Ares Capital Corporation, et al.;, 35419-35421 [2016-12878]
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Federal Register / Vol. 81, No. 106 / Thursday, June 2, 2016 / Notices
it crosses a non-displayed order on the
NYSE Arca Book. As proposed, ALO
Orders would trade if the limit price of
such order crosses any displayed or
non-displayed orders on the NYSE Arca
Book, thus providing for similar
treatment regardless of whether the
contra-side order is displayed or not. In
addition, currently, an ALO Order is repriced so it would not lock the price of
the BO or BB. As proposed, the
Exchange would provide for similar
treatment so that an ALO Order would
not lock the price of a displayed order
of any size. The proposed rule change
would further reduce the burden on
competition for its ETP Holders by
harmonizing the operation of ALO
Orders with how similar orders function
on other exchanges.21
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not (i) significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 22 and Rule 19b–
4(f)(6) thereunder.23
A proposed rule change filed under
Rule 19b–4(f)(6) 24 normally does not
become operative for 30 days after the
date of the filing. However Rule 19b–
4(f)(6)(iii) 25 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. According to
the Exchange, the proposed rule change
would consistently treat ALO Orders if
they cross the price of displayed or non-
asabaliauskas on DSK3SPTVN1PROD with NOTICES
21 See
supra note 7.
22 15 U.S.C. 78s(b)(3)(A).
23 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
24 17 CFR 240.19b–4(f)(6).
25 17 CFR 240.19b–4(f)(6)(iii).
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displayed interest (i.e., trade),26 which
would increase the potential for price
improvement for ALO Orders. Also,
according to the Exchange, the proposed
rule change would consistently treat
ALO Orders if they lock the price of
any-sized displayed interest (i.e., reprice), which would reduce the
potential for ALO Orders to lock the
displayed price of an odd lot order and
therefore reduce confusion in the
market. In addition, the Exchange states
that it anticipates that it will be able to
implement the technology changes
supporting this proposed rule change in
less than 30 days from the date of filing.
The Commission believes the waiver of
the operative delay is consistent with
the protection of investors and the
public interest. Therefore, the
Commission hereby waives the
operative delay and designates the
proposal operative upon filing.27
At any time within 60 days of the
filing of such 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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
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:
35419
All submissions should refer to File
Number SR–NYSEARCA–2016–80. 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
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–
NYSEARCA–2016–80 and should be
submitted on or before June 23, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Brent J. Fields,
Secretary.
[FR Doc. 2016–12891 Filed 6–1–16; 8:45 am]
BILLING CODE 8011–01–P
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–
NYSEARCA–2016–80 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
May 26, 2016.
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
26 The Exchange states that this proposed change
is based on the rules of BZX and Nasdaq. See supra
note 7.
27 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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[Investment Company Act Release No.
32127; 812–14399]
Ares Capital Corporation, et al.; Notice
of Application
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
18(a) and 61(a) of the Act.
AGENCY:
Applicants: Ares Capital Corporation
(the ‘‘Company’’), Ares Capital
28 17
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CFR 200.30–3(a)(12).
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35420
Federal Register / Vol. 81, No. 106 / Thursday, June 2, 2016 / Notices
the Act.1 The Company’s investment
objective is to generate both current
income and capital appreciation
through debt and equity investments.
The Adviser, a Delaware limited
SUMMARY: Summary of the Application:
liability company, is the investment
The Company requests an order to
adviser to the Company. The Adviser is
permit it to adhere to a modified asset
registered under the Investment
coverage requirement.
Advisers Act of 1940.
2. Ares SBIC, a Delaware limited
DATES: Filing Dates: The application was
partnership, received approval for a
filed on December 12, 2014, and
amended on May 11, 2015, and May 11, license from the Small Business
Administration (‘‘SBA’’) to operate as a
2016.
small business investment company
Hearing or Notification of Hearing: An
(‘‘SBIC’’) under the Small Business
order granting the requested relief will
Investment Act of 1958 (‘‘SBIA’’). Ares
be issued unless the Commission orders
SBIC is excluded from the definition of
a hearing. Interested persons may
investment company by section 3(c)(7)
request a hearing by writing to the
of the Act. The General Partner is the
Commission’s Secretary and serving
sole general partner of Ares SBIC and
applicants with a copy of the request,
the Company is the sole member of the
personally or by mail. Hearing requests
General Partner. The Company is the
should be received by the Commission
sole limited partner of Ares SBIC. The
by 5:30 p.m. on June 20, 2016, and
Company, directly or indirectly through
should be accompanied by proof of
the General Partner, wholly owns Ares
service on applicants, in the form of an
SBIC.
