Lord Abbett Credit Opportunities Fund, et al., 29919-29922 [2019-13414]

Download as PDF Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeBZX–2019–057 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CboeBZX–2019–057. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CboeBZX–2019–057 and should be submitted on or before July 16, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.24 Vanessa A. Countryman, Acting Secretary. khammond on DSKBBV9HB2PROD with NOTICES [FR Doc. 2019–13405 Filed 6–24–19; 8:45 am] BILLING CODE 8011–01–P 24 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 20:35 Jun 24, 2019 Jkt 247001 SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33513; File No. 812–14962] Lord Abbett Credit Opportunities Fund, et al. June 19, 2019. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of the Act for an exemption from rule 23c–3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d– 1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to permit certain registered closed-end management investment companies to issue multiple classes of shares with varying sales loads and asset-based service and/or distribution fees and to impose early withdrawal charges. APPLICANTS: Lord Abbett Credit Opportunities Fund (the ‘‘Initial Fund’’), Lord, Abbett & Co. LLC (the ‘‘Adviser’’) and Lord Abbett Distributor LLC (the ‘‘Distributor’’, and together with the Initial Fund and the Adviser, the ‘‘Applicants’’). FILING DATES: The application was filed on October 5, 2018 and amended on March 1, 2019. 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 July 15, 2019, and should be accompanied by proof of service on the 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: John T. Fitzgerald, Vice President and Assistant Secretary, 90 Hudson Street, Jersey City, NJ 07302– PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 29919 3973, and Bryan Chegwidden, Esq., Ropes & Gray LLP, 1211 Avenue of the Americas, New York, NY 10036–8704. FOR FURTHER INFORMATION CONTACT: Kyle R. Ahlgren, Senior Counsel or Aaron Gilbride, Branch Chief, 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 website by searching for the file number, or for an applicant using the Company name box, at or by calling (202) 551–8090. Applicants’ Representations 1. The Initial Fund is a Delaware statutory trust that is registered under the Act as a closed-end management investment company and will operate as a non-diversified investment company under the Act. The Initial Fund will operate as an ‘‘interval fund’’ pursuant to rule 23c–3 under the Act and intends to continuously offer its shares. 2. The Adviser is a limited liability company organized under the laws of the state of Delaware. The Adviser serves as investment adviser to the Initial Fund. The Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the ‘‘Advisers Act’’). 3. The Applicants seek an order to permit the Initial Fund to issue multiple classes of shares of beneficial interest (‘‘Shares’’) with varying sales loads and asset-based service and/or distribution fees and to impose early withdrawal charges (‘‘EWCs’’). 4. The Applicants request that the order also apply to any other registered closed-end management investment company that conducts a continuous offering of its shares, existing now or in the future, for which the Adviser, its successors, the Distributor, its successors,1 or any entity controlling, controlled by, or under common control with the Adviser or the Distributor, or any successor in interest to such entity, acts as investment adviser or principal underwriter, and which provides periodic liquidity with respect to its Shares through tender offers conducted in compliance with either rule 23c–3 under the 1940 Act or rule 13e–4 under the Securities Exchange Act of 1934, as amended (the ‘‘1934 Act’’) (each a ‘‘Future Fund’’ and, together with the 1 A successor in interest is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. E:\FR\FM\25JNN1.SGM 25JNN1 khammond on DSKBBV9HB2PROD with NOTICES 29920 Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices Initial Fund, each, a ‘‘Fund’’ and collectively, the ‘‘Funds’’). 5. The Initial Fund intends to offer its Shares on a continuous basis at net asset value per share plus the applicable sales load, if any. The Shares will not be offered or traded in a secondary market and will not be listed on any securities exchange or quoted on any quotation medium. 6. The Initial Fund will initially issue a single class of Shares (the ‘‘Initial Class Shares’’), but may offer investors multiple classes of Shares in the future, with each class of Shares having its own fee and expense structure. Under the proposal, the Initial Class Shares would be an Institutional Share class and would be offered at net asset value per share. A new Share class (the ‘‘New Class’’) would be offered at net asset value and may (but would not necessarily) be subject to a front-end sales load, an annual asset-based service and/or distribution fee and/or an EWC. Prior to introducing a Share class that charges distribution and/or service fees, the Initial Fund intends to adopt a distribution and service plan in voluntary compliance with rules 12b–1 and 17d–3 under the Act, as if those rules applied to closed-end management investment companies (a ‘‘Distribution and Service Plan’’). 