Goldman Sachs Real Estate Diversified Income Fund, et al., 2465-2468 [2020-00451]

Download as PDF Federal Register / Vol. 85, No. 10 / Wednesday, January 15, 2020 / Notices NMS feeds at no additional charge. By offering the NMS network as part of these existing services, the Exchange proposes to offer an additional choice to such Users for how they could connect to the NMS feeds. By not charging any different fees for such expanded service, all Users will be treated equally and no differently than how fees are currently charged for a 10 Gb or 40 Gb connection to a local area network service. For the reasons above, the proposed changes would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition jbell on DSKJLSW7X2PROD with NOTICES The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change would not impose any burden on competition because it is not designed to address any competitive issues. As described above, SIAC is the single plan processor for Tape A and B equities securities and all options securities and does not currently compete with any other providers for these processor services. The proposed rule change would amend the services available in co-location to include the NMS network when a User purchases a 10 Gb or 40 Gb connection to access either local area network service. Accordingly, the proposed rule change would expand the services available in co-location without changing any fees for the existing services, or adding fees for the expanded services. All Users would have access to the NMS network and it would be their choice of whether and at what level to subscribe to such services, including whether to utilize the NMS network connection. Accordingly, the Exchange does not believe that the proposed rule change would place any User at a relative disadvantage compared to other Users. 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. VerDate Sep<11>2014 17:18 Jan 14, 2020 Jkt 250001 III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods: 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– NYSENAT–2019–19 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–NYSENAT–2019–19. 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–NYSENAT–2019–19 and should be submitted on or before February 5, 2020. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 2465 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–00485 Filed 1–14–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33743; 812–15081] Goldman Sachs Real Estate Diversified Income Fund, et al. January 9, 2020. 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 and to impose assetbased service and distribution fees, and early withdrawal charges (‘‘EWCs’’). APPLICANTS: Goldman Sachs Real Estate Diversified Income Fund and Goldman Sachs Credit Income Fund (the ‘‘Initial Funds’’), Goldman Sachs Asset Management, LP (the ‘‘Adviser’’), and Goldman Sachs & Co. LLC (the ‘‘Distributor’’). FILING DATES: The application was filed on December 11, 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 February 3, 2020, 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 29 17 E:\FR\FM\15JAN1.SGM CFR 200.30–3(a)(12). 15JAN1 2466 Federal Register / Vol. 85, No. 10 / Wednesday, January 15, 2020 / Notices 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: 200 West Street, New York, NY 10282. FOR FURTHER INFORMATION CONTACT: Edward J. Rubenstein, Senior Special Counsel, at (202) 551–6854, or Kaitlin C. Bottock, 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 https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. jbell on DSKJLSW7X2PROD with NOTICES Applicants’ Representations 1. The Goldman Sachs Real Estate Diversified Income Fund (the ‘‘GS Real Estate Fund’’) is a Delaware statutory trust that is registered under the Act and will operate as a diversified, closed-end management investment company. The GS Real Estate Fund will operate as an ‘‘interval fund’’ pursuant to rule 23c–3 under the Act and intends to continuously offer its shares. 2. The Goldman Sachs Credit Income Fund (the ‘‘GS Credit Fund’’) is a Delaware statutory trust that is registered under the Act and will operate as a diversified closed-end management investment company. The GS Credit Fund will operate as an ‘‘interval fund’’ pursuant to rule 23c–3 under the Act and intends to continuously offer its shares. 3. The Adviser is a Delaware limited liability partnership registered as an investment adviser under the Investment Advisers Act of 1940. The Adviser will serve as investment adviser to the Initial Funds. 4. The Distributor is registered with the Commission as a broker-dealer under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), and will act as the distributor of the Initial Funds. 5. Applicants seek an order to permit the Initial Funds to issue multiple classes of shares, each having its own fee and expense structure, and to impose asset-based distribution and service fees, and EWCs. 6. Applicants request that the order also apply to any continuously offered registered closed-end management investment company that has been previously organized or that may be VerDate Sep<11>2014 17:18 Jan 14, 2020 Jkt 250001 organized in the future for which the Adviser or the Distributor or any entity controlling, controlled by, or under common control with the Adviser or the Distributor, or any successor in interest to any such entity,1 acts as investment adviser or principal underwriter, respectively, and which operates as an interval fund pursuant to rule 23c–3 under the Act or provides periodic liquidity with respect to its shares pursuant to rule 13e–4 under the Exchange Act (each, a ‘‘Future Fund’’ and together with the Initial Fund, the ‘‘Funds’’).2 7. Each Initial Fund will make a continuous public offering of its shares. Applicants state that additional offerings by any Fund relying on the order may be on a private placement or public offering basis. Shares of the Funds will not be listed on any securities exchange, nor quoted on any quotation medium. The Funds do not expect there to be a secondary trading market for their shares. 