RMR Mortgage Trust, 80199-80200 [2020-27206]

Download as PDF Federal Register / Vol. 85, No. 239 / Friday, December 11, 2020 / Notices jbell on DSKJLSW7X2PROD with NOTICES 2020–64, as modified by Amendment No. 1 be, and hereby is, approved. The following is a summary of the application. The complete application For the Commission, by the Division of may be obtained via the Commission’s Trading and Markets, pursuant to delegated website by searching for the file authority.30 number, or for an applicant using the J. Matthew DeLesDernier, Company name box, at https:// Assistant Secretary. www.sec.gov/search/search.htm or by [FR Doc. 2020–27203 Filed 12–10–20; 8:45 am] calling (202) 551–8090. BILLING CODE 8011–01–P Applicant’s Representations: 1. Applicant is a Maryland statutory trust and is a non-diversified, closedSECURITIES AND EXCHANGE end management investment company COMMISSION registered under the Act. Prior to the [Investment Company Act Release No. Special Meeting (as defined below), 34130; 811–22260] Applicant was named ‘‘RMR Real Estate Income Fund’’ and its primary RMR Mortgage Trust investment objective was to earn and pay to its common shareholders a high December 7, 2020. level of current income by investing in AGENCY: Securities and Exchange real estate companies. Capital Commission (‘‘Commission’’). appreciation was Applicant’s secondary ACTION: Notice. objective. 2. At a special meeting of Applicant’s Notice of application for shareholders on April 16, 2020 (‘‘the deregistration under Section 8(f) of the Special Meeting’’), Applicant’s Investment Company Act of 1940 (the shareholders approved a proposal (the ‘‘Act’’). Summary of Application: RMR ‘‘Business Change Proposal’’) to change Mortgage Trust requests an order Applicant’s business from a registered declaring that it has ceased to be an investment company to a commercial investment company. mortgage real estate investment trust Applicant: RMR Mortgage Trust. (‘‘REIT’’) that focuses primarily on Filing Dates: The application was originating and investing in first filed on May 27, 2020 and was amended mortgage whole loans secured by on August 17, 2020, November 18, 2020 middle market and transitional and December 1, 2020. commercial real estate (‘‘CRE’’). Hearing or Notification of Hearing: An Notably, the proxy statement in order granting the request will be issued connection with the Business Change unless the Commission orders a hearing. Proposal stated that, if approved, Interested persons may request a Applicant would realign its portfolio so hearing by emailing the Commission’s that it will not be considered an Secretary at Secretarys-Office@sec.gov investment company under the Act and and serving Applicant with a copy of apply to the Commission for an order the request by email. Hearing requests declaring that Applicant has ceased to should be received by the Commission be an investment company. Applicant by 5:30 p.m. on January 4, 2021 and represents that it has operated during its should be accompanied by proof of 2020 taxable year so that it may qualify service on Applicant, in the form of an for taxation as a REIT for federal tax affidavit, or, for lawyers, a certificate of purposes. service. Pursuant to rule 0–5 under the 3. Applicant states that, following the Act, hearing requests should state the Special Meeting, it has taken various nature of the writer’s interest, any facts steps to implement the Business bearing upon the desirability of a Proposal, including changing its name hearing on the matter, the reason for the to ‘‘RMR Mortgage Trust,’’ divesting request, and the issues contested. legacy portfolio assets and reorienting Persons who wish to be notified of a its portfolio to originating and investing hearing may request notification by in first mortgage whole loans secured by emailing to the Commission’s Secretary middle market and transitional CRE. at Secretarys-Office@sec.gov. Applicant states that it also holds itself ADDRESSES: The Commission: out in its periodic reports to Secretarys-Office@sec.gov. Applicants: shareholders, press releases and website jclark@rmrgroupadvisors.com. as a company that focuses primarily on FOR FURTHER INFORMATION CONTACT: originating and investing in first Marc Mehrespand, Senior Counsel; mortgage whole loans secured by Trace Rakestraw, Branch Chief, at (202) middle market and transitional CRE. 4. Applicant’s investment advisory 551–6825 (Division of Investment agreement (‘‘IAA’’) with RMR Advisors Management, Chief Counsel’s Office). LLC (the ‘‘Adviser’’), Applicant’s 30 17 CFR 200.30–3(a)(12). investment adviser, remains in effect VerDate Sep<11>2014 23:25 Dec 10, 2020 Jkt 253001 SUPPLEMENTARY INFORMATION: PO 00000 Frm 00210 Fmt 4703 Sfmt 4703 80199 but Applicant anticipates that, if Applicant receives the order, the IAA would be terminated and Applicant would enter into a new management agreement with the Adviser, or an affiliate of the Adviser. Applicant represents that its officers devote significant time to Applicant’s new business strategy, including in connection with the formation of business objectives, plans and strategies and sourcing of mortgage origination opportunities. In addition, the Adviser has established an investment committee (the ‘‘Investment Committee’’) responsible for evaluating mortgage loan origination opportunities and making determinations as to whether or not to fund such loan opportunities, in each case, taking into account Applicant’s investment guidelines and considerations, subject to any required approvals by Applicant’s Board of Trustees (‘‘Board’’). Two of Applicant’s Board members serve as members of the Investment Committee. 