7. From time to time, the Board of a Fund may create and offer additional classes of shares, or may vary the characteristics described above of Initial Class and New Class Shares, including without limitation: (i) The amount of fees permitted by a Distribution and Service Plan as to such class; (ii) voting rights with respect to a Distribution and Service Plan as to such class; (iii) different class designations; (iv) the impact of any class expenses directly attributable to a particular class of Shares allocated on a class basis as described in the Application; (v) differences in any dividends and net asset values per Share resulting from differences in fees under a Distribution and Service Plan or in class expenses; (vi) any EWC or other sales load structure; and (vii) any exchange or conversion features, in each case, as permitted under the Act. Each Fund will comply with the provisions of rule 18f–3 under the Act, as if it were an open-end management investment company. 8. The Initial Fund will be operated as an ‘‘interval fund’’ and make quarterly offers to repurchase between 5% and 25% of its outstanding Shares at net asset value per share, pursuant to rule 23c–3 under the Act, unless such offer is suspended or postponed in VerDate Sep<11>2014 20:35 Jun 24, 2019 Jkt 247001 accordance with regulatory requirements. 9. Under the proposal, each class of Shares would comply with the provisions of rule 12b–1 under the Act, or any successor thereto or replacement rules, as if that rule applied to closedend management investment companies, and with the provisions of rule 2341 of the Rules of the Financial Industry Regulatory Authority (‘‘FINRA’’), as such rule may be amended, or any successor rule thereto (‘‘FINRA Rule 2341’’) as if it applied to the Fund issuing such Shares. Applicants represent that each Fund will disclose in its prospectus the fees, expenses and other characteristics of each class of Shares offered for sale by the prospectus, as is required for openend, multiple class funds under Form N–1A. As if it were an open-end management investment company, each Fund will disclose fund expenses borne by shareholders during the reporting period in shareholder reports and describe in its prospectus any arrangements that result in breakpoints in, or elimination of, sales loads. Each Fund will include any such disclosures in its shareholder reports and prospectus to the extent required as if the Fund were an open-end fund. Each Fund will comply with the provisions of rule 18f–3 under the Act, as if it were an open-end management investment company. 10. Applicants represent that each Fund and the Distributor will also comply with any requirements that may be adopted by the Commission or FINRA regarding disclosure at the point of sale and in transaction confirmations about the costs and conflicts of interest arising out of the distribution of openend investment company shares, and regarding prospectus disclosure of sales loads and revenue sharing arrangements as if those requirements applied to the Fund and the Distributor. Applicants further represent that each Fund or the Distributor will contractually require that any other distributor of the Fund’s Shares comply with such requirements in connection with the distribution of Shares of the Fund. 11. If a Fund charges a repurchase fee, Shares of the Fund will be subject to a repurchase fee at a rate of no greater than 2.00% of the shareholder’s repurchase proceeds if the interval between the date of purchase of the Shares and the valuation date with respect to the repurchase of those Shares is less than one year. Repurchase fees, if charged, will equally apply to New Class Shares and to all classes of Shares of the Fund, consistent with section 18 of the Act and rule 18f–3 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 thereunder. To the extent that a Fund determines to waive, impose scheduled variations of, or eliminate a repurchase fee, it will do so consistently with the requirements of rule 22d–1 under the Act as if the repurchase fee were a contingent deferred sales load (‘‘CDSL’’) and as if the Fund were a registered open-end investment company and the Fund’s waiver of, scheduled variation in, or elimination of, the repurchase fee will apply uniformly to all shareholders of the Fund regardless of class. 12. The Initial Fund does not intend to, but a Fund may, offer its shareholders an exchange feature under which the shareholders of the Fund may, in connection with the Fund’s periodic repurchase offers, exchange their Shares of the Fund for shares of the same class of (i) registered open-end investment companies or (ii) other registered closed-end investment companies that comply with rule 23c– 3 under the Act and continuously offer their shares at net asset value, that are in the Fund’s group of investment companies (collectively, the ‘‘Other Funds’’). Shares of a Fund operating pursuant to rule 23c–3 that are exchanged for shares of Other Funds will be included as part of the repurchase offer amount for such Fund as specified in rule 23c–3 under the Act. Any exchange option will comply with rule 11a–3 under the Act, as if the Fund was an open-end investment company subject to rule 11a–3. In complying with rule 11a–3 under the Act, each Fund will treat an EWC as if it were a CDSL. Applicants’ Legal Analysis Multiple Classes of Shares 1. Section 18(a)(2) of the Act provides that a closed-end investment company may not issue or sell a senior security that is a stock unless certain requirements are met. Applicants state that the creation of multiple classes of shares of a Fund may violate section 18(a)(2) because the Fund may not meet such requirements with respect to a class of shares that may be a senior security. 