affidavit or, for lawyers, a certificate of
Applicants’ Legal Analysis
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
1. The Company requests an
nature of the writer’s interest, any facts
exemption pursuant to section 6(c) of
bearing upon the desirability of a
the Act from the provisions of sections
hearing on the matter, the reason for the 18(a) and 61(a) of the Act to permit it
request, and the issues contested.
to adhere to a modified asset coverage
Persons who wish to be notified of a
requirement with respect to any direct
hearing may request notification by
or indirect wholly-owned subsidiary of
writing to the Commission’s Secretary.
the Company that is licensed by the
SBA to operate under the SBIA as an
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F Street SBIC and relies on section 3(c)(7) for an
exemption from the definition of
NE., Washington, DC 20549–1090.
‘‘investment company’’ under the Act
Applicants: Kipp deVeer, Chief
(each, an ‘‘SBIC Subsidiary’’).2
Executive Officer, and Joshua M.
Applicants state that companies
Bloomstein, General Counsel, Ares
operating under the SBIA, such as the
Capital Corporation, 245 Park Avenue,
SBIC Subsidiary, are subject to the
44th Floor, New York, NY 10167.
SBA’s substantial regulation of
FOR FURTHER INFORMATION CONTACT:
permissible leverage in their capital
Kieran G. Brown, Senior Counsel, at
structure.
(202) 551–6773, or James M. Curtis,
2. Section 18(a) of the Act prohibits a
Branch Chief, at (202) 551–6712
registered closed-end investment
(Division of Investment Management,
company from issuing any class of
Chief Counsel’s Office).
senior security or selling any such
security of which it is the issuer unless
SUPPLEMENTARY INFORMATION: The
the company complies with the asset
following is a summary of the
coverage requirements set forth in that
application. The complete application
section. Section 61(a) of the Act makes
may be obtained via the Commission’s
section 18 applicable to BDCs, with
Web site by searching for the file
certain modifications. Section 18(k)
number, or for an applicant using the
exempts an investment company
Company name box, at https://
www.sec.gov/search/search.htm or by
1 Section 2(a)(48) defines a BDC to be any closedcalling (202) 551–8090.
end investment company that operates for the
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Management LLC (the ‘‘Adviser’’), Ares
Venture Finance GP LLC (the ‘‘General
Partner’’), and Ares Venture Finance,
L.P. (‘‘Ares SBIC’’).
Applicants’ Representations
1. The Company, a Maryland
corporation, is an externally managed,
non-diversified, closed-end
management investment company that
has elected to be regulated as a business
development company (‘‘BDC’’) under
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18:30 Jun 01, 2016
Jkt 238001
purpose of making investments in securities
described in section 55(a)(1) through 55(a)(3) of the
Act and makes available significant managerial
assistance with respect to the issuers of such
securities.
2 All existing entities that currently intend to rely
on the order are named as applicants. Any other
existing or future entity that may rely on the order
in the future will comply with the terms and
condition of the order.
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operating as an SBIC from the asset
coverage requirements for senior
securities representing indebtedness
that are contained in section 18(a)(1)(A)
and (B).
3. Applicants state that the Company
may be required to comply with the
asset coverage requirements of section
18(a) (as modified by section 61(a)) on
a consolidated basis because the
Company may be deemed to be an
indirect issuer of any class of senior
security issued by Ares SBIC or another
SBIC Subsidiary. Applicants state that
applying section 18(a) (as modified by
section 61(a)) on a consolidated basis
generally would require that the
Company treat as its own all assets and
any liabilities held directly either by
itself, by Ares SBIC, or by another SBIC
Subsidiary. Accordingly, the Company
requests an order under section 6(c) of
the Act exempting the Company from
the provisions of section 18(a) (as
modified by section 61(a)), such that
senior securities issued by each SBIC
Subsidiary that would be excluded from
its individual asset coverage ratio by
section 18(k) if it were itself a BDC
would also be excluded from the
Company’s consolidated asset coverage
ratio.
