SharesPost 100 Fund and Liberty Street Advisors, Inc., 20222-20225 [2021-07269]

Download as PDF 20222 Federal Register / Vol. 86, No. 72 / Friday, April 16, 2021 / Notices Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 21 The fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’ . . . .’’.22 Accordingly, the Exchange does not believe its proposed fee change imposes any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. jbell on DSKJLSW7X2PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 23 and paragraph (f) of Rule 19b–4 24 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the 21 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 22 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 23 15 U.S.C. 78s(b)(3)(A). 24 17 CFR 240.19b–4(f). VerDate Sep<11>2014 19:57 Apr 15, 2021 Jkt 253001 Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 J. Matthew DeLesDernier, Assistant Secretary. 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: [FR Doc. 2021–07787 Filed 4–15–21; 8:45 am] 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– CboeBZX–2021–025 on the subject line. SharesPost 100 Fund and Liberty Street Advisors, Inc. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR-CboeBZX–2021–025. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CboeBZX–2021–025 and should be submitted on or before May 7, 2021. PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 34240; 812–15185] Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: The following is a summary of the application from SharesPost 100 Fund (the ‘‘Initial Fund’’) and Liberty Street Advisors, Inc. (the ‘‘Adviser’’ and together with the Initial Fund, the ‘‘Applicants’’). SUMMARY: The application was filed on December 14, 2020, and amended on March 2, 2021. ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: c/o Andrew Nowack, by email to anowack@libertystreetfunds.com. FOR FURTHER INFORMATION CONTACT: Jill Ehrlich, Senior Counsel, at (202) 551– 6819; Lisa Reid Ragen, Branch Chief, at (202) 551–6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: 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 early withdrawal charges and asset-based distribution fees and/or service fees with respect to certain classes. Applicants: SharesPost 100 Fund (the ‘‘Initial Fund’’) and Liberty Street Advisors, Inc. (the ‘‘Adviser’’ and together with the Initial Fund, the ‘‘Applicants’’). Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may DATES: 25 17 E:\FR\FM\16APN1.SGM CFR 200.30–3(a)(12). 16APN1 Federal Register / Vol. 86, No. 72 / Friday, April 16, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES request a hearing by emailing the Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicants with a copy of the request by email. Hearing requests should be received by the Commission by 5:30 p.m. on April 30, 2021 and should be accompanied by proof of service on the Applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing to the Commission’s Secretary at SecretarysOffice@sec.gov. 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 Initial Fund is a Delaware statutory trust that is registered under the Act as a closed-end management investment company and operated as an interval fund pursuant to rule 23c–3 under the Act. The investment objective of the Initial Fund is capital appreciation, which is a fundamental policy of the Initial Fund. The Initial Fund pursues its investment objective primarily by investing in the equity securities (e.g., common and/or preferred stock, or equity-linked securities convertible into such equity securities) of certain private, operating, late-stage, growth companies primarily comprising the SharesPost 100, a list of companies selected and maintained by the Adviser. 2. The Adviser is a New York corporation and is an investment adviser registered with the Commission under the Investment Advisers Act of 1940. The Adviser serves as investment adviser to the Initial Fund. 3. Applicants seek an order (‘‘Order’’) to permit the Funds (as defined below) to issue multiple classes of shares, each having its own fee and expense structure and to impose early withdrawal charges (‘‘EWCs’’) and assetbased distribution and/or service fees with respect to certain classes. 4. 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 VerDate Sep<11>2014 19:57 Apr 15, 2021 Jkt 253001 Adviser or any entity controlling, controlled by, or under common control with the Adviser, or any successor in interest to any such entity,1 acts as investment adviser and that 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 Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’) (each, a ‘‘Future Fund’’ and together with the Initial Fund, the ‘‘Funds’’).2 5. The Initial Fund is currently offering Class A, Class I and Class L common shares of beneficial interest (‘‘Initial Class Shares’’) on a continuous basis in connection with its current registration statement and an exemptive order issued to the Initial Fund and its previous investment adviser by the Commission (the ‘‘Previous Order’’) 3 granting substantially the same relief as is sought herein. On December 9, 2020, the Adviser became the investment adviser to the Initial Fund, at which time the Initial Fund was no longer permitted to rely on the Previous Order.4 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, and the Funds do not expect there to be a secondary trading market for their shares. 6. If the requested relief is granted, the Initial Fund intends to continue to continuously offer the Initial Class Shares, and may offer one or more additional classes of shares (the ‘‘New 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 Applicants represent that any of the Funds relying on this relief in the future will do so in a manner consistent with the terms and conditions of the application. Applicants further represent that each entity presently intending to rely on the requested relief is listed as an Applicant. 