2. Section 18(c) of the Act provides, in relevant part, that a closed-end investment company may not issue or sell any senior security if, immediately thereafter, the company has outstanding more than one class of senior security. Applicants state that the proposed multiple class system may be prohibited by section 18(c), as a class may have priority over another class as to payment of dividends because shareholders of different classes would pay different fees and expenses. E:\FR\FM\25JNN1.SGM 25JNN1 Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices 3. Section 18(i) of the Act provides that each share of stock issued by a registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants state that the proposed multiple class system may violate section 18(i) of the Act because each class would be entitled to exclusive voting rights with respect to matters solely related to that class. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction or any class or classes of persons, securities or transactions from any provision of the Act, or from any rule or regulation under the Act, if and to the extent 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 request an exemption under section 6(c) from sections 18(a)(2), 18(c) and 18(i) to permit the Funds to issue multiple classes of shares. 5. Applicants submit that the proposed allocation of expenses relating to distribution and voting rights among multiple classes is equitable and will not discriminate against any group or class of shareholders. Applicants submit that the proposed arrangements would permit a Fund to facilitate the distribution of Shares and provide investors with a broader choice of shareholder options. Applicants assert that the proposed multiple class structure does not raise the concerns underlying section 18 of the Act to any greater degree than open-end investment companies’ multiple class structures that are permitted by rule 18f–3 under the Act. Applicants state that each Fund will comply with the provisions of rule 18f–3 as if it were an open-end investment company. khammond on DSKBBV9HB2PROD with NOTICES Early Withdrawal Charges 1. Section 23(c) of the Act provides, in relevant part, that no registered closed-end investment company shall purchase securities of which it is the issuer, except: (a) On a securities exchange or other open market; (b) pursuant to tenders, after reasonable opportunity to submit tenders given to all holders of securities of the class to be purchased; or (c) under other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors. 2. Rule 23c–3 under the Act permits an ‘‘interval fund’’ to make repurchase offers of between five and twenty-five percent of its outstanding shares at net VerDate Sep<11>2014 20:35 Jun 24, 2019 Jkt 247001 asset value at periodic intervals pursuant to a fundamental policy of the interval fund. Rule 23c–3(b)(1) under the Act permits an interval fund to deduct from repurchase proceeds only a repurchase fee, not to exceed two percent of the proceeds, that is paid to the interval fund and is reasonably intended to compensate the fund for expenses directly related to the repurchase. 3. Section 23(c)(3) provides that the Commission may issue an order that would permit a closed-end investment company to repurchase its shares in circumstances in which the repurchase is made in a manner or on a basis that does not unfairly discriminate against any holders of the class or classes of securities to be purchased. 4. Applicants request relief under section 6(c), discussed above, and section 23(c)(3) from rule 23c–3 to the extent necessary for the Funds to impose EWCs on shares of the Funds submitted for repurchase that have been held for less than a specified period. 5. Applicants state that the EWCs they intend to impose are functionally similar to CDSLs imposed by open-end investment companies under rule 6c–10 under the Act. Rule 6c–10 permits openend investment companies to impose CDSLs, subject to certain conditions. Applicants note that rule 6c–10 is grounded in policy considerations supporting the employment of CDSLs where there are adequate safeguards for the investor and state that the same policy considerations support imposition of EWCs in the interval fund context. In addition, applicants state that EWCs may be necessary for the distributor to recover distribution costs. Applicants represent that any EWC imposed by the Funds will comply with rule 6c–10 under the Act as if the rule were applicable to closed-end investment companies. The Funds will disclose EWCs in accordance with the requirements of Form N–1A concerning CDSLs. Asset-Based Distribution and/or Service Fees 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit an affiliated person of a registered investment company, or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 29921 17(d) and rule 17d–1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants. 2. Rule 17d–3 under the Act provides an exemption from section 17(d) and rule 17d–1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b–1 under the Act. Applicants request an order under section 17(d) and rule 17d–1 under the Act to the extent necessary to permit a Fund to impose asset-based distribution and/or service