5. Applicant states that it currently originates commercial mortgage loans through a wholly-owned subsidiary, RMTG Lender LLC (the ‘‘Real Estate Subsidiary’’). As of November 30, 2020, 100% of the assets of the Real Estate Subsidiary consisted of commercial mortgage loans fully secured by real estate. Applicant represents that it may establish other wholly-owned subsidiaries to carry out specific activities, consistent with Applicant’s business of originating and investing in first mortgage whole loans secured by middle market and transitional CRE. 6. Applicant represents that the Real Estate Subsidiary is excluded from the definition of ‘‘investment company’’ by section 3(c)(5)(C) of the Act and, therefore, securities issued by the Real Estate Subsidiary are not ‘‘investment securities’’ as defined in section 3(a)(2) of the Act. Applicant states that, as of November 30, 2020, the value of investment securities owned by Applicant represents approximately 35.1% of Applicant’s total assets, exclusive of Government securities and cash items, on an unconsolidated basis (‘‘Adjusted Total Assets’’). 7. For the nine months ended September 30, 2020, Applicant states that it derived approximately 100% of its gross income from securities (other than investments that qualify as ‘‘mortgages and other liens on and interests in real estate’’ for purposes of section 3(c)(5)(C) of the Act (‘‘Qualifying Real Estate Assets’’)) and approximately 0% of its gross income from Qualifying Real Estate Assets, and for the period from October 1, 2020 through November E:\FR\FM\11DEN1.SGM 11DEN1 jbell on DSKJLSW7X2PROD with NOTICES 80200 Federal Register / Vol. 85, No. 239 / Friday, December 11, 2020 / Notices 30, 2020, Applicant derived approximately 82% of its gross income from securities (other than Qualifying Real Estate Assets) and approximately 18% of its gross income from Qualifying Real Estate Assets. Applicant expects its income from securities (other than Qualifying Real Estate Assets and other assets that are not Qualifying Real Estate Assets but which are real estate-related assets (‘‘Real Estate-Related Assets’’) to continue to decrease, and its income from Qualifying Real Estate Assets and Real Estate-Related Assets to continue to increase, as it continues to divest its legacy portfolio assets and reinvest in Qualifying Real Estate Assets and RealEstate Related Assets. Applicant represents that currently it derives no material portion of its gross income from securities that are not Qualifying Real Estate Assets or Real Estate-Related Assets. 8. Upon deregistering as an investment company, which will be the final step in implementing the Business Change Proposal, Applicant represents that it will issue a press release to shareholders indicating that it is no longer a registered investment company and will cease indicating in its financial statements that it is a registered investment company. 9. Applicant states that it is not currently a party to any litigation or administrative proceeding and has timely complied with its obligations to file annual and other reports with the Commission. 10. Applicant represents that, if the requested order is granted, its common shares will continue to be traded on The Nasdaq Stock Market LLC. Applicant’s Legal Analysis: 1. Section 8(f) of the Act provides that whenever the Commission, upon application or its own motion, finds that a registered investment company has ceased to be an investment company, the Commission shall so declare by order and upon the taking effect of such order, the registration of such company shall cease to be in effect. 2. Section 3(a)(1)(A) of the Act defines an ‘‘investment company’’ as any issuer which ‘‘is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities.’’ Section 3(a)(1)(B) of the Act defines an ‘‘investment company’’ as any issuer which ‘‘is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding.’’ 3. Section 3(a)(1)(C) of the Act defines an ‘‘investment company’’ as any issuer VerDate Sep<11>2014 23:25 Dec 10, 2020 Jkt 253001 which ‘‘is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis.’’ Section 3(a)(2) of the Act defines ‘‘investment securities’’ as ‘‘all securities except (A) Government securities, (B) securities issued by employees’ securities companies, and (C) securities issued by majority-owned subsidiaries of the owner which (i) are not investment companies, and (ii) are not relying on the exception from the definition of investment company in paragraph (1) or (7) of subsection (c).’’ 4. Applicant states that it is no longer an investment company as defined in section 3(a)(1)(A), 3(a)(1)(B) or section 3(a)(1)(C). With regard to section 3(a)(1)(A), Applicant represents that it now operates as a commercial mortgage REIT, and argues that its historical development, its public representations, the activities of its directors and officers, the nature of its present assets and the sources of its present income support this assertion. 5. With regard to section 3(a)(1)(B), Applicant represents that it is not engaged, and does not propose to engage, in the business of issuing faceamount certificates of the installment type, has not been engaged in such business and does not have any such certificate outstanding. 6. With regard to section 3(a)(1)(C), Applicant represents that, as discussed in greater detail below, the Real Estate Subsidiary is excluded from the definition of investment company by virtue of section 3(c)(5)(C) of the Act and that, as a result, securities issued by the Real Estate Subsidiary are not ‘‘investment securities’’ within the meaning of section 3(a)(2) of the Act. Because the value of Applicant’s interest in the Real Estate Subsidiary exceeds 60% of the value of Applicant’s Adjusted Total Assets, the value of any ‘‘investment securities’’ owned by Applicant is less than 40% of the value of Applicant’s Adjusted Total Assets. Applicant, therefore, states that it is not an investment company within the meaning of section 3(a)(1)(C) of the Act. 7. Section 3(c)(5)(C) of the Act excludes from the definition of an investment company ‘‘any person who is not engaged in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, and who is primarily engaged in one or more of the following businesses: . . . (C) PO 00000 Frm 00211 Fmt 4703 Sfmt 4703 purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.’’ 8. Applicant represents that, as of November 30, 2020, the only assets of the Real Estate Subsidiary were mortgage loans fully secured by real estate and, as a result, the Real Estate Subsidiary meets the exclusion from the definition of investment company in section 3(c)(5)(C). 9. Applicant states that it is thus qualified for an order of the Commission pursuant to section 8(f) of the Act. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–27206 Filed 12–10–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–90579; File No. SR– PEARL–2020–28] Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 2611, Odd and Mixed Lots December 7, 2020. 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 November 23, 2020, MIAX PEARL, LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend Exchange Rule 2611 regarding the handling of odd lot sized orders. The text of the proposed rule change is available on the Exchange’s website at https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal office, and at the Commission’s Public Reference Room. 1 15 2 17 E:\FR\FM\11DEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 11DEN1

Agencies

[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80199-80200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27206]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34130; 811-22260]


RMR Mortgage Trust

December 7, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for deregistration under Section 8(f) of the 
Investment Company Act of 1940 (the ``Act'').
    Summary of Application: RMR Mortgage Trust requests an order 
declaring that it has ceased to be an investment company.
    Applicant: RMR Mortgage Trust.
    Filing Dates: The application was filed on May 27, 2020 and was 
amended on August 17, 2020, November 18, 2020 and December 1, 2020.
    Hearing or Notification of Hearing: An order granting the request 
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 by email. Hearing requests should be received by the Commission 
by 5:30 p.m. on January 4, 2021 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 to the 
Commission's Secretary at [email protected].

ADDRESSES: The Commission: [email protected]. Applicants: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Marc Mehrespand, Senior Counsel; Trace 
Rakestraw, 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.
    Applicant's Representations:
    1. Applicant is a Maryland statutory trust and is a non-
diversified, closed-end management investment company registered under 
the Act. Prior to the Special Meeting (as defined below), Applicant was 
named ``RMR Real Estate Income Fund'' and its primary investment 
objective was to earn and pay to its common shareholders a high level 
of current income by investing in real estate companies. Capital 
appreciation was Applicant's secondary objective.
