the Clients’ investment in Fund A dating back to January 13, 2013, the date of the Contribution, are segregated. Applicants represent that at the time of the Clients’ investment in Fund B, Brookfield Canada established an escrow account for Fund B in which all management fees attributable to Clients’ investment in Fund B are segregated. Applicants represent that they also notified the Clients that if the Commission does not grant the exemption, the Applicants will refund the management fees related to the Clients’ investments during the two-year period to the Funds, and when carried interest is realized, the portion attributable to the Clients’ investments during the two-year time-out period will be calculated and refunded to the Funds. 9. Applicants represent that at no time did any of Applicant’s other employees have any knowledge that the Contribution had been made prior to its discovery by the Applicants’ Chief Compliance Officer on February 22, 2013. 10. Applicants represent that they had adopted and implemented compliance procedures meeting the requirements of rule 206(4)–5. Applicants represent that their compliance procedures prohibit contributions by covered associates to state or local candidates or officials. Applicants represent that their compliance procedures apply to all of Applicants’ covered associates, and those who may become covered associates. Applicant represents that all employees are required to certify their compliance on a periodic basis. Applicants’ Legal Analysis 1. Rule 206(4)–5(a)(1) under the Advisers Act prohibits a registered investment adviser from providing investment advisory services for compensation to a government entity within two years after a contribution to an official of the government entity is made by the investment adviser or any covered associate of the investment adviser. The Clients are each a ‘‘government entity,’’ as defined in rule 206(4)–5(f)(5), the Contributor is a ‘‘covered associate’’ as defined in rule VerDate Sep<11>2014 20:41 Feb 25, 2016 Jkt 238001 206(4)–5(f)(2), and the Official is an ‘‘official’’ as defined in rule 206(4)– 5(f)(6). Rule 206(4)–5(c) provides that when a government entity invests in a covered investment pool, the investment adviser to that covered investment pool is treated as providing advisory services directly to the government entity. The Funds are each a ‘‘covered investment pool,’’ as defined in rule 206(4)–5(f)(3)(ii). 2. Section 206A of the Advisers Act grants the Commission the authority to ‘‘conditionally or unconditionally exempt any person or transaction . . . from any provision or provisions of [the Advisers Act] or of any rule or regulation thereunder, 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 Advisers Act].’’ 3. Rule 206(4)–5(e) provides that the Commission may exempt an investment adviser from the prohibition under rule 206(4)–5(a)(1) upon consideration of the factors listed below, among others: (1) Whether the 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 Advisers Act; (2) Whether the investment adviser: (i) Before the contribution resulting in the prohibition was made, adopted and implemented policies and procedures reasonably designed to prevent violations of the rule; and (ii) prior to or at the time the contribution which resulted in such prohibition was made, had no actual knowledge of the contribution; and (iii) after learning of the contribution: (A) Has taken all available steps to cause the contributor involved in making the contribution which resulted in such prohibition to obtain a return of the contribution; and (B) has taken such other remedial or preventive measures as may be appropriate under the circumstances; (3) Whether, at the time of the contribution, the contributor was a covered associate or otherwise an employee of the investment adviser, or was seeking such employment; (4) The timing and amount of the contribution which resulted in the prohibition; (5) The nature of the election (e.g., federal, state or local); and (6) The contributor’s apparent intent or motive in making the contribution which resulted in the prohibition, as evidenced by the facts and circumstances surrounding such contribution. PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 9899 4. Applicants request an order pursuant to section 206A and rule 206(4)–5(e), exempting them from the two-year prohibition on compensation imposed by rule 206(4)–5(a)(1) with respect to investment advisory services provided to the Clients within the twoyear period following the Contribution. 5. Applicants submit that the exemption 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 Advisers Act. Applicants further submit that the other factors set forth in rule 206(4)–5(e) similarly weigh in favor of granting an exemption to the Applicants to avoid consequences disproportionate to the violation. 6. Applicants state that the relationship with the Clients pre-date the Contribution and that only the investment in Fund B (in which the Contributor did not play a role) was made subsequent to the Contribution. Applicants state that the Contribution was made eight months after the Clients’ investment in Fund A. Applicants note that they established and maintain their relationships with the Clients on an arms’-length basis free from any improper influence as a result of the Contribution. 7. Applicants state that at all relevant times they had policies which were fully compliant with rule 206(4)-5’s requirements at the time of the Contribution. Applicants further state that at no time did Applicants or any employees of Applicants, other than the Contributor, have any knowledge that the Contribution had been made prior to its discovery by Applicants’ Chief Compliance Officer in February 2013. After learning of the Contribution, Applicants and the Contributor took all available steps to obtain a return of the Contribution. Escrow accounts were set up for the Clients at both Funds and all fees charged to the Clients’ capital accounts in the Funds since January 13, 2013 were deposited by the Applicants in the accounts for immediate return to the Funds should an exemptive order not be granted. 