8. If the requested relief is granted, the GS Real Estate Fund expects to offer at least eight classes of shares and the GS Credit Fund expects to offer at least five classes of shares. The Initial Funds may also offer additional classes of shares in the future, with each class having its own fee and expense structure. 9. Applicants state that, from time to time, the Funds may create additional classes of shares, the terms of which may differ from the initial class pursuant to and in compliance with rule 18f–3 under the Act. 10. Applicants state that shares of a Fund may be subject to a repurchase fee at a rate of no greater than 2% 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. Any repurchase fee will apply equally to all classes of shares of a Fund, consistent with section 18 of the Act and rule 18f–3 thereunder. Further, applicants represent that to the extent a Fund determines to waive, impose scheduled variations of, or eliminate any repurchase fee, it will do so consistently with the requirements of rule 22d–1 under the Act as if the repurchase fee were a CDSL (defined below) and as if the Fund were an open-end investment 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. 2 Any Fund relying on this relief in the future will do so in compliance with the terms and conditions of the application. Applicants represent that each entity presently intending to rely on the requested relief is listed as an applicant. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 company and the Fund’s waiver of, scheduled variation in, or elimination of, any such repurchase fee will apply uniformly to all shareholders of the Fund regardless of class. 11. Applicants state that the Initial Funds will adopt a fundamental policy to repurchase a specified percentage of its shares (no less than 5% and not more than 25%) at net asset value on a periodic basis. Such repurchase offers will be conducted pursuant to rule 23c– 3 under the Act.3 Each Future Fund will likewise adopt a fundamental investment policy in compliance with rule 23c–3 and make periodic repurchase offers to its shareholders, or provide periodic liquidity with respect to its shares pursuant to rule 13e–4 under the Exchange Act. Any repurchase offers made by the Funds will be made to all holders of shares of each such Fund. 12. Applicants represent that any asset-based service and/or distribution fees for each class of shares will comply with the provisions of FINRA Rule 2341 (‘‘Sales Charge Rule’’).4 Applicants also 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 is required for open-end funds, each Fund will disclose its expenses in shareholder reports, and describe any arrangements that result in breakpoints in or elimination of sales loads in its prospectus.5 In addition, applicants will comply with applicable enhanced fee disclosure requirements for fund of funds, including registered funds of hedge funds.6 13. Each of the Funds will comply with any requirements that the 3 Applicants submit that rule 23c–3 and Regulation M under the Exchange Act permit an interval fund to make repurchase offers to repurchase its shares while engaging in a continuous offering of its shares pursuant to rule 415 under the Securities Act of 1933. 4 Any reference to the Sales Charge Rule includes any successor or replacement rule that may be adopted by the Financial Industry Regulatory Authority (‘‘FINRA’’). 5 See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies, Investment Company Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring open-end investment companies to disclose fund expenses in shareholder reports); and Disclosure of Breakpoint Discounts by Mutual Funds, Investment Company Act Release No. 26464 (June 7, 2004) (adopting release) (requiring open-end investment companies to provide prospectus disclosure of certain sales load information). 6 Fund of Funds Investments, Investment Company Act Rel. Nos. 26198 (Oct. 1, 2003) (proposing release) and 27399 (Jun. 20, 2006) (adopting release). See also Rules 12d1–1, et seq. of the Act. E:\FR\FM\15JAN1.SGM 15JAN1 Federal Register / Vol. 85, No. 10 / Wednesday, January 15, 2020 / Notices Commission or FINRA may adopt 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 each Fund. In addition, each Fund will contractually require that any distributor of the Fund’s shares comply with such requirements in connection with the distribution of such Fund’s shares. 14. Applicants state that each Fund may impose an EWC on shares submitted for repurchase that have been held less than a specified period and may waive the EWC for certain categories of shareholders or transactions to be established from time to time. Applicants state that each of the Funds will apply the EWC (and any waivers or scheduled variations of the EWC) uniformly to all shareholders in a given class and consistently with the requirements of rule 22d–1 under the Act as if the Funds were open-end investment companies. 