4. Section 6(c) of the Act, in relevant
part, permits the Commission to exempt
any transaction or class of transactions
from any provision of the Act if and to
the extent that such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policy and
provisions of the Act. Applicants state
that the requested relief satisfies the
section 6(c) standard. Applicants
contend that, because the SBIC
Subsidiary would be entitled to rely on
section 18(k) if it were a BDC, there is
no policy reason to deny the benefit of
that exemption to the Company.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition.
The Company will not itself issue or
sell any senior security and the
Company will not cause or permit Ares
SBIC or any other SBIC Subsidiary to
issue or sell any senior security of
which the Company, Ares SBIC or any
other SBIC Subsidiary is the issuer
except to the extent permitted by
section 18 (as modified for BDCs by
section 61(a)); provided that,
immediately after the issuance or sale of
any such senior security by any of the
Company, Ares SBIC or any other SBIC
Subsidiary, the Company, individually
and on a consolidated basis, shall have
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Federal Register / Vol. 81, No. 106 / Thursday, June 2, 2016 / Notices
the asset coverage required by section
18(a) (as modified by section 61(a)). In
determining whether the Company,
Ares SBIC and any other SBIC
Subsidiary on a consolidated basis have
the asset coverage required by section
18(a) (as modified by section 61(a)), any
senior securities representing
indebtedness of Ares SBIC or another
SBIC Subsidiary if that SBIC Subsidiary
has issued indebtedness that is held or
guaranteed by the SBA shall not be
considered senior securities and, for
purposes of the definition of ‘‘asset
coverage’’ in section 18(h), shall be
treated as indebtedness not represented
by senior securities.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016–12878 Filed 6–1–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77926; File No. SR–CBOE–
2016–045]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule To Amend the Fees Schedule
May 26, 2016.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 16,
2016, Chicago Board Options Exchange,
Incorporated (the ‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Fees Schedule. The text of the proposed
rule change is available on the
Exchange’s Web site (https://
www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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18:30 Jun 01, 2016
Jkt 238001
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
Exchange 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 these
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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
Fees Schedule.3 Specifically, the
Exchange proposes to allow MarketMakers to designate a Trading Permit
Holder with agency operations (‘‘Order
Flow Provider’’ or ‘‘OFP’’) and Order
Flow Providers to designate a MarketMaker for purposes of being able to take
advantage of credits available under the
Affiliate Volume Plan (‘‘AVP’’).
By way of background, the Exchange
currently has in place various incentive
programs that benefit ‘‘affiliated’’
Trading Permit Holders (‘‘TPHs’’).
Particularly, under AVP, if a TPH
Affiliate of a Market-Maker (including a
Designated Primary Market-Maker
(‘‘DPM’’) or Lead Market-Maker
(‘‘LMM’’)) qualifies under the Volume
Incentive Program (‘‘VIP’’), that MarketMaker will also qualify for a discount on
that Market-Maker’s Liquidity Provider
Sliding Scale (‘‘Sliding Scale’’)
transaction fees (‘‘Liquidity Provider
Sliding Scale Credit’’). More
specifically, if a Market-Maker’s
Affiliate reaches Tier 2, Tier 3 or Tier
4 of VIP, that Market-Maker will receive
a Liquidity Provider Sliding Scale
Credit of 10%, 20% or 30%,
respectively. Additionally, if a MarketMaker’s Affiliate receives a credit under
VIP, that Market-Maker will also receive
a credit on its Market-Maker Trading
Permit fees 4 corresponding to the VIP
tier reached (10% Market-Maker
Trading Permit fee credit for reaching
Tier 2 of the VIP, 20% Market-Maker
Trading Permit fee credit for reaching
3 The Exchange initially filed the proposed fee
change on May 2, 2016 (SR–CBOE–2016–044). On
May 16, 2016, the Exchange withdrew that filing
and submitted this filing.
4 This credit does not apply to Market-Maker
Trading Permits used for appointments in SPX,
SPXpm, RUT, VIX, OEX and XEO.