3 SharesPost 100 Fund and SP Investments Management, LLC, Release No. 32768 (July 31, 2017)(Notice) and Release No. 32799 (Aug. 28, 2017) (Order). 4 In reliance on the Commission staff no-action letter issued to Innovator Capital Management, LLC, et al. (pub. avail. October 6, 2017) and oral discussions with the Commission staff, the Applicants intend to rely on the Previous Order as if the Previous Order extended to the Adviser until the earlier of the receipt of the Order or 150 days from December 9, 2020, the execution date of the new investment advisory agreement between the Fund and the Adviser. During such time, the Adviser will comply with the terms and conditions in the Previous Order imposed on the Initial Fund’s previous investment adviser as though such terms and conditions were imposed directly on the Adviser. When and if the Order is granted by the Commission, the Applicants would then rely on the Order, rather than continuing to rely on the Previous Order. PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 20223 Class Shares’’). Each of the Initial Class Shares have, and each of the New Class Shares will have, its own fee and expense structure. Because of the different distribution and/or service fees, services and any other class expenses that may be attributable to each class of shares, the net income attributable to, and the dividends payable on, each class of shares may differ from each other. 7. Applicants state that, from time to time, the Funds may create additional classes of shares, the terms of which may differ from their other share classes in the following respects: (i) The amount of fees permitted by different distribution plans and/or different service fee arrangements; (ii) voting rights with respect to a distribution and/ or service plan of a class; (iii) different class designations; (iv) the impact of any class expenses directly attributable to a particular class of shares allocated on a class basis as described in the application; (v) any differences in dividends and net asset value resulting from differences in fees under a distribution plan and/or service fee arrangement or in class expenses; (vi) any EWC or other sales load structure; and (vii) exchange or conversion privileges of the classes as permitted under the Act. 8. Applicants state that the Initial Fund has adopted a fundamental policy to make quarterly repurchase offers for 5% of the shares outstanding at their net asset value (‘‘NAV’’) less any repurchase fee. Such repurchase offers will be conducted pursuant to rule 23c–3 under the Act. Each of the other Funds will likewise adopt fundamental investment policies and make periodic repurchase offers to its shareholders in compliance with rule 23c–3 or will provide periodic liquidity with respect to its shares pursuant to rule 13e–4 under the Exchange Act.5 Any repurchase offers made by the Funds will be made to all holders of shares of each such Fund as of the selected record date. 9. Applicants represent that any assetbased service and/or distribution fees for each class of shares of the Funds will comply with the provisions of FINRA rule 2341 (formerly NASD rule 2830(d)) (the ‘‘FINRA Sales Charge Rule’’).6 Applicants also represent that each Fund will include in its prospectus 5 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, as amended. 6 Any reference in the application to the FINRA Sales Charge Rule includes any successor or replacement to the FINRA Sales Charge Rule. E:\FR\FM\16APN1.SGM 16APN1 20224 Federal Register / Vol. 86, No. 72 / Friday, April 16, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES disclosure of the fees, expenses and other characteristics of each class of shares offered for sale by the prospectus, as is required for open-end multi-class funds under Form N–1A.7 As is required for open-end funds, each Fund will disclose fund expenses borne by shareholders during the reporting period in shareholder reports, and describe in their prospectuses any arrangements that result in breakpoints in, or elimination of, sales loads.8 In addition, applicants will comply with applicable enhanced fee disclosure requirements for fund of funds.9 10. Each Fund will comply with any requirements that the 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. 11. Each Fund will allocate all expenses incurred by it among the various classes of shares based on the net assets of that Fund attributable to each such class, except that the net asset value and expenses of each class will reflect the expenses associated with the distribution and/or service plan of that class (if any), service fees attributable to that class (if any), including transfer agency fees, and any other incremental expenses of that class. Expenses of a Fund allocated to a particular class of shares will be borne on a pro rata basis by each outstanding share of that class. Applicants state that each Fund will comply with the provisions of rule 18f– 3 under the Act as if it were an openend investment company. 12. Applicants state that each Fund may impose an EWC on shares submitted for repurchase that have been held less than a specified period and 7 In all respects other than class by class disclosure, each Fund will comply with the requirements of Form N–2. 8 See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies, Investment Company Act Release No. 26372 (Feb. 27, 2004) (adopting release); and Disclosure of Breakpoint Discounts by Mutual Funds, Investment Company Act Release No. 26464 (June 7, 2004) (adopting release). 9 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. VerDate Sep<11>2014 19:57 Apr 15, 2021 Jkt 253001 may grant waivers of the EWCs on repurchases in connection with certain categories of shareholders or transactions established from time to time. Applicants state that each Fund will apply the EWC (and any waivers, scheduled variations or eliminations 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. 