8. Applicants state that the Contributor’s apparent intent in making the Contribution was not to influence the selection or retention of the Applicants. The amount of the Contribution, profile of the candidate, and characteristics of the campaign fall generally within the pattern of the Contributor’s other political donations. Applicants further state, as discussed above, that the Contributor’s involvement with the Clients has been limited to making substantive E:\FR\FM\26FEN1.SGM 26FEN1 9900 Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Notices presentations to the Clients’ representatives and consultants about the Real Estate Platform Brookfield US manages. The Contributor has no contact with any representative of a Client outside of those presentations and no contact with any member of a Client’s board. For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–04113 Filed 2–25–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77203; File No. SR– NYSEArca–2015–110] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 4 to, and Order Instituting Proceedings to Determine Whether to Approve or Disapprove, a Proposed Rule Change, as Modified by Amendment No. 4 Thereto, Amending NYSE Arca Equities Rule 8.600 to Adopt Generic Listing Standards for Managed Fund Shares February 22, 2016. mstockstill on DSK4VPTVN1PROD with NOTICES On November 6, 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’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend NYSE Arca Equities Rule 8.600 and to adopt generic listing standards for Managed Fund Shares.3 The proposed rule change was published for comment in the Federal Register on November 27, 2015.4 On November 23, 2015, the Exchange filed Amendment No. 1 to the proposed rule change, which amended and replaced the original proposal in its entirety. On January 4, 2016, pursuant to Section 19(b)(2) of the Act,5 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.6 On January 21, 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See NYSE Arca Equities Rule 8.600(c)(1) (defining Managed Fund Shares). 4 See Securities Exchange Act Release No. 76486 (Nov. 20, 2015), 80 FR 74169 (‘‘Notice’’). 5 15 U.S.C. 78s(b)(2). 6 See Securities Exchange Act Release No. 76819, 81 FR 987 (Jan. 8, 2016). The Commission designated February 25, 2016 as the date by which 2 17 VerDate Sep<11>2014 20:41 Feb 25, 2016 Jkt 238001 2016, the Exchange withdrew Amendment No. 1 and filed Amendment No. 2 to the proposed rule change.7 The proposed rule change, as modified by Amendment No. 2 thereto, was published for comment in the Federal Register on February 1, 2016.8 On February 11, 2016, the Exchange filed Amendment No. 3 to the proposed rule change.9 The Commission has received one comment letter on the proposal.10 Pursuant to Section 19(b)(1) of the Act 11 and Rule 19b–4 thereunder,12 notice is hereby given that, on February 12, 2016, the Exchange filed with the Commission Amendment No. 4 to the proposed rule change, as described in Sections I and II below, which Sections have been prepared by the Exchange.13 the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. See id. 7 In Amendment No. 2 to the proposed rule change, the Exchange added provisions to the proposed generic listing criteria relating to non-U.S. Component Stocks, convertible securities, and listed swaps, among other changes. Amendment No. 2, which amended and replaced the original proposal in its entirety, is available on the Commission’s Web site at: http://www.sec.gov/ comments/sr-nysearca-2015-110/nysearca20151103.pdf. 8 See Securities Exchange Act Release No. 76974 (Jan. 26, 2016), 81 FR 5149. 9 In Amendment No. 3 to the proposed rule change, the Exchange (a) revised the provisions relating to convertible securities, (b) clarified the limitations on non-exchange-traded American Depositary Receipts, (c) eliminated redundant provisions relating to limitations on leveraged and inverse-leveraged Derivative Securities Products, (d) revised the provision relating to limitations on listed derivatives, (e) clarified that, for purposes of the limitations relating to listed and over-thecounter derivatives, a portfolio’s investment in listed and over-the-counter derivatives will be calculated as the total absolute notional value of these derivatives, and (f) provided additional information regarding the statutory basis of the proposal. Amendment No. 3, which amended and replaced the proposed rule change, as modified by Amendment No. 2 thereto, in its entirety, is available on the Commission’s Web site at: http:// www.sec.gov/comments/sr-nysearca-2015-110/ nysearca2015110-4.pdf. 10 See Letter from Rob Ivanoff to the Commission dated Nov. 22, 2015 (commenting that the format of the Exchange’s proposed rule change was unclear and difficult to read, and suggesting a new format that would be easier to understand). All comments on the proposed rule change are available on the Commission’s Web site at: http://www.sec.gov/ comments/sr-nysearca-2015-110/nysearca20151101.htm. 11 15 U.S.C.78s(b)(1). 12 17 CFR 240.19b–4. 13 Specifically, in Amendment No. 4 to the proposed rule change and as described herein, the Exchange (a) confirmed that the generic listing criteria are to be applied on an initial and continuing basis, (b) corrected a typographical error, and (c) corrected a statement regarding the statutory basis of the proposal. Amendment No. 4, which amended and replaced the proposed rule change, as modified by Amendment No. 3 thereto, in its entirety, is available on the Commission’s Web site at: http://www.sec.gov/comments/srnysearca-2015-110/nysearca2015110-5.pdf. PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 4 thereto, from interested persons. Additionally, this order institutes proceedings under Section 19(b)(2)(B) of the Act 14 to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 4 thereto, as discussed in Section III below. The institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved, nor does it mean that the Commission will ultimately disapprove the proposed rule change. Rather, as described in Section III below, the Commission seeks and encourages interested persons to provide additional comment on the proposed rule change to inform the Commission’s analysis of whether to approve or disapprove the proposed rule change. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Arca Equities Rule 8.600 to adopt generic listing standards for Managed Fund Shares. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Arca Equities Rule 8.600 to adopt generic listing standards for Managed Fund Shares. Under the Exchange’s current rules, a proposed rule change must be filed with the Securities and 14 15 E:\FR\FM\26FEN1.SGM U.S.C. 78s(b)(2)(B). 26FEN1