fees. Applicants have agreed to comply with rules 12b–1 and 17d–3 as if those rules applied to closed-end investment companies, which they believe will resolve any concerns that might arise in connection with a Fund financing the distribution of its shares through assetbased distribution fees. 3. For the reasons stated above, applicants submit that the exemptions requested under section 6(c) are necessary and appropriate in the public interest and are consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants further submit that the relief requested pursuant to section 23(c)(3) will be consistent with the protection of investors and will insure that applicants do not unfairly discriminate against any holders of the class of securities to be purchased. Finally, applicants state that the Funds’ imposition of asset-based distribution and/or service fees is consistent with the provisions, policies and purposes of the Act and does not involve participation on a basis different from or less advantageous than that of other participants. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: Each Fund relying on the order will comply with the provisions of rules 6c– 10, 12b–1, 17d–3, 18f–3, 22d–1, and, where applicable, 11a–3 under the Act, as amended from time to time, as if those rules applied to closed-end management investment companies, and will comply with the FINRA Rule 2341, as amended from time to time, as if that rule applied to all closed-end management investment companies. E:\FR\FM\25JNN1.SGM 25JNN1 29922 Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices For the Commission, by the Division of Investment Management, under delegated authority. Vanessa A. Countryman, Acting Secretary. [FR Doc. 2019–13414 Filed 6–24–19; 8:45 am] BILLING CODE 8011–01–P the most significant aspects of such statements. to buy and sell options to the benefit of all market participants. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,7 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the Penny Pilot Program, the proposed rule change will allow for further analysis of the Penny Pilot Program and a determination of how the Penny Pilot Program should be structured in the future. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86147; File No. SR–MRX– 2019–13] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot Program June 19, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 14, 2019, Nasdaq MRX, LLC (‘‘MRX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II, 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 its rules to extend a pilot program to quote and to trade certain options classes in penny increments (‘‘Penny Pilot Program’’ or ‘‘Penny Pilot’’). The text of the proposed rule change is available on the Exchange’s website at https://nasdaqmrx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. khammond on DSKBBV9HB2PROD with NOTICES 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 20:35 Jun 24, 2019 Jkt 247001 Under the Penny Pilot Program, the minimum price variation for all participating options classes, except for the Nasdaq-100 Index Tracking Stock (‘‘QQQQ’’), the SPDR S&P 500 Exchange Traded Fund (‘‘SPY’’) and the iShares Russell 2000 Index Fund (‘‘IWM’’), is $0.01 for all quotations in options series that are quoted at less than $3 per contract and $0.05 for all quotations in options series that are quoted at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 increments for all options series. The Penny Pilot Program is currently scheduled to expire on June 30, 2019.3 The Exchange proposes to extend the Penny Pilot Program through December 31, 2019.4 This filing does not propose any substantive changes to the Penny Pilot Program: all classes currently participating will remain the same and all minimum increments will remain unchanged. The Exchange believes the benefits to public customers and other market participants who will be able to express their true prices to buy and sell options have been demonstrated to outweigh any increase in quote traffic. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.5 Specifically, the proposed rule change is consistent with Section 6(b)(5) of the Act,6 because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. In particular, the proposed rule change, which extends the Penny Pilot Program for an additional six months, will enable public customers and other market participants to express their true prices 3 See Exchange Act Release No. 84959 (December 26, 2018), 84 FR 836 (January 31, 2019) (SR–MRX– 2018–41). 4 See Supplementary Material .01 to Rule 710. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 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 prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6)(iii) thereunder.11 A proposed rule change filed under Rule 19b–4(f)(6) 12 normally does not become operative prior to 30 days after the date of the filing. However, pursuant 7 15 U.S.C. 78f(b)(8). U.S.C. 78s(b)(3)(A)(iii). 9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. The Exchange has satisfied this requirement. 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6)(iii). 12 17 CFR 240.19b–4(f)(6). 8 15 E:\FR\FM\25JNN1.SGM 25JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 122 (Tuesday, June 25, 2019)]
[Notices]
[Pages 29919-29922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13414]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33513; File No. 812-14962]