13. Each Fund that operates or will operate 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 such Fund’s periodic repurchase offers, exchange their shares of the Fund for shares of the same class of (i) registered open-end investment companies or (ii) other registered closed-end investment companies that comply with rule 23c– 3 under the Act and continuously offer their shares at net asset value, that are in the Fund’s group of investment companies (collectively, the ‘‘Other Funds’’). Shares of a Fund operating pursuant to rule 23c–3 that are exchanged for shares of Other Funds will be included as part of the 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 provides that a closed-end investment company may not issue or sell a senior security that is a stock unless certain requirements are met. Applicants acknowledge 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 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 acknowledge that the creation of multiple classes of shares of the Funds may be prohibited by section 18(c), as a class may have priority over another class as to payment of dividends because shareholders of PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 different classes would pay different fees and expenses. 3. Section 18(i) of the Act provides that each share of stock issued by a registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants acknowledge 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/or services and voting rights 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 concerns underlying section 18 of the Act to any greater degree than open-end investment companies’ multiple class structures. 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 a registered closed-end investment company (an ‘‘interval fund’’) to make E:\FR\FM\16APN1.SGM 16APN1 jbell on DSKJLSW7X2PROD with NOTICES Federal Register / Vol. 86, No. 72 / Friday, April 16, 2021 / Notices 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. Applicants state that the Initial Fund currently waives, but may charge, and Future Funds may charge, an early repurchase fee (‘‘Early Repurchase Fee’’) at a rate of no greater than 2 percent of the aggregate net asset value of a shareholder’s shares repurchased by the Fund 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. Applicants represent that any Early Repurchase Fee imposed by a Fund will apply equally to all New Class Shares and to all classes of shares of such Fund, consistent with section 18 of the Act and rule 18f–3 thereunder. 4. Applicants request relief under section 6(c), discussed above, and section 23(c)(3) from rule 23c-3 to the extent necessary for the Funds to impose EWCs on shares of the Funds submitted for repurchase that have been held for less than a specified period. 5. Applicants state that the EWCs they intend to impose are functionally similar to CDSLs imposed by open-end investment companies under rule 6c-10 under the Act. Rule 6c-10 permits openend investment companies to impose CDSLs, subject to certain conditions. Applicants note that rule 6c–10 is grounded in policy considerations supporting the employment of CDSLs where there are adequate safeguards for the investor, and state that the same policy considerations support imposition of EWCs in the interval fund context. In addition, applicants state that EWCs may be necessary for the distributor to recover distribution costs. Applicants represent that any EWC imposed by the Funds will comply with rule 6c–10 under the Act as if the rule were applicable to closed-end funds. Applicants further represent that each Fund will disclose EWCs in accordance VerDate Sep<11>2014 19:57 Apr 15, 2021 Jkt 253001 with the requirements of Form N–1A concerning CDSLs as if the Fund were an open-end investment company. Asset-based Distribution and/or Service Fees 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit an affiliated person of a registered investment company, or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section 17(d) and rule 17d–1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants. 2. Rule 17d-3 under the Act provides an exemption from section 17(d) and rule 17d–1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b–1 under the Act. Applicants request an Order under section 17(d) and rule 17d–1 under the Act to the extent necessary to permit the Funds to impose asset-based distribution and/or service fees. Applicants represent that the Funds will comply with rules 12b– 1 and 17d–3 as if those rules applied to closed-end investment companies. 3. For the reasons stated above, applicants submit that the exemptions requested 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 ensure that applicants do not unfairly discriminate against any holders of the class of securities to be purchased. Finally, applicants state that the Funds’ imposition of asset-based distribution and/or service fees is consistent with the provisions, policies and purposes of the Act and does not involve participation on a basis different from or less advantageous than that of other participants. Applicants’ Condition: Applicants agree that any Order granting the requested relief will be subject to the following condition: PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 20225 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 or replaced, as if those rules applied to closed-end management investment companies, and will comply with the FINRA 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. 2021–07269 Filed 4–15–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–91529; File No. SR– NYSEAMER–2021–17] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.37E April 12, 2021. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on April 1, 2021, NYSE American LLC (‘‘NYSE American’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 7.37E to specify when the Exchange may adjust its calculation of the PBBO. 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. 15 U.S.C. 78s(b)(1). 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 2 E:\FR\FM\16APN1.SGM 16APN1