Agencies

[Federal Register Volume 81, Number 38 (Friday, February 26, 2016)]
[Notices]
[Pages 9898-9900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04113]



[[Page 9898]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 4337/803-00222]


Brookfield Asset Management Private Institutional Capital Adviser 
US, LLC et al.; Notice of Application

February 22, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an exemptive order under Section 206A 
of the Investment Advisers Act of 1940 (the ``Advisers Act'') and Rule 
206(4)-5(e).

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SUMMARY: 

Applicants: Brookfield Asset Management Private Institutional Capital 
Adviser US, LLC and Brookfield Asset Management Private Institutional 
Capital Adviser (Canada), L.P. (``Applicants'').

Relevant Advisers Act Sections: Exemption requested under section 206A 
of the Advisers Act and rule 206(4)-5(e) from rule 206(4)-5(a)(1) under 
the Advisers Act.

Summary of Application: Applicants request that the Commission issue an 
order under section 206A of the Advisers Act and rule 206(4)-5(e) 
exempting them from rule 206(4)-5(a)(1) under the Advisers Act to 
permit Applicants to receive compensation for investment advisory 
services provided to government entities within the two-year period 
following a contribution by a covered associate of Applicant to an 
official of the government entities.

Filing Dates: The application was filed on January 29, 2014, and 
amended and restated applications were filed on February 26, 2014, 
August 13, 2014 and October 7, 2015.

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 March 18, 2016, and should be accompanied by proof of service 
on Applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Advisers 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 may request 
notification of a hearing by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street 
NE., Washington, DC 20549-1090. Applicants, Brookfield Asset Management 
Private Institutional Capital Adviser US, LLC et al., 250 Vesey Street, 
15th Floor, New York, NY 10281.

FOR FURTHER INFORMATION CONTACT: Aaron T. Gilbride, Senior Counsel or 
Sara P. Crovitz, Assistant Chief Counsel, at (202) 551-6825 (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 either at http://www.sec.gov/rules/iareleases.shtml or by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicant's Representations

