Arena Holdings Management LLC, 71971-71973 [2020-24956]
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Federal Register / Vol. 85, No. 219 / Thursday, November 12, 2020 / Notices
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significant overnight market-wide
volatility. The Exchange further believes
that this proposed rule change would
reduce the potential number of
securities that would open at a price
that may not represent the current value
of the security due to unfilled
marketable auction interest, while still
preserving investor protections by
preventing significantly dislocated
openings. This proposed rule change
would therefore promote the fair and
orderly operation of Exchangefacilitated Core Open Auctions by
allowing such securities to open at a
price that is consistent with the buy and
sell interest in the security, which
would also allow more buy and sell
interest to participate in such Auction.
The Exchange notes that this
proposed change is not novel and is
based on how NYSE Arca and NYSE
American determine the Auction
Reference Price for their respective
electronic Core Open Auctions.
Accordingly, this proposed change
would align how Auction Reference
Prices are determined for electronic
Exchange-facilitated Auctions across
NYSE, NYSE Arca, and NYSE
American.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not designed to
address any competitive issues but
rather would make permanent the
Exchange’s temporary Commentaries
.01–.03 to Rule 7.35C, which have been
in effect for a temporary period while
the Trading Floor is temporarily closed
due to COVID–19. This proposed rule
change is designed to provide the
Exchange with additional tools for when
it facilitates an Auction, including by
allowing for an Exchange-facilitated
Trading Halt Auction following a
MWCB Halt so that a security can be
reopened before leading into the close,
providing the DMMs with additional
functionality to allow them to maintain
price continuity with reasonable depth
in their assigned securities following an
Exchange-facilitated Auction, and
aligning the Auction Reference Price for
an Exchange-facilitated Core Open
Auction with the Auction Reference
Price used for NYSE Arca and NYSE
American electronic Core Open
Auctions. More specifically, the
proposed rule change does not implicate
any intramarket competition concerns
because the only market participants on
the Exchange with the obligation to
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facilitate Auctions are DMMs, and all
DMMs would be subject to this rule
change. The proposed rule change does
not implicate any intermarket
competition concerns because it relates
to how the Exchange would facilitate
Auctions in Exchange-listed securities.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register, or such longer period up to 90
days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–
NYSE–2020–89 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–NYSE–2020–89. 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
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71971
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–NYSE–2020–89, and
should be submitted on or before
December 3, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–24986 Filed 11–10–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Advisers Act Release No. 5624/
803–00252]
Arena Holdings Management LLC
November 5, 2020.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of application for an exemptive
order under Section 202(a)(11)(H) of the
Investment Advisers Act of 1940
(‘‘Advisers Act’’).
Applicant: Arena Holdings
Management LLC (the ‘‘Applicant’’).
Relevant Advisers Act Sections:
Exemption requested under Section
202(a)(11)(H) of the Advisers Act from
Section 202(a)(11) of the Advisers Act.
Summary of Application: The
Applicant requests that the Commission
issue an order declaring it to be a person
not within the intent of Section
202(a)(11) of the Advisers Act, which
defines the term ‘‘investment adviser.’’
26 17
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Federal Register / Vol. 85, No. 219 / Thursday, November 12, 2020 / Notices
Filing Dates: The application was
filed on November 13, 2019 and
amended on August 4, 2020.
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 emailing the
Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicant
with a copy of the request, personally or
by mail. Hearing requests should be
received by the Commission by 5:30
p.m. on November 30, 2020, and should
be accompanied by proof of service on
Applicant, 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 emailing the
Commission’s Secretary at SecretarysOffice@sec.gov.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicant:
Arena Holdings Management LLC,
jbergman@brickpatel.com.
FOR FURTHER INFORMATION CONTACT: Asaf
Barouk, Attorney-Adviser, at 202–551–
4029 or Parisa Haghshenas, 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 either at https://www.sec.gov/
rules/iareleases.shtml or by calling (202)
551–8090.