15. Each Fund operating as an interval fund pursuant to rule 23c–3 under the Act 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, ‘‘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 amount 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 were an open-end investment company subject to rule 11a–3. In complying with rule 11a–3, each Fund will treat an EWC as if it were a contingent deferred sales load (‘‘CDSL’’). jbell on DSKJLSW7X2PROD with NOTICES Applicants’ Legal Analysis Multiple Classes of Shares 1. Section 18(a)(2) of the Act makes it unlawful for a closed-end investment company to issue a senior security that is a stock unless certain requirements are met. Applicants state that the creation of multiple classes of shares of VerDate Sep<11>2014 17:18 Jan 14, 2020 Jkt 250001 the Funds may violate section 18(a)(2) because the Funds 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 registered closedend 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 creation of multiple classes of Shares of a Fund proposed herein may result in Shares of a class having ‘‘priority over [another] class as to . . . payment of dividends,’’ and being deemed a ‘‘senior security,’’ because shareholders of different classes may pay different distribution fees, different shareholder services fees, and any other expense. Accordingly, applicants state that the creation of multiple classes of Shares of a Fund with different fees and expenses may be prohibited by section 18(c). 3. Section 18(i) of the Act provides, in relevant part, 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 multiple classes of shares of the Funds 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 its securities and provide investors with a broader choice of shareholder services. Applicants assert that the proposed closed-end investment company 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 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 2467 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 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 E:\FR\FM\15JAN1.SGM 15JAN1 2468 Federal Register / Vol. 85, No. 10 / Wednesday, January 15, 2020 / Notices jbell on DSKJLSW7X2PROD with NOTICES 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 Service and Distribution 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 the Funds to impose asset-based service and distribution 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 service and 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 service and distribution fees is consistent with the provisions, policies, and purposes of the Act and does not VerDate Sep<11>2014 17:18 Jan 14, 2020 Jkt 250001 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 Sales Charge Rule, as amended from time to time, as if that rule applied to all closed-end management investment companies. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–00451 Filed 1–14–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87927; File No. SR–NYSE– 2019–46) Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 to Proposed Rule Change Amending the Exchange’s Price List Related to CoLocation Services in the Mahwah, New Jersey Data Center January 9, 2020. On August 22, 2019, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘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 its co-location fee schedule to offer co-location Users 3 access to the ‘‘NMS Network’’—an alternate, dedicated network providing connectivity to data feeds for the National Market System Plans for which Securities Industry Automation Corporation (‘‘SIAC’’) is engaged as the exclusive securities information processor (‘‘SIP’’)—and establish associated fees. The proposed rule change was published for comment in the Federal Register on September 10, 2019.4 On October 24, 2019, the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See infra note 9 defining ‘‘Users.’’ 4 See Securities Exchange Act Release Nos. 86865 (September 4, 2019), 84 FR 47592. 2 17 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 Commission extended the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change, to December 9, 2019.5 The Commission received one comment letter on the proposal, a response from the Exchanges, and a subsequent letter from the original commenter.6 On December 9, 2019, the Commission instituted proceedings to determine whether to approve or disapprove the proposed rule change.7 On December 23, 2019, the Exchange filed Amendment No. 1 to the proposed rule change as described in Items I and II below, which Items have been prepared by Exchange. The Commission is publishing this notice to solicit comments on Amendment No. 1 to 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 services available to Users that use colocation services in the Mahwah, New Jersey data center to add the NMS network to connect to the NMS feeds. This Amendment No. 1, which supersedes the original filing in its entirety, is designed to address comments in the Commission’s Order instituting proceedings to determine whether to approve or disapprove the original filing.8 The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 5 See Securities Exchange Act Release Nos. 87399, 84 FR 58189 (October 30, 2019). 6 See, respectively, letter dated October 24, 2019 from John M. Yetter, Vice President and Senior Deputy General Counsel, Nasdaq Stock Market LLC (‘‘Nasdaq’’), to Vanessa Countryman, Secretary, Commission (‘‘Nasdaq Letter’’); letter dated November 8, 2019 from Elizabeth K. King, Chief Regulatory Officer, ICE, General Counsel and Corporate Secretary, NYSE to Ms. Vanessa Countryman, Secretary, Commission (‘‘NYSE Response Letter’’); and letter dated November 25, 2019 from Joan C. Conley, Senior Vice President and Corporate Secretary, Nasdaq, to Vanessa Countryman, Secretary, Commission (‘‘Second Nasdaq Letter’’). All comments received by the Commission on the proposed rule change are available on the Commission’s website at: https:// www.sec.gov/comments/sr-nyse-2019-46/srnyse 201946.htm. 7 See infra note 8. 8 See Securities Exchange Act Release No. 87699 (December 9, 2019), 84 FR 68239 (December 13, 2019) (SR–NYSE–2019–46) (‘‘Order’’). E:\FR\FM\15JAN1.SGM 15JAN1