Lord Abbett Credit Opportunities Fund, et al.

June 19, 2019.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from sections 
18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of 
the Act for an exemption from rule 23c-3 under the Act, and for an 
order pursuant to section 17(d) of the Act and rule 17d-1 under the 
Act.

Summary of Application:  Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of shares with varying sales loads and asset-based service and/
or distribution fees and to impose early withdrawal charges.

Applicants:  Lord Abbett Credit Opportunities Fund (the ``Initial 
Fund''), Lord, Abbett & Co. LLC (the ``Adviser'') and Lord Abbett 
Distributor LLC (the ``Distributor'', and together with the Initial 
Fund and the Adviser, the ``Applicants'').

Filing Dates:  The application was filed on October 5, 2018 and amended 
on March 1, 2019.

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 July 15, 2019, and should be accompanied by proof of 
service on the 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: John T. Fitzgerald, 
Vice President and Assistant Secretary, 90 Hudson Street, Jersey City, 
NJ 07302-3973, and Bryan Chegwidden, Esq., Ropes & Gray LLP, 1211 
Avenue of the Americas, New York, NY 10036-8704.

FOR FURTHER INFORMATION CONTACT: Kyle R. Ahlgren, Senior Counsel or 
Aaron Gilbride, Branch Chief, 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 website by searching for the file number, or for an 
applicant using the Company name box, at or by calling (202) 551-8090.

Applicants' Representations

    1. The Initial Fund is a Delaware statutory trust that is 
registered under the Act as a closed-end management investment company 
and will operate as a non-diversified investment company under the Act. 
The Initial Fund will operate as an ``interval fund'' pursuant to rule 
23c-3 under the Act and intends to continuously offer its shares.
    2. The Adviser is a limited liability company organized under the 
laws of the state of Delaware. The Adviser serves as investment adviser 
to the Initial Fund. The Adviser is registered with the Commission as 
an investment adviser under the Investment Advisers Act of 1940, as 
amended (the ``Advisers Act'').
    3. The Applicants seek an order to permit the Initial Fund to issue 
multiple classes of shares of beneficial interest (``Shares'') with 
varying sales loads and asset-based service and/or distribution fees 
and to impose early withdrawal charges (``EWCs'').
    4. The Applicants request that the order also apply to any other 
registered closed-end management investment company that conducts a 
continuous offering of its shares, existing now or in the future, for 
which the Adviser, its successors, the Distributor, its successors,\1\ 
or any entity controlling, controlled by, or under common control with 
the Adviser or the Distributor, or any successor in interest to such 
entity, acts as investment adviser or principal underwriter, and which 
provides periodic liquidity with respect to its Shares through tender 
offers conducted in compliance with either rule 23c-3 under the 1940 
Act or rule 13e-4 under the Securities Exchange Act of 1934, as amended 
(the ``1934 Act'') (each a ``Future Fund'' and, together with the