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Applicant’s Representations
1. The Applicant is a multigenerational, single-family office that
provides or intends to provide services
to the family and descendants of Roopa
Dewan. The Applicant is wholly owned
by Family Clients and is exclusively
controlled (directly and indirectly) by
one or more Family Members and/or
Family Entities in compliance with Rule
202(a)(11)(G)–1 (the ‘‘Family Office
Rule’’). For purposes of the application,
the term ‘‘Dewan Family’’ means the
lineal descendants of Roopa Dewan,
their spouses or spousal equivalents,
and all other persons and entities that
qualify as ‘‘Family Clients’’ as defined
in paragraph (d)(4) of the Family Office
Rule. Unless otherwise indicated,
capitalized terms herein have the same
meaning as defined in the Family Office
Rule.
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2. The Applicant provides both
advisory and non-advisory services
(collectively, the ‘‘Services’’) to
members of the Dewan Family. Any
Service provided by the Applicant that
relates to investment advice about
securities or may otherwise be
construed as advisory in nature is
considered an ‘‘Advisory Service.’’
3. The Applicant represents that: (i)
Each of the persons served by the
Applicant is a Family Client (i.e., the
Applicant has no investment advisory
clients other than Family Clients as
required by paragraph (b)(1) of the
Family Office Rule); (ii) the Applicant is
owned and controlled in a manner that
complies in all respects with paragraph
(b)(2) of the Family Office Rule; and (iii)
the Applicant does not hold itself out to
the public as an investment adviser as
required by paragraph (b)(3) of the
Family Office Rule. At the time of this
Application, Applicant provides
Advisory Services solely to Family
Clients, including primarily to pooled
investment vehicles that are wholly
owned, directly or indirectly, by one or
more natural persons that are Family
Clients and operated for the sole benefit
of those clients.
4. In addition to the Family Clients,
the Applicant desires to provide
Services (including Advisory Services)
to the siblings of a spouse of a lineal
descendant of Roopa Dewan (which
descendant is the founder and Chief
Executive Officer of Applicant) and
their spouses and descendants (the
‘‘Additional Family Clients’’).
5. The Additional Family Clients do
not have an ownership interest in the
Applicant. The Applicant represents
that the assets beneficially owned by
Family Members and/or Family Entities
(excluding the Additional Family
Clients) would make up at least 95% of
the total assets for which the Applicant
provides Advisory Services.
6. The Applicant represents that the
Additional Family Clients have
important familial ties to and are an
integral part of the Dewan Family. The
Applicant maintains that including the
Additional Family Clients into the
definition of ‘‘family’’ for this purpose
simply recognizes and memorializes the
familial ties and intra-familial
relationships that already exist, and
have existed for at least 25 years and
that the inclusion of the Additional
Family Clients as members of the
Dewan Family for which the Applicant
may provide Services would be
consistent with the existing familial
relationship among the family members.
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The Applicant’s Legal Analysis
1. Section 202(a)(11) of the Advisers
Act defines the term ‘‘investment
adviser’’ to mean ‘‘any person who, for
compensation, engages in the business
of advising others, either directly or
through publications or writings, as to
the value of securities or as to the
advisability of investing in, purchasing,
or selling securities, or who, for
compensation and as part of a regular
business, issues or promulgates analyses
or reports concerning securities . . .’’
2. The Applicant falls within the
definition of an investment adviser
under Section 202(a)(11). The Family
Office Rule provides an exclusion from
the definition of investment adviser for
which the Applicant is currently
eligible but would no longer qualify if
the Applicant provides Services to the
Additional Family Clients. Because the
Applicant has regulatory assets under
management of more than $100 million,
it is not prohibited from registering with
the Commission under Section 203A(a)
of the Advisers Act. In sum, absent
relief, if the Applicant opted to render
Services to the Additional Family
Clients, the Applicant would be
required to register under Section 203(a)
of the Advisers Act, notwithstanding
that (i) the Applicant does not hold
itself out to the public as an investment
adviser and does not market non-public
offerings to persons or entities that are
not Family Clients, (ii) the Applicant is
wholly owned by Family Clients and
controlled by Feroz Dewan who is a
member of the Dewan Family, in
accordance with paragraph (b)(2) of the
Family Office Rule; and (iii) the
Applicant is a ‘‘family office’’ for the
Dewan Family and will not offer its
Advisory Services to anyone other than
Family Clients and the Additional
Family Clients.