    2. At a special meeting of Applicant's shareholders on April 16, 
2020 (``the Special Meeting''), Applicant's shareholders approved a 
proposal (the ``Business Change Proposal'') to change Applicant's 
business from a registered investment company to a commercial mortgage 
real estate investment trust (``REIT'') that focuses primarily on 
originating and investing in first mortgage whole loans secured by 
middle market and transitional commercial real estate (``CRE''). 
Notably, the proxy statement in connection with the Business Change 
Proposal stated that, if approved, Applicant would realign its 
portfolio so that it will not be considered an investment company under 
the Act and apply to the Commission for an order declaring that 
Applicant has ceased to be an investment company. Applicant represents 
that it has operated during its 2020 taxable year so that it may 
qualify for taxation as a REIT for federal tax purposes.
    3. Applicant states that, following the Special Meeting, it has 
taken various steps to implement the Business Proposal, including 
changing its name to ``RMR Mortgage Trust,'' divesting legacy portfolio 
assets and reorienting its portfolio to originating and investing in 
first mortgage whole loans secured by middle market and transitional 
CRE. Applicant states that it also holds itself out in its periodic 
reports to shareholders, press releases and website as a company that 
focuses primarily on originating and investing in first mortgage whole 
loans secured by middle market and transitional CRE.
    4. Applicant's investment advisory agreement (``IAA'') with RMR 
Advisors LLC (the ``Adviser''), Applicant's investment adviser, remains 
in effect but Applicant anticipates that, if Applicant receives the 
order, the IAA would be terminated and Applicant would enter into a new 
management agreement with the Adviser, or an affiliate of the Adviser. 
Applicant represents that its officers devote significant time to 
Applicant's new business strategy, including in connection with the 
formation of business objectives, plans and strategies and sourcing of 
mortgage origination opportunities. In addition, the Adviser has 
established an investment committee (the ``Investment Committee'') 
responsible for evaluating mortgage loan origination opportunities and 
making determinations as to whether or not to fund such loan 
opportunities, in each case, taking into account Applicant's investment 
guidelines and considerations, subject to any required approvals by 
Applicant's Board of Trustees (``Board''). Two of Applicant's Board 
members serve as members of the Investment Committee.
    5. Applicant states that it currently originates commercial 
mortgage loans through a wholly-owned subsidiary, RMTG Lender LLC (the 
``Real Estate Subsidiary''). As of November 30, 2020, 100% of the 
assets of the Real Estate Subsidiary consisted of commercial mortgage 
loans fully secured by real estate. Applicant represents that it may 
establish other wholly-owned subsidiaries to carry out specific 
activities, consistent with Applicant's business of originating and 
investing in first mortgage whole loans secured by middle market and 
transitional CRE.
    6. Applicant represents that the Real Estate Subsidiary is excluded 
from the definition of ``investment company'' by section 3(c)(5)(C) of 
the Act and, therefore, securities issued by the Real Estate Subsidiary 
are not ``investment securities'' as defined in section 3(a)(2) of the 
Act. Applicant states that, as of November 30, 2020, the value of 
investment securities owned by Applicant represents approximately 35.1% 
of Applicant's total assets, exclusive of Government securities and 
cash items, on an unconsolidated basis (``Adjusted Total Assets'').
    7. For the nine months ended September 30, 2020, Applicant states 
that it derived approximately 100% of its gross income from securities 
(other than investments that qualify as ``mortgages and other liens on 
and interests in real estate'' for purposes of section 3(c)(5)(C) of 
the Act (``Qualifying Real Estate Assets'')) and approximately 0% of 
its gross income from Qualifying Real Estate Assets, and for the period 
from October 1, 2020 through November

[[Page 80200]]

30, 2020, Applicant derived approximately 82% of its gross income from 
securities (other than Qualifying Real Estate Assets) and approximately 
18% of its gross income from Qualifying Real Estate Assets. Applicant 
expects its income from securities (other than Qualifying Real Estate 
Assets and other assets that are not Qualifying Real Estate Assets but 
which are real estate-related assets (``Real Estate-Related Assets'') 
to continue to decrease, and its income from Qualifying Real Estate 
Assets and Real Estate-Related Assets to continue to increase, as it 
continues to divest its legacy portfolio assets and reinvest in 
Qualifying Real Estate Assets and Real-Estate Related Assets. Applicant 
represents that currently it derives no material portion of its gross 
income from securities that are not Qualifying Real Estate Assets or 
Real Estate-Related Assets.