[[Page 29920]]

Initial Fund, each, a ``Fund'' and collectively, the ``Funds'').
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    \1\ A successor in interest is limited to an entity that results 
from a reorganization into another jurisdiction or a change in the 
type of business organization.
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    5. The Initial Fund intends to offer its Shares on a continuous 
basis at net asset value per share plus the applicable sales load, if 
any. The Shares will not be offered or traded in a secondary market and 
will not be listed on any securities exchange or quoted on any 
quotation medium.
    6. The Initial Fund will initially issue a single class of Shares 
(the ``Initial Class Shares''), but may offer investors multiple 
classes of Shares in the future, with each class of Shares having its 
own fee and expense structure. Under the proposal, the Initial Class 
Shares would be an Institutional Share class and would be offered at 
net asset value per share. A new Share class (the ``New Class'') would 
be offered at net asset value and may (but would not necessarily) be 
subject to a front-end sales load, an annual asset-based service and/or 
distribution fee and/or an EWC. Prior to introducing a Share class that 
charges distribution and/or service fees, the Initial Fund intends to 
adopt a distribution and service plan in voluntary compliance with 
rules 12b-1 and 17d-3 under the Act, as if those rules applied to 
closed-end management investment companies (a ``Distribution and 
Service Plan'').
    7. From time to time, the Board of a Fund may create and offer 
additional classes of shares, or may vary the characteristics described 
above of Initial Class and New Class Shares, including without 
limitation: (i) The amount of fees permitted by a Distribution and 
Service Plan as to such class; (ii) voting rights with respect to a 
Distribution and Service Plan as to such class; (iii) different class 
designations; (iv) the impact of any class expenses directly 
attributable to a particular class of Shares allocated on a class basis 
as described in the Application; (v) differences in any dividends and 
net asset values per Share resulting from differences in fees under a 
Distribution and Service Plan or in class expenses; (vi) any EWC or 
other sales load structure; and (vii) any exchange or conversion 
features, in each case, as permitted under the Act. Each Fund will 
comply with the provisions of rule 18f-3 under the Act, as if it were 
an open-end management investment company.
    8. The Initial Fund will be operated as an ``interval fund'' and 
make quarterly offers to repurchase between 5% and 25% of its 
outstanding Shares at net asset value per share, pursuant to rule 23c-3 
under the Act, unless such offer is suspended or postponed in 
accordance with regulatory requirements.
    9. Under the proposal, each class of Shares would comply with the 
provisions of rule 12b-1 under the Act, or any successor thereto or 
replacement rules, as if that rule applied to closed-end management 
investment companies, and with the provisions of rule 2341 of the Rules 
of the Financial Industry Regulatory Authority (``FINRA''), as such 
rule may be amended, or any successor rule thereto (``FINRA Rule 
2341'') as if it applied to the Fund issuing such Shares. Applicants 
represent that each Fund will disclose in its prospectus the fees, 
expenses and other characteristics of each class of Shares offered for 
sale by the prospectus, as is required for open-end, multiple class 
funds under Form N-1A. As if it were an open-end management investment 
company, each Fund will disclose fund expenses borne by shareholders 
during the reporting period in shareholder reports and describe in its 
prospectus any arrangements that result in breakpoints in, or 
elimination of, sales loads. Each Fund will include any such 
disclosures in its shareholder reports and prospectus to the extent 
required as if the Fund were an open-end fund. Each Fund will comply 
with the provisions of rule 18f-3 under the Act, as if it were an open-
end management investment company.
    10. Applicants represent that each Fund and the Distributor will 
also comply with any requirements that may be adopted by the Commission 
or FINRA regarding disclosure at the point of sale and in transaction 
confirmations about the costs and conflicts of interest arising out of 
the distribution of open-end investment company shares, and regarding 
prospectus disclosure of sales loads and revenue sharing arrangements 
as if those requirements applied to the Fund and the Distributor. 
Applicants further represent that each Fund or the Distributor will 
contractually require that any other distributor of the Fund's Shares 
comply with such requirements in connection with the distribution of 
Shares of the Fund.
    11. If a Fund charges a repurchase fee, Shares of the Fund will be 
subject to a repurchase fee at a rate of no greater than 2.00% of the 
shareholder's repurchase proceeds if the interval between the date of 
purchase of the Shares and the valuation date with respect to the 
repurchase of those Shares is less than one year. Repurchase fees, if 
charged, will equally apply to New Class Shares and to all classes of 
Shares of the Fund, consistent with section 18 of the Act and rule 18f-
3 thereunder. To the extent that a Fund determines to waive, impose 
scheduled variations of, or eliminate a repurchase fee, it will do so 
consistently with the requirements of rule 22d-1 under the Act as if 
the repurchase fee were a contingent deferred sales load (``CDSL'') and 
as if the Fund were a registered open-end investment company and the 
Fund's waiver of, scheduled variation in, or elimination of, the 
repurchase fee will apply uniformly to all shareholders of the Fund 
regardless of class.
    12. The Initial Fund does not intend to, but a Fund may, offer its 
shareholders an exchange feature under which the shareholders of the 
Fund may, in connection with the Fund's periodic repurchase offers, 
exchange their Shares of the Fund for shares of the same class of (i) 
registered open-end investment companies or (ii) other registered 
closed-end investment companies that comply with rule 23c-3 under the 
Act and continuously offer their shares at net asset value, that are in 
the Fund's group of investment companies (collectively, the ``Other 
Funds''). Shares of a Fund operating pursuant to rule 23c-3 that are 
exchanged for shares of Other Funds will be included as part of the 
repurchase offer amount for such Fund as specified in rule 23c-3 under 
the Act. Any exchange option will comply with rule 11a-3 under the Act, 
as if the Fund was an open-end investment company subject to rule 11a-
3. In complying with rule 11a-3 under the Act, each Fund will treat an 
EWC as if it were a CDSL.