    1. Brookfield Asset Management Private Institutional Capital 
Adviser US, LLC (``Brookfield US'') and Brookfield Asset Management 
Private Institutional Capital Adviser (Canada), L.P. (``Brookfield 
Canada'' and, together with Brookfield US, the ``Applicants''), are 
affiliated asset management companies registered with the Commission as 
investment advisers under the Advisers Act and are indirectly wholly-
owned by Brookfield Asset Management, Inc., a public company. 
Brookfield US advises, among other private funds, Brookfield Strategic 
Real Estate Partners B L.P. (``Fund A''), a private fund that is part 
of Brookfield's Real Estate Platform, and Brookfield Canada advises, 
among other private funds, Brookfield Infrastructure Fund II-B, L.P. 
(``Fund B''), a private fund that is part of Brookfield's 
Infrastructure Platform. Fund A and Fund B are collectively referred to 
as the ``Funds.'' Both Funds are excluded from the definition of 
``investment company'' by Section 3(c)(7) of the Investment Company Act 
of 1940. Certain public pension plans that are government entities of 
New York City (the ``Clients'') are invested in the Funds. The 
investment decisions for the Clients are made by the respective boards 
of trustees, which range from seven to 15 members, and include certain 
elected officials sitting ex officio; appointees of elected officials; 
and representatives of employee groups that participate in the system. 
Either the Mayor of New York City or one or more of the Mayor's 
appointees sit on each board.
    2. On January 13, 2013, Richard B. Clark, a Senior Managing 
Partner, Global Head of Brookfield's Real Estate Platform, Brookfield 
Property Group, and Non-Executive Chairman of the Board of Brookfield 
Office Properties (``BPO''), a non-investment adviser commercial real 
estate corporation that owns, manages, and develops real estate and is 
affiliated with the Applicants and Brookfield (the ``Contributor''), 
made a $400 campaign contribution (the ``Contribution'') to the 
campaign of Christine Quinn (the ``Official''), a New York City 
Councilwoman who was Council Speaker. The Contribution was given in 
connection with a fundraiser for the Official's campaign on January 13, 
2013, which the Contributor attended. At the time of the Contribution, 
the Official was a candidate for New York City Mayor.
    3. Applicants represent that the amount of the Contribution, 
profile of the candidate, and characteristics of the campaign fall 
generally within the pattern of the Contributor's other political 
donations.
    4. Applicants represent that the Contributor has confirmed that he 
has not, at any time, had any contact with the Official concerning 
campaign contributions, nor has the Contributor told any prospective or 
existing investor (including the Clients) about the Contribution.
    5. Applicants represent that the Contributor's role with the 
Clients was limited to making substantive presentations to the Clients' 
representatives and consultants about the Real Estate Platform 
Brookfield US manages. Applicants represent that the Contributor had no 
contact with any representative of the Clients outside of such 
presentation and no contact with any member of the board of trustees 
which oversees the investment decisions of the Clients.
    6. Applicants represent that the Clients made their investment in 
Fund A on May 23, 2012, approximately eight months prior to the 
Contributor making the Contribution. The Clients invested in Fund B on 
July 8, 2013. Applicants represent that the Contributor was not 
involved in any contacts with the Clients, their representatives or the 
New York City Comptroller's office in relation to their investment in 
Fund B.
    7. Applicants represent that the Contributor did not solicit any 
other persons to make contributions to the Official's campaign and did 
not arrange any introductions to potential supporters.
    8. Applicants represent that the Contribution was discovered by the 
Contributor following completion of his annual certification regarding 
compliance with the Applicants'

[[Page 9899]]

Compliance Manual (which includes a policy and procedure designed to 
ensure compliance with laws, rules and regulations regarding pay-to-
play practices). Applicants represent that the Contributor immediately 
notified the Chief Compliance Officer and obtained a full refund within 
days after the Contribution was discovered. Applicants represent that 
Brookfield US established an escrow account for Fund A in which all 
management fees attributable to the Clients' investment in Fund A 
dating back to January 13, 2013, the date of the Contribution, are 
segregated. Applicants represent that at the time of the Clients' 
investment in Fund B, Brookfield Canada established an escrow account 
for Fund B in which all management fees attributable to Clients' 
investment in Fund B are segregated. Applicants represent that they 
also notified the Clients that if the Commission does not grant the 
exemption, the Applicants will refund the management fees related to 
the Clients' investments during the two-year period to the Funds, and 
when carried interest is realized, the portion attributable to the 
Clients' investments during the two-year time-out period will be 
calculated and refunded to the Funds.
    9. Applicants represent that at no time did any of Applicant's 
other employees have any knowledge that the Contribution had been made 
prior to its discovery by the Applicants' Chief Compliance Officer on 
February 22, 2013.
    10. Applicants represent that they had adopted and implemented 
compliance procedures meeting the requirements of rule 206(4)-5. 
Applicants represent that their compliance procedures prohibit 
contributions by covered associates to state or local candidates or 
officials. Applicants represent that their compliance procedures apply 
to all of Applicants' covered associates, and those who may become 
covered associates. Applicant represents that all employees are 
required to certify their compliance on a periodic basis.