3. The Applicant submits that its
proposed relationship with the
Additional Family Clients does not
change the nature of the office into that
of a commercial advisory firm. In
addition, the Applicant notes that if the
siblings of Mrs. Dewan were the siblings
of a lineal descendant, rather than the
siblings of a spouse of a lineal
descendant, there would be no question
that each of them would be a Family
Member, and their retirement assets
would similarly fall within the
definition of Family Client. The
Applicant states that in requesting the
order, the Applicant is not attempting to
expand its operations or engage in any
level of commercial activity to which
the Advisers Act is designed to apply.
There would only be two natural
persons and their spouses and
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Federal Register / Vol. 85, No. 219 / Thursday, November 12, 2020 / Notices
descendants who are not Family
Members to whom the Applicant would
provide Advisory Services if relief were
granted. The Applicant estimates that if
the Additional Family Clients’ assets
were managed by the Applicant, the
assets owned by the Additional Family
Clients would represent less than five
percent (5%) of the Applicant’s assets
under management. From the
perspective of the Dewan Family,
allowing the Applicant to provide
Services to the Additional Family
Clients is consistent with the existing
familial relationship among family
members.
4. The Applicant also submits that
there is no public interest in requiring
the Applicant to be registered under the
Advisers Act. The Applicant states that
the office is a private organization that
was formed to be the ‘‘family office’’ for
the Dewan Family and that the office
does not have any public clients. The
Applicant maintains that the office’s
Advisory Services are exclusively
tailored to the needs of the Extended
Dewan Family. The Applicant argues
that the provision of Advisory Services
to the Additional Family Clients, does
not create any public interest that would
require the office to be registered under
the Advisers Act that is different in any
manner than the considerations that
apply to a ‘‘family office’’ that complies
in all respects with the Family Office
Rule.
5. The Applicant argues that although
the Family Office Rule largely codified
the exemptive orders that the
Commission had previously issued
before the enactment of the Dodd-Frank
Wall Street Reform and Consumer
Protection Act, the Commission
recognized in proposing the rule that
the exact representations, conditions, or
terms contained in every exemptive
order could not be captured in a rule of
general applicability. The Commission
noted that family offices would remain
free to seek a Commission exemptive
order to advise an individual or entity
that did not meet the proposed family
client definition, and that certain issues
would be more appropriately addressed
through an exemptive order process
where the Commission can consider the
specific facts and circumstances, than
through a rule of general applicability.
6. The Applicant maintains that,
based on its circumstances—desiring to
provide Advisory Services to certain
Additional Family Clients who are
relatives that have been considered and
treated as family members for twentyfive (25) years and whose status as
clients of the office would not change
the nature of the office’s operations to
that of a commercial advisory
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business—an exemptive order is
appropriate based on the Applicant’s
specific facts and circumstances.
7. For the foregoing reasons, the
Applicant requests an order declaring it
to be a person not within the intent of
Section 202(a)(11) of the Advisers Act.
The Applicant submits that the order is
necessary and appropriate, in the public
interest, consistent with the protection
of investors, and consistent with the
purposes fairly intended by the policy
and provisions of the Advisers Act.
The Applicant’s Conditions
1. The Applicant will offer and
provide Advisory Services only to
Family Clients and to the Additional
Family Clients, who generally will be
deemed to be, and be treated as if they
were, Family Clients; provided,
however, that the Additional Family
Clients will be deemed to be, and
treated as if they were, Family Members
for purposes of paragraph (b)(1) and for
purposes of paragraph (d)(4)(vi) of the
Family Office Rule.
2. The Applicant will at all times be
wholly owned by Family Clients and
exclusively controlled (directly or
indirectly) by one or more Family
Members and/or Family Entities
(excluding the Additional Family
Clients’ Family Entities) as defined in
paragraph (d)(5) of the Family Office
Rule.
3. At all times the assets beneficially
owned by Family Members and/or
Family Entities (excluding the
Additional Family Clients’ Family
Entities), will account for at least 95%
of the assets for which the Applicant
provides Advisory Services.