    8. Upon deregistering as an investment company, which will be the 
final step in implementing the Business Change Proposal, Applicant 
represents that it will issue a press release to shareholders 
indicating that it is no longer a registered investment company and 
will cease indicating in its financial statements that it is a 
registered investment company.
    9. Applicant states that it is not currently a party to any 
litigation or administrative proceeding and has timely complied with 
its obligations to file annual and other reports with the Commission.
    10. Applicant represents that, if the requested order is granted, 
its common shares will continue to be traded on The Nasdaq Stock Market 
LLC.
    Applicant's Legal Analysis:
    1. Section 8(f) of the Act provides that whenever the Commission, 
upon application or its own motion, finds that a registered investment 
company has ceased to be an investment company, the Commission shall so 
declare by order and upon the taking effect of such order, the 
registration of such company shall cease to be in effect.
    2. Section 3(a)(1)(A) of the Act defines an ``investment company'' 
as any issuer which ``is or holds itself out as being engaged 
primarily, or proposes to engage primarily, in the business of 
investing, reinvesting, or trading in securities.'' Section 3(a)(1)(B) 
of the Act defines an ``investment company'' as any issuer which ``is 
engaged or proposes to engage in the business of issuing face-amount 
certificates of the installment type, or has been engaged in such 
business and has any such certificate outstanding.''
    3. Section 3(a)(1)(C) of the Act defines an ``investment company'' 
as any issuer which ``is engaged or proposes to engage in the business 
of investing, reinvesting, owning, holding, or trading in securities, 
and owns or proposes to acquire investment securities having a value 
exceeding 40 per centum of the value of such issuer's total assets 
(exclusive of Government securities and cash items) on an 
unconsolidated basis.'' Section 3(a)(2) of the Act defines ``investment 
securities'' as ``all securities except (A) Government securities, (B) 
securities issued by employees' securities companies, and (C) 
securities issued by majority-owned subsidiaries of the owner which (i) 
are not investment companies, and (ii) are not relying on the exception 
from the definition of investment company in paragraph (1) or (7) of 
subsection (c).''
    4. Applicant states that it is no longer an investment company as 
defined in section 3(a)(1)(A), 3(a)(1)(B) or section 3(a)(1)(C). With 
regard to section 3(a)(1)(A), Applicant represents that it now operates 
as a commercial mortgage REIT, and argues that its historical 
development, its public representations, the activities of its 
directors and officers, the nature of its present assets and the 
sources of its present income support this assertion.
    5. With regard to section 3(a)(1)(B), Applicant represents that it 
is not engaged, and does not propose to engage, in the business of 
issuing face-amount certificates of the installment type, has not been 
engaged in such business and does not have any such certificate 
outstanding.
    6. With regard to section 3(a)(1)(C), Applicant represents that, as 
discussed in greater detail below, the Real Estate Subsidiary is 
excluded from the definition of investment company by virtue of section 
3(c)(5)(C) of the Act and that, as a result, securities issued by the 
Real Estate Subsidiary are not ``investment securities'' within the 
meaning of section 3(a)(2) of the Act. Because the value of Applicant's 
interest in the Real Estate Subsidiary exceeds 60% of the value of 
Applicant's Adjusted Total Assets, the value of any ``investment 
securities'' owned by Applicant is less than 40% of the value of 
Applicant's Adjusted Total Assets. Applicant, therefore, states that it 
is not an investment company within the meaning of section 3(a)(1)(C) 
of the Act.
    7. Section 3(c)(5)(C) of the Act excludes from the definition of an 
investment company ``any person who is not engaged in the business of 
issuing redeemable securities, face-amount certificates of the 
installment type or periodic payment plan certificates, and who is 
primarily engaged in one or more of the following businesses: . . . (C) 
purchasing or otherwise acquiring mortgages and other liens on and 
interests in real estate.''
    8. Applicant represents that, as of November 30, 2020, the only 
assets of the Real Estate Subsidiary were mortgage loans fully secured 
by real estate and, as a result, the Real Estate Subsidiary meets the 
exclusion from the definition of investment company in section 
3(c)(5)(C).
    9. Applicant states that it is thus qualified for an order of the 
Commission pursuant to section 8(f) of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27206 Filed 12-10-20; 8:45 am]
BILLING CODE 8011-01-P
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