Agencies

[Federal Register Volume 85, Number 10 (Wednesday, January 15, 2020)]
[Notices]
[Pages 2465-2468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00451]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33743; 812-15081]


Goldman Sachs Real Estate Diversified Income Fund, et al.

January 9, 2020.
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 and to impose asset-based service and distribution 
fees, and early withdrawal charges (``EWCs'').

Applicants:  Goldman Sachs Real Estate Diversified Income Fund and 
Goldman Sachs Credit Income Fund (the ``Initial Funds''), Goldman Sachs 
Asset Management, LP (the ``Adviser''), and Goldman Sachs & Co. LLC 
(the ``Distributor'').

Filing Dates:  The application was filed on December 11, 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 February 3, 2020, 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

[[Page 2466]]

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: 200 West Street, New 
York, NY 10282.

FOR FURTHER INFORMATION CONTACT: Edward J. Rubenstein, Senior Special 
Counsel, at (202) 551-6854, or Kaitlin C. Bottock, 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 https://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. The Goldman Sachs Real Estate Diversified Income Fund (the ``GS 
Real Estate Fund'') is a Delaware statutory trust that is registered 
under the Act and will operate as a diversified, closed-end management 
investment company. The GS Real Estate Fund will operate as an 
``interval fund'' pursuant to rule 23c-3 under the Act and intends to 
continuously offer its shares.
    2. The Goldman Sachs Credit Income Fund (the ``GS Credit Fund'') is 
a Delaware statutory trust that is registered under the Act and will 
operate as a diversified closed-end management investment company. The 
GS Credit Fund will operate as an ``interval fund'' pursuant to rule 
23c-3 under the Act and intends to continuously offer its shares.
    3. The Adviser is a Delaware limited liability partnership 
registered as an investment adviser under the Investment Advisers Act 
of 1940. The Adviser will serve as investment adviser to the Initial 
Funds.
    4. The Distributor is registered with the Commission as a broker-
dealer under the Securities Exchange Act of 1934 (the ``Exchange 
Act''), and will act as the distributor of the Initial Funds.
    5. Applicants seek an order to permit the Initial Funds to issue 
multiple classes of shares, each having its own fee and expense 
structure, and to impose asset-based distribution and service fees, and 
EWCs.
    6. Applicants request that the order also apply to any continuously 
offered registered closed-end management investment company that has 
been previously organized or that may be organized in the future for 
which the Adviser or the Distributor or any entity controlling, 
controlled by, or under common control with the Adviser or the 
Distributor, or any successor in interest to any such entity,\1\ acts 
as investment adviser or principal underwriter, respectively, and which 
operates as an interval fund pursuant to rule 23c-3 under the Act or 
provides periodic liquidity with respect to its shares pursuant to rule 
13e-4 under the Exchange Act (each, a ``Future Fund'' and together with 
the Initial Fund, the ``Funds'').\2\
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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.
    \2\ Any Fund relying on this relief in the future will do so in 
compliance with the terms and conditions of the application. 
Applicants represent that each entity presently intending to rely on 
the requested relief is listed as an applicant.
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    7. Each Initial Fund will make a continuous public offering of its 
shares. Applicants state that additional offerings by any Fund relying 
on the order may be on a private placement or public offering basis. 
Shares of the Funds will not be listed on any securities exchange, nor 
quoted on any quotation medium. The Funds do not expect there to be a 
secondary trading market for their shares.
    8. If the requested relief is granted, the GS Real Estate Fund 
expects to offer at least eight classes of shares and the GS Credit 
Fund expects to offer at least five classes of shares. The Initial 
Funds may also offer additional classes of shares in the future, with 
each class having its own fee and expense structure.
    9. Applicants state that, from time to time, the Funds may create 
additional classes of shares, the terms of which may differ from the 
initial class pursuant to and in compliance with rule 18f-3 under the 
Act.
    10. Applicants state that shares of a Fund may be subject to a 
repurchase fee at a rate of no greater than 2% 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. Any repurchase fee will apply equally to 
all classes of shares of a Fund, consistent with section 18 of the Act 
and rule 18f-3 thereunder. Further, applicants represent that to the 
extent a Fund determines to waive, impose scheduled variations of, or 
eliminate any repurchase fee, it will do so consistently with the 
requirements of rule 22d-1 under the Act as if the repurchase fee were 
a CDSL (defined below) and as if the Fund were an open-end investment 
company and the Fund's waiver of, scheduled variation in, or 
elimination of, any such repurchase fee will apply uniformly to all 
shareholders of the Fund regardless of class.
    11. Applicants state that the Initial Funds will adopt a 
fundamental policy to repurchase a specified percentage of its shares 
(no less than 5% and not more than 25%) at net asset value on a 
periodic basis. Such repurchase offers will be conducted pursuant to 
rule 23c-3 under the Act.\3\ Each Future Fund will likewise adopt a 
fundamental investment policy in compliance with rule 23c-3 and make 
periodic repurchase offers to its shareholders, or provide periodic 
liquidity with respect to its shares pursuant to rule 13e-4 under the 
Exchange Act. Any repurchase offers made by the Funds will be made to 
all holders of shares of each such Fund.
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    \3\ Applicants submit that rule 23c-3 and Regulation M under the 
Exchange Act permit an interval fund to make repurchase offers to 
repurchase its shares while engaging in a continuous offering of its 
shares pursuant to rule 415 under the Securities Act of 1933.
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    12. Applicants represent that any asset-based service and/or 
distribution fees for each class of shares will comply with the 
provisions of FINRA Rule 2341 (``Sales Charge Rule'').\4\ Applicants 
also 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 is required for open-end funds, each Fund 
will disclose its expenses in shareholder reports, and describe any 
arrangements that result in breakpoints in or elimination of sales 
loads in its prospectus.\5\ In addition, applicants will comply with 
applicable enhanced fee disclosure requirements for fund of funds, 
including registered funds of hedge funds.\6\
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    \4\ Any reference to the Sales Charge Rule includes any 
successor or replacement rule that may be adopted by the Financial 
Industry Regulatory Authority (``FINRA'').
    \5\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring 
open-end investment companies to disclose fund expenses in 
shareholder reports); and Disclosure of Breakpoint Discounts by 
Mutual Funds, Investment Company Act Release No. 26464 (June 7, 
2004) (adopting release) (requiring open-end investment companies to 
provide prospectus disclosure of certain sales load information).
    \6\ Fund of Funds Investments, Investment Company Act Rel. Nos. 
26198 (Oct. 1, 2003) (proposing release) and 27399 (Jun. 20, 2006) 
(adopting release). See also Rules 12d1-1, et seq. of the Act.
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    13. Each of the Funds will comply with any requirements that the