Agencies

[Federal Register Volume 86, Number 72 (Friday, April 16, 2021)]
[Notices]
[Pages 20222-20225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07269]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34240; 812-15185]


SharesPost 100 Fund and Liberty Street Advisors, Inc.

AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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SUMMARY: The following is a summary of the application from SharesPost 
100 Fund (the ``Initial Fund'') and Liberty Street Advisors, Inc. (the 
``Adviser'' and together with the Initial Fund, the ``Applicants'').

DATES: The application was filed on December 14, 2020, and amended on 
March 2, 2021.

ADDRESSES: The Commission: [email protected]. Applicants: c/o 
Andrew Nowack, by email to [email protected].

FOR FURTHER INFORMATION CONTACT: Jill Ehrlich, Senior Counsel, at (202) 
551-6819; Lisa Reid Ragen, Branch Chief, at (202) 551-6825 (Division of 
Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: 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 early withdrawal charges and 
asset-based distribution fees and/or service fees with respect to 
certain classes.
    Applicants: SharesPost 100 Fund (the ``Initial Fund'') and Liberty 
Street Advisors, Inc. (the ``Adviser'' and together with the Initial 
Fund, the ``Applicants'').
    Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may

[[Page 20223]]

request a hearing by emailing the Commission's Secretary at [email protected] and serving Applicants with a copy of the request by 
email. Hearing requests should be received by the Commission by 5:30 
p.m. on April 30, 2021 and should be accompanied by proof of service on 
the Applicants, in the form of an affidavit, or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by emailing to the 
Commission's Secretary at [email protected].
    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 Initial Fund is a Delaware statutory trust that is 
registered under the Act as a closed-end management investment company 
and operated as an interval fund pursuant to rule 23c-3 under the Act. 
The investment objective of the Initial Fund is capital appreciation, 
which is a fundamental policy of the Initial Fund. The Initial Fund 
pursues its investment objective primarily by investing in the equity 
securities (e.g., common and/or preferred stock, or equity-linked 
securities convertible into such equity securities) of certain private, 
operating, late-stage, growth companies primarily comprising the 
SharesPost 100, a list of companies selected and maintained by the 
Adviser.
    2. The Adviser is a New York corporation and is an investment 
adviser registered with the Commission under the Investment Advisers 
Act of 1940. The Adviser serves as investment adviser to the Initial 
Fund.
    3. Applicants seek an order (``Order'') to permit the Funds (as 
defined below) to issue multiple classes of shares, each having its own 
fee and expense structure and to impose early withdrawal charges 
(``EWCs'') and asset-based distribution and/or service fees with 
respect to certain classes.
    4. 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 any entity controlling, controlled by, or under 
common control with the Adviser, or any successor in interest to any 
such entity,\1\ acts as investment adviser and that 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 
Securities Exchange Act of 1934, as amended (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\ Applicants represent that any of the Funds relying on this 
relief in the future will do so in a manner consistent with the 
terms and conditions of the application. Applicants further 
represent that each entity presently intending to rely on the 
requested relief is listed as an Applicant.
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    5. The Initial Fund is currently offering Class A, Class I and 
Class L common shares of beneficial interest (``Initial Class Shares'') 
on a continuous basis in connection with its current registration 
statement and an exemptive order issued to the Initial Fund and its 
previous investment adviser by the Commission (the ``Previous Order'') 