Applicants' Legal Analysis

    1. Rule 206(4)-5(a)(1) under the Advisers Act prohibits a 
registered investment adviser from providing investment advisory 
services for compensation to a government entity within two years after 
a contribution to an official of the government entity is made by the 
investment adviser or any covered associate of the investment adviser. 
The Clients are each a ``government entity,'' as defined in rule 
206(4)-5(f)(5), the Contributor is a ``covered associate'' as defined 
in rule 206(4)-5(f)(2), and the Official is an ``official'' as defined 
in rule 206(4)-5(f)(6). Rule 206(4)-5(c) provides that when a 
government entity invests in a covered investment pool, the investment 
adviser to that covered investment pool is treated as providing 
advisory services directly to the government entity. The Funds are each 
a ``covered investment pool,'' as defined in rule 206(4)-5(f)(3)(ii).
    2. Section 206A of the Advisers Act grants the Commission the 
authority to ``conditionally or unconditionally exempt any person or 
transaction . . . from any provision or provisions of [the Advisers 
Act] or of any rule or regulation thereunder, 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 Advisers Act].''
    3. Rule 206(4)-5(e) provides that the Commission may exempt an 
investment adviser from the prohibition under rule 206(4)-5(a)(1) upon 
consideration of the factors listed below, among others:
    (1) Whether the 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 Advisers 
Act;
    (2) Whether the investment adviser: (i) Before the contribution 
resulting in the prohibition was made, adopted and implemented policies 
and procedures reasonably designed to prevent violations of the rule; 
and (ii) prior to or at the time the contribution which resulted in 
such prohibition was made, had no actual knowledge of the contribution; 
and (iii) after learning of the contribution: (A) Has taken all 
available steps to cause the contributor involved in making the 
contribution which resulted in such prohibition to obtain a return of 
the contribution; and (B) has taken such other remedial or preventive 
measures as may be appropriate under the circumstances;
    (3) Whether, at the time of the contribution, the contributor was a 
covered associate or otherwise an employee of the investment adviser, 
or was seeking such employment;
    (4) The timing and amount of the contribution which resulted in the 
prohibition;
    (5) The nature of the election (e.g., federal, state or local); and
    (6) The contributor's apparent intent or motive in making the 
contribution which resulted in the prohibition, as evidenced by the 
facts and circumstances surrounding such contribution.
    4. Applicants request an order pursuant to section 206A and rule 
206(4)-5(e), exempting them from the two-year prohibition on 
compensation imposed by rule 206(4)-5(a)(1) with respect to investment 
advisory services provided to the Clients within the two-year period 
following the Contribution.
    5. Applicants submit that the exemption 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 Advisers Act. Applicants further submit that the 
other factors set forth in rule 206(4)-5(e) similarly weigh in favor of 
granting an exemption to the Applicants to avoid consequences 
disproportionate to the violation.
    6. Applicants state that the relationship with the Clients pre-date 
the Contribution and that only the investment in Fund B (in which the 
Contributor did not play a role) was made subsequent to the 
Contribution. Applicants state that the Contribution was made eight 
months after the Clients' investment in Fund A. Applicants note that 
they established and maintain their relationships with the Clients on 
an arms'-length basis free from any improper influence as a result of 
the Contribution.
    7. Applicants state that at all relevant times they had policies 
which were fully compliant with rule 206(4)-5's requirements at the 
time of the Contribution. Applicants further state that at no time did 
Applicants or any employees of Applicants, other than the Contributor, 
have any knowledge that the Contribution had been made prior to its 
discovery by Applicants' Chief Compliance Officer in February 2013. 
After learning of the Contribution, Applicants and the Contributor took 
all available steps to obtain a return of the Contribution. Escrow 
accounts were set up for the Clients at both Funds and all fees charged 
to the Clients' capital accounts in the Funds since January 13, 2013 
were deposited by the Applicants in the accounts for immediate return 
to the Funds should an exemptive order not be granted.
    8. Applicants state that the Contributor's apparent intent in 
making the Contribution was not to influence the selection or retention 
of the Applicants. The amount of the Contribution, profile of the 
candidate, and characteristics of the campaign fall generally within 
the pattern of the Contributor's other political donations. Applicants 
further state, as discussed above, that the Contributor's involvement 
with the Clients has been limited to making substantive

[[Page 9900]]

presentations to the Clients' representatives and consultants about the 
Real Estate Platform Brookfield US manages. The Contributor has no 
contact with any representative of a Client outside of those 
presentations and no contact with any member of a Client's board.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-04113 Filed 2-25-16; 8:45 am]
BILLING CODE 8011-01-P