4. The Applicant will comply with all
the terms for exclusion from the
definition of investment adviser under
the Advisers Act set forth in the Family
Office Rule except for the limited
exception requested by this Application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–24956 Filed 11–10–20; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
71973
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90368; File No. SR–DTC–
2020–801]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
No Objection To Advance Notice To
Amend Rule 4
November 6, 2020.
On September 9, 2020, The
Depository Trust Company (‘‘DTC’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) advance
notice SR–DTC–2020–801 (‘‘Advance
Notice’’) pursuant to Section 806(e)(1) of
Title VIII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act,
entitled Payment, Clearing and
Settlement Supervision Act of 2010
(‘‘Clearing Supervision Act’’) 1 and Rule
19b–4(n)(1)(i) 2 under the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 3 to amend Rule 4 of the Rules, ByLaws and Organization Certificate of
DTC (the ‘‘Rules’’). The Advance Notice
was published for comment in the
Federal Register on October 20, 2020,4
and the Commission has not received
comments regarding the changes
proposed in the Advance Notice. This
publication serves as notice of no
objection to the Advance Notice.
I. The Advance Notice
A. Background
DTC is the central securities
depository (‘‘CSD’’) for substantially all
corporate and municipal debt and
equity securities available for trading in
the United States.5 As a covered
clearing agency that provides CSD
services,6 DTC provides a central
1 12
U.S.C. 5465(e)(1).
CFR 240.19b–4(n)(1)(i).
3 15 U.S.C. 78a et seq.
4 Securities Exchange Act Release No. 90169
(October 14, 2020), 85 FR 66666 (October 20, 2020)
(SR–DTC–2020–801) (‘‘Notice of Filing’’).
5 Each capitalized term not otherwise defined
herein has its respective meaning as set forth in
DTC’s rules, including, but not limited to, the
Rules, By-Laws and Organization Certificate of DTC
(the ‘‘Rules’’) and the DTC Settlement Service
Guide (the ‘‘Settlement Guide’’), available at https://
www.dtcc.com/legal/rules-and-procedures.aspx.
The Settlement Guide is a Procedure of DTC filed
with the Commission that, among other things,
operationalizes and supplements the DTC Rules
that relate to settlement.
6 A covered clearing agency is defined as a
registered clearing agency that provides the services
of a central counterparty (‘‘CCP’’) or CSD. See 17
CFR 240.17Ad–22(a)(5). CSD services means
services of a clearing agency that is a securities
depository as described in Section 3(a)(23)(A) of the
Exchange Act. See 17 CFR 240.17Ad–22(a)(3).
Specifically, the definition of a clearing agency
includes, in part, ‘‘any person, such as a securities
depository that (i) acts as a custodian of securities
2 17
Continued
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]]>Agencies
[Federal Register Volume 85, Number 219 (Thursday, November 12, 2020)]
[Notices]
[Pages 71971-71973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24956]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Advisers Act Release No. 5624/803-00252]
Arena Holdings Management LLC
November 5, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
-----------------------------------------------------------------------
Notice of application for an exemptive order under Section
202(a)(11)(H) of the Investment Advisers Act of 1940 (``Advisers
Act'').
Applicant: Arena Holdings Management LLC (the ``Applicant'').
Relevant Advisers Act Sections: Exemption requested under Section
202(a)(11)(H) of the Advisers Act from Section 202(a)(11) of the
Advisers Act.
Summary of Application: The Applicant requests that the Commission
issue an order declaring it to be a person not within the intent of
Section 202(a)(11) of the Advisers Act, which defines the term
``investment adviser.''
[[Page 71972]]
Filing Dates: The application was filed on November 13, 2019 and
amended on August 4, 2020.
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 emailing the Commission's
Secretary at [email protected] and serving Applicant with a
copy of the request, personally or by mail. Hearing requests should be
received by the Commission by 5:30 p.m. on November 30, 2020, and
should be accompanied by proof of service on Applicant, 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 emailing the Commission's Secretary at [email protected].
ADDRESSES: The Commission: [email protected]. Applicant: Arena
Holdings Management LLC, [email protected].