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(a)(2) of the Act provides that a closed-end 
investment company may not issue or sell a senior security that is a 
stock unless certain requirements are met. Applicants state that the 
creation of multiple classes of shares of a Fund may violate section 
18(a)(2) because the Fund may not meet such requirements with respect 
to a class of shares that may be a senior security.
    2. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the proposed multiple 
class system may be prohibited by section 18(c), as a class may have 
priority over another class as to payment of dividends because 
shareholders of different classes would pay different fees and 
expenses.

[[Page 29921]]

    3. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that the proposed multiple class system may 
violate section 18(i) of the Act because each class would be entitled 
to exclusive voting rights with respect to matters solely related to 
that class.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security or transaction or any class or classes of persons, 
securities or transactions from any provision of the Act, or from any 
rule or regulation under the Act, if and to the extent 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 request an exemption under 
section 6(c) from sections 18(a)(2), 18(c) and 18(i) to permit the 
Funds to issue multiple classes of shares.
    5. Applicants submit that the proposed allocation of expenses 
relating to distribution and voting rights among multiple classes is 
equitable and will not discriminate against any group or class of 
shareholders. Applicants submit that the proposed arrangements would 
permit a Fund to facilitate the distribution of Shares and provide 
investors with a broader choice of shareholder options. Applicants 
assert that the proposed multiple class structure does not raise the 
concerns underlying section 18 of the Act to any greater degree than 
open-end investment companies' multiple class structures that are 
permitted by rule 18f-3 under the Act. Applicants state that each Fund 
will comply with the provisions of rule 18f-3 as if it were an open-end 
investment company.