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35421
Tier 3 of the VIP, and 30% MarketMaker Trading Permit fee credit for
reaching Tier 4 of the VIP) (‘‘Access
Credit’’). ‘‘Affiliate’’ for purposes of
AVP (i.e., the Liquidity Provider Sliding
Scale Credit and Access Credit) is
currently defined as having at least 75%
common ownership between the two
entities as reflected on each entity’s
Form BD, Schedule A.
The Exchange now proposes to
expand the availability of the credits
under AVP. Specifically, the Exchange
proposes to allow any Market-Maker to
designate an OFP as its ‘‘Appointed
OFP’’ and any OFP to designate a
Market-Maker to be its ‘‘Appointed
Market-Maker’’ for purposes of
qualifying for credits under AVP. TPHs
would effectuate the designation by
submitting a form to the Exchange.5 The
form would need to be submitted to the
Exchange by 3:00 p.m. on the first
business day of a month in order to be
eligible to qualify for credits under AVP
for that month. The Exchange would
view transmittal of the completed form
as acceptance of such an appointment
and would only recognize one such
designation for each party once every
calendar month, which designation
would remain [sic] automatically renew
each month and remain in effect unless
or until the Exchange receives an email
from either party indicating that the
appointment has been terminated.
The Exchange notes that the proposal
would be available to all Market-Makers
and OFPs, even those who already have
an ‘‘Affiliate’’ under the current
definition. More specifically, the
proposed change would enable a
Market-Maker without an Affiliate OFP
(i.e., an OFP with at least 75% common
ownership between itself and that
Market-Maker as reflected on each
entity’s Form BD, Schedule A)—or with
an Affiliate OFP—to enter into a
relationship with an Appointed OFP.
Similarly, an OFP with or without an
Affiliate Market-Maker would be able to
enter into a relationship with an
Appointed Market-Maker. The proposed
change increases opportunities for TPHs
to qualify for credits under AVP, as it
would enable TPHs that are not
currently eligible for AVP (i.e., doesn’t
have an ‘‘Affiliate’’) to avail themselves
of AVP, as well as assist TPHs that are
currently eligible for AVP (i.e., has an
Affiliate) to potentially achieve a higher
AVP tier, thus qualifying for higher
credits. The Exchange notes that a
Market-Maker that has both an Affiliate
OFP and Appointed OFP may only
qualify based upon the volume of its
5 The Appointed Affiliate Form may be submitted
to Registration@cboe.com.
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]]>Agencies
[Federal Register Volume 81, Number 106 (Thursday, June 2, 2016)]
[Notices]
[Pages 35419-35421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-12878]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32127; 812-14399]
Ares Capital Corporation, et al.; Notice of Application
May 26, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 18(a) and 61(a) of the Act.
-----------------------------------------------------------------------
Applicants: Ares Capital Corporation (the ``Company''), Ares
Capital
[[Page 35420]]
Management LLC (the ``Adviser''), Ares Venture Finance GP LLC (the
``General Partner''), and Ares Venture Finance, L.P. (``Ares SBIC'').
SUMMARY: Summary of the Application: The Company requests an order to
permit it to adhere to a modified asset coverage requirement.
DATES: Filing Dates: The application was filed on December 12, 2014,
and amended on May 11, 2015, and May 11, 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 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 June 20, 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 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: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicants: Kipp deVeer, Chief
Executive Officer, and Joshua M. Bloomstein, General Counsel, Ares
Capital Corporation, 245 Park Avenue, 44th Floor, New York, NY 10167.
FOR FURTHER INFORMATION CONTACT: Kieran G. Brown, Senior Counsel, at
(202) 551-6773, or James M. Curtis, Branch Chief, at (202) 551-6712
(Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at https://www.sec.gov/search/search.htm or by calling (202) 551-8090.
Applicants' Representations
1. The Company, a Maryland corporation, is an externally managed,
non-diversified, closed-end management investment company that has
elected to be regulated as a business development company (``BDC'')
under the Act.\1\ The Company's investment objective is to generate
both current income and capital appreciation through debt and equity
investments. The Adviser, a Delaware limited liability company, is the
investment adviser to the Company. The Adviser is registered under the
Investment Advisers Act of 1940.