FOR FURTHER INFORMATION CONTACT: Asaf Barouk, Attorney-Adviser, at
202-551-4029 or Parisa Haghshenas, 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 either at https://www.sec.gov/rules/iareleases.shtml or by calling (202) 551-8090.
Applicant's Representations
1. The Applicant is a multi-generational, single-family office that
provides or intends to provide services to the family and descendants
of Roopa Dewan. The Applicant is wholly owned by Family Clients and is
exclusively controlled (directly and indirectly) by one or more Family
Members and/or Family Entities in compliance with Rule 202(a)(11)(G)-1
(the ``Family Office Rule''). For purposes of the application, the term
``Dewan Family'' means the lineal descendants of Roopa Dewan, their
spouses or spousal equivalents, and all other persons and entities that
qualify as ``Family Clients'' as defined in paragraph (d)(4) of the
Family Office Rule. Unless otherwise indicated, capitalized terms
herein have the same meaning as defined in the Family Office Rule.
2. The Applicant provides both advisory and non-advisory services
(collectively, the ``Services'') to members of the Dewan Family. Any
Service provided by the Applicant that relates to investment advice
about securities or may otherwise be construed as advisory in nature is
considered an ``Advisory Service.''
3. The Applicant represents that: (i) Each of the persons served by
the Applicant is a Family Client (i.e., the Applicant has no investment
advisory clients other than Family Clients as required by paragraph
(b)(1) of the Family Office Rule); (ii) the Applicant is owned and
controlled in a manner that complies in all respects with paragraph
(b)(2) of the Family Office Rule; and (iii) the Applicant does not hold
itself out to the public as an investment adviser as required by
paragraph (b)(3) of the Family Office Rule. At the time of this
Application, Applicant provides Advisory Services solely to Family
Clients, including primarily to pooled investment vehicles that are
wholly owned, directly or indirectly, by one or more natural persons
that are Family Clients and operated for the sole benefit of those
clients.
4. In addition to the Family Clients, the Applicant desires to
provide Services (including Advisory Services) to the siblings of a
spouse of a lineal descendant of Roopa Dewan (which descendant is the
founder and Chief Executive Officer of Applicant) and their spouses and
descendants (the ``Additional Family Clients'').
5. The Additional Family Clients do not have an ownership interest
in the Applicant. The Applicant represents that the assets beneficially
owned by Family Members and/or Family Entities (excluding the
Additional Family Clients) would make up at least 95% of the total
assets for which the Applicant provides Advisory Services.
6. The Applicant represents that the Additional Family Clients have
important familial ties to and are an integral part of the Dewan
Family. The Applicant maintains that including the Additional Family
Clients into the definition of ``family'' for this purpose simply
recognizes and memorializes the familial ties and intra-familial
relationships that already exist, and have existed for at least 25
years and that the inclusion of the Additional Family Clients as
members of the Dewan Family for which the Applicant may provide
Services would be consistent with the existing familial relationship
among the family members.
The Applicant's Legal Analysis
1. Section 202(a)(11) of the Advisers Act defines the term
``investment adviser'' to mean ``any person who, for compensation,
engages in the business of advising others, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or
who, for compensation and as part of a regular business, issues or
promulgates analyses or reports concerning securities . . .''
2. The Applicant falls within the definition of an investment
adviser under Section 202(a)(11). The Family Office Rule provides an
exclusion from the definition of investment adviser for which the
Applicant is currently eligible but would no longer qualify if the
Applicant provides Services to the Additional Family Clients. Because
the Applicant has regulatory assets under management of more than $100
million, it is not prohibited from registering with the Commission
under Section 203A(a) of the Advisers Act. In sum, absent relief, if
the Applicant opted to render Services to the Additional Family
Clients, the Applicant would be required to register under Section
203(a) of the Advisers Act, notwithstanding that (i) the Applicant does
not hold itself out to the public as an investment adviser and does not
market non-public offerings to persons or entities that are not Family
Clients, (ii) the Applicant is wholly owned by Family Clients and
controlled by Feroz Dewan who is a member of the Dewan Family, in
accordance with paragraph (b)(2) of the Family Office Rule; and (iii)
the Applicant is a ``family office'' for the Dewan Family and will not
offer its Advisory Services to anyone other than Family Clients and the
Additional Family Clients.