Early Withdrawal Charges

    1. Section 23(c) of the Act provides, in relevant part, that no 
registered closed-end investment company shall purchase securities of 
which it is the issuer, except: (a) On a securities exchange or other 
open market; (b) pursuant to tenders, after reasonable opportunity to 
submit tenders given to all holders of securities of the class to be 
purchased; or (c) under other circumstances as the Commission may 
permit by rules and regulations or orders for the protection of 
investors.
    2. Rule 23c-3 under the Act permits an ``interval fund'' to make 
repurchase offers of between five and twenty-five percent of its 
outstanding shares at net asset value at periodic intervals pursuant to 
a fundamental policy of the interval fund. Rule 23c-3(b)(1) under the 
Act permits an interval fund to deduct from repurchase proceeds only a 
repurchase fee, not to exceed two percent of the proceeds, that is paid 
to the interval fund and is reasonably intended to compensate the fund 
for expenses directly related to the repurchase.
    3. Section 23(c)(3) provides that the Commission may issue an order 
that would permit a closed-end investment company to repurchase its 
shares in circumstances in which the repurchase is made in a manner or 
on a basis that does not unfairly discriminate against any holders of 
the class or classes of securities to be purchased.
    4. Applicants request relief under section 6(c), discussed above, 
and section 23(c)(3) from rule 23c-3 to the extent necessary for the 
Funds to impose EWCs on shares of the Funds submitted for repurchase 
that have been held for less than a specified period.
    5. Applicants state that the EWCs they intend to impose are 
functionally similar to CDSLs imposed by open-end investment companies 
under rule 6c-10 under the Act. Rule 6c-10 permits open-end investment 
companies to impose CDSLs, subject to certain conditions. Applicants 
note that rule 6c-10 is grounded in policy considerations supporting 
the employment of CDSLs where there are adequate safeguards for the 
investor and state that the same policy considerations support 
imposition of EWCs in the interval fund context. In addition, 
applicants state that EWCs may be necessary for the distributor to 
recover distribution costs. Applicants represent that any EWC imposed 
by the Funds will comply with rule 6c-10 under the Act as if the rule 
were applicable to closed-end investment companies. The Funds will 
disclose EWCs in accordance with the requirements of Form N-1A 
concerning CDSLs.

Asset-Based Distribution and/or Service Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company, or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to the extent necessary to permit a Fund to impose asset-based 
distribution and/or service fees. Applicants have agreed to comply with 
rules 12b-1 and 17d-3 as if those rules applied to closed-end 
investment companies, which they believe will resolve any concerns that 
might arise in connection with a Fund financing the distribution of its 
shares through asset-based distribution fees.
    3. For the reasons stated above, applicants submit that the 
exemptions requested under section 6(c) are necessary and appropriate 
in the public interest and are consistent with the protection of 
investors and the purposes fairly intended by the policy and provisions 
of the Act. Applicants further submit that the relief requested 
pursuant to section 23(c)(3) will be consistent with the protection of 
investors and will insure that applicants do not unfairly discriminate 
against any holders of the class of securities to be purchased. 
Finally, applicants state that the Funds' imposition of asset-based 
distribution and/or service fees is consistent with the provisions, 
policies and purposes of the Act and does not involve participation on 
a basis different from or less advantageous than that of other 
participants.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Each Fund relying on the order will comply with the provisions of 
rules 6c-10, 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3 
under the Act, as amended from time to time, as if those rules applied 
to closed-end management investment companies, and will comply with the 
FINRA Rule 2341, as amended from time to time, as if that rule applied 
to all closed-end management investment companies.


[[Page 29922]]


    For the Commission, by the Division of Investment Management, 
under delegated authority.
Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13414 Filed 6-24-19; 8:45 am]
 BILLING CODE 8011-01-P

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