---------------------------------------------------------------------------
\1\ Section 2(a)(48) defines a BDC to be any closed-end
investment company that operates for the purpose of making
investments in securities described in section 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------
2. Ares SBIC, a Delaware limited partnership, received approval for
a license from the Small Business Administration (``SBA'') to operate
as a small business investment company (``SBIC'') under the Small
Business Investment Act of 1958 (``SBIA''). Ares SBIC is excluded from
the definition of investment company by section 3(c)(7) of the Act. The
General Partner is the sole general partner of Ares SBIC and the
Company is the sole member of the General Partner. The Company is the
sole limited partner of Ares SBIC. The Company, directly or indirectly
through the General Partner, wholly owns Ares SBIC.
Applicants' Legal Analysis
1. The Company requests an exemption pursuant to section 6(c) of
the Act from the provisions of sections 18(a) and 61(a) of the Act to
permit it to adhere to a modified asset coverage requirement with
respect to any direct or indirect wholly-owned subsidiary of the
Company that is licensed by the SBA to operate under the SBIA as an
SBIC and relies on section 3(c)(7) for an exemption from the definition
of ``investment company'' under the Act (each, an ``SBIC
Subsidiary'').\2\ Applicants state that companies operating under the
SBIA, such as the SBIC Subsidiary, are subject to the SBA's substantial
regulation of permissible leverage in their capital structure.
---------------------------------------------------------------------------
\2\ All existing entities that currently intend to rely on the
order are named as applicants. Any other existing or future entity
that may rely on the order in the future will comply with the terms
and condition of the order.
---------------------------------------------------------------------------
2. Section 18(a) of the Act prohibits a registered closed-end
investment company from issuing any class of senior security or selling
any such security of which it is the issuer unless the company complies
with the asset coverage requirements set forth in that section. Section
61(a) of the Act makes section 18 applicable to BDCs, with certain
modifications. Section 18(k) exempts an investment company operating as
an SBIC from the asset coverage requirements for senior securities
representing indebtedness that are contained in section 18(a)(1)(A) and
(B).
3. Applicants state that the Company may be required to comply with
the asset coverage requirements of section 18(a) (as modified by
section 61(a)) on a consolidated basis because the Company may be
deemed to be an indirect issuer of any class of senior security issued
by Ares SBIC or another SBIC Subsidiary. Applicants state that applying
section 18(a) (as modified by section 61(a)) on a consolidated basis
generally would require that the Company treat as its own all assets
and any liabilities held directly either by itself, by Ares SBIC, or by
another SBIC Subsidiary. Accordingly, the Company requests an order
under section 6(c) of the Act exempting the Company from the provisions
of section 18(a) (as modified by section 61(a)), such that senior
securities issued by each SBIC Subsidiary that would be excluded from
its individual asset coverage ratio by section 18(k) if it were itself
a BDC would also be excluded from the Company's consolidated asset
coverage ratio.
4. Section 6(c) of the Act, in relevant part, permits the
Commission to exempt any transaction or class of transactions from any
provision of the Act if and to the extent that such exemption is
necessary or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act. Applicants state that the requested relief
satisfies the section 6(c) standard. Applicants contend that, because
the SBIC Subsidiary would be entitled to rely on section 18(k) if it
were a BDC, there is no policy reason to deny the benefit of that
exemption to the Company.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition.
The Company will not itself issue or sell any senior security and
the Company will not cause or permit Ares SBIC or any other SBIC
Subsidiary to issue or sell any senior security of which the Company,
Ares SBIC or any other SBIC Subsidiary is the issuer except to the
extent permitted by section 18 (as modified for BDCs by section 61(a));
provided that, immediately after the issuance or sale of any such
senior security by any of the Company, Ares SBIC or any other SBIC
Subsidiary, the Company, individually and on a consolidated basis,
shall have
[[Page 35421]]
the asset coverage required by section 18(a) (as modified by section
61(a)). In determining whether the Company, Ares SBIC and any other
SBIC Subsidiary on a consolidated basis have the asset coverage
required by section 18(a) (as modified by section 61(a)), any senior
securities representing indebtedness of Ares SBIC or another SBIC
Subsidiary if that SBIC Subsidiary has issued indebtedness that is held
or guaranteed by the SBA shall not be considered senior securities and,
for purposes of the definition of ``asset coverage'' in section 18(h),
shall be treated as indebtedness not represented by senior securities.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2016-12878 Filed 6-1-16; 8:45 am]
BILLING CODE 8011-01-P