3. The Applicant submits that its proposed relationship with the
Additional Family Clients does not change the nature of the office into
that of a commercial advisory firm. In addition, the Applicant notes
that if the siblings of Mrs. Dewan were the siblings of a lineal
descendant, rather than the siblings of a spouse of a lineal
descendant, there would be no question that each of them would be a
Family Member, and their retirement assets would similarly fall within
the definition of Family Client. The Applicant states that in
requesting the order, the Applicant is not attempting to expand its
operations or engage in any level of commercial activity to which the
Advisers Act is designed to apply. There would only be two natural
persons and their spouses and
[[Page 71973]]
descendants who are not Family Members to whom the Applicant would
provide Advisory Services if relief were granted. The Applicant
estimates that if the Additional Family Clients' assets were managed by
the Applicant, the assets owned by the Additional Family Clients would
represent less than five percent (5%) of the Applicant's assets under
management. From the perspective of the Dewan Family, allowing the
Applicant to provide Services to the Additional Family Clients is
consistent with the existing familial relationship among family
members.
4. The Applicant also submits that there is no public interest in
requiring the Applicant to be registered under the Advisers Act. The
Applicant states that the office is a private organization that was
formed to be the ``family office'' for the Dewan Family and that the
office does not have any public clients. The Applicant maintains that
the office's Advisory Services are exclusively tailored to the needs of
the Extended Dewan Family. The Applicant argues that the provision of
Advisory Services to the Additional Family Clients, does not create any
public interest that would require the office to be registered under
the Advisers Act that is different in any manner than the
considerations that apply to a ``family office'' that complies in all
respects with the Family Office Rule.
5. The Applicant argues that although the Family Office Rule
largely codified the exemptive orders that the Commission had
previously issued before the enactment of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, the Commission recognized in
proposing the rule that the exact representations, conditions, or terms
contained in every exemptive order could not be captured in a rule of
general applicability. The Commission noted that family offices would
remain free to seek a Commission exemptive order to advise an
individual or entity that did not meet the proposed family client
definition, and that certain issues would be more appropriately
addressed through an exemptive order process where the Commission can
consider the specific facts and circumstances, than through a rule of
general applicability.
6. The Applicant maintains that, based on its circumstances--
desiring to provide Advisory Services to certain Additional Family
Clients who are relatives that have been considered and treated as
family members for twenty-five (25) years and whose status as clients
of the office would not change the nature of the office's operations to
that of a commercial advisory business--an exemptive order is
appropriate based on the Applicant's specific facts and circumstances.
7. For the foregoing reasons, the Applicant requests an order
declaring it to be a person not within the intent of Section 202(a)(11)
of the Advisers Act. The Applicant submits that the order is necessary
and appropriate, in the public interest, consistent with the protection
of investors, and consistent with the purposes fairly intended by the
policy and provisions of the Advisers Act.
The Applicant's Conditions
1. The Applicant will offer and provide Advisory Services only to
Family Clients and to the Additional Family Clients, who generally will
be deemed to be, and be treated as if they were, Family Clients;
provided, however, that the Additional Family Clients will be deemed to
be, and treated as if they were, Family Members for purposes of
paragraph (b)(1) and for purposes of paragraph (d)(4)(vi) of the Family
Office Rule.
2. The Applicant will at all times be wholly owned by Family
Clients and exclusively controlled (directly or indirectly) by one or
more Family Members and/or Family Entities (excluding the Additional
Family Clients' Family Entities) as defined in paragraph (d)(5) of the
Family Office Rule.
3. At all times the assets beneficially owned by Family Members
and/or Family Entities (excluding the Additional Family Clients' Family
Entities), will account for at least 95% of the assets for which the
Applicant provides Advisory Services.
4. The Applicant will comply with all the terms for exclusion from
the definition of investment adviser under the Advisers Act set forth
in the Family Office Rule except for the limited exception requested by
this Application.
For the Commission, by the Division of Investment Management,
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-24956 Filed 11-10-20; 8:45 am]
BILLING CODE 8011-01-P