[[Page 2467]]

Commission or FINRA may adopt 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 each Fund. In 
addition, each Fund will contractually require that any distributor of 
the Fund's shares comply with such requirements in connection with the 
distribution of such Fund's shares.
    14. Applicants state that each Fund may impose an EWC on shares 
submitted for repurchase that have been held less than a specified 
period and may waive the EWC for certain categories of shareholders or 
transactions to be established from time to time. Applicants state that 
each of the Funds will apply the EWC (and any waivers or scheduled 
variations of the EWC) uniformly to all shareholders in a given class 
and consistently with the requirements of rule 22d-1 under the Act as 
if the Funds were open-end investment companies.
    15. Each Fund operating as an interval fund pursuant to rule 23c-3 
under the Act 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, ``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 amount 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 were 
an open-end investment company subject to rule 11a-3. In complying with 
rule 11a-3, each Fund will treat an EWC as if it were a contingent 
deferred sales load (``CDSL'').

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(a)(2) of the Act makes it unlawful for a closed-end 
investment company to issue a senior security that is a stock unless 
certain requirements are met. Applicants state that the creation of 
multiple classes of shares of the Funds may violate section 18(a)(2) 
because the Funds 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 
registered 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 
creation of multiple classes of Shares of a Fund proposed herein may 
result in Shares of a class having ``priority over [another] class as 
to . . . payment of dividends,'' and being deemed a ``senior 
security,'' because shareholders of different classes may pay different 
distribution fees, different shareholder services fees, and any other 
expense. Accordingly, applicants state that the creation of multiple 
classes of Shares of a Fund with different fees and expenses may be 
prohibited by section 18(c).
    3. Section 18(i) of the Act provides, in relevant part, 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 multiple classes of 
shares of the Funds 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 its securities and 
provide investors with a broader choice of shareholder services. 
Applicants assert that the proposed closed-end investment company 
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

[[Page 2468]]

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 Service and Distribution 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 the Funds to impose asset-
based service and distribution 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 service and 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 
service and distribution 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 
Sales Charge Rule, as amended from time to time, as if that rule 
applied to all closed-end management investment companies.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-00451 Filed 1-14-20; 8:45 am]
 BILLING CODE 8011-01-P
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