\3\ granting substantially the same relief as is sought herein. On 
December 9, 2020, the Adviser became the investment adviser to the 
Initial Fund, at which time the Initial Fund was no longer permitted to 
rely on the Previous Order.\4\ 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, 
and the Funds do not expect there to be a secondary trading market for 
their shares.
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    \3\ SharesPost 100 Fund and SP Investments Management, LLC, 
Release No. 32768 (July 31, 2017)(Notice) and Release No. 32799 
(Aug. 28, 2017) (Order).
    \4\ In reliance on the Commission staff no-action letter issued 
to Innovator Capital Management, LLC, et al. (pub. avail. October 6, 
2017) and oral discussions with the Commission staff, the Applicants 
intend to rely on the Previous Order as if the Previous Order 
extended to the Adviser until the earlier of the receipt of the 
Order or 150 days from December 9, 2020, the execution date of the 
new investment advisory agreement between the Fund and the Adviser. 
During such time, the Adviser will comply with the terms and 
conditions in the Previous Order imposed on the Initial Fund's 
previous investment adviser as though such terms and conditions were 
imposed directly on the Adviser. When and if the Order is granted by 
the Commission, the Applicants would then rely on the Order, rather 
than continuing to rely on the Previous Order.
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    6. If the requested relief is granted, the Initial Fund intends to 
continue to continuously offer the Initial Class Shares, and may offer 
one or more additional classes of shares (the ``New Class Shares''). 
Each of the Initial Class Shares have, and each of the New Class Shares 
will have, its own fee and expense structure. Because of the different 
distribution and/or service fees, services and any other class expenses 
that may be attributable to each class of shares, the net income 
attributable to, and the dividends payable on, each class of shares may 
differ from each other.
    7. Applicants state that, from time to time, the Funds may create 
additional classes of shares, the terms of which may differ from their 
other share classes in the following respects: (i) The amount of fees 
permitted by different distribution plans and/or different service fee 
arrangements; (ii) voting rights with respect to a distribution and/or 
service plan of a class; (iii) different class designations; (iv) the 
impact of any class expenses directly attributable to a particular 
class of shares allocated on a class basis as described in the 
application; (v) any differences in dividends and net asset value 
resulting from differences in fees under a distribution plan and/or 
service fee arrangement or in class expenses; (vi) any EWC or other 
sales load structure; and (vii) exchange or conversion privileges of 
the classes as permitted under the Act.
    8. Applicants state that the Initial Fund has adopted a fundamental 
policy to make quarterly repurchase offers for 5% of the shares 
outstanding at their net asset value (``NAV'') less any repurchase fee. 
Such repurchase offers will be conducted pursuant to rule 23c-3 under 
the Act. Each of the other Funds will likewise adopt fundamental 
investment policies and make periodic repurchase offers to its 
shareholders in compliance with rule 23c-3 or will provide periodic 
liquidity with respect to its shares pursuant to rule 13e-4 under the 
Exchange Act.\5\ Any repurchase offers made by the Funds will be made 
to all holders of shares of each such Fund as of the selected record 
date.
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    \5\ 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, as 
amended.
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    9. Applicants represent that any asset-based service and/or 
distribution fees for each class of shares of the Funds will comply 
with the provisions of FINRA rule 2341 (formerly NASD rule 2830(d)) 
(the ``FINRA Sales Charge Rule'').\6\ Applicants also represent that 
each Fund will include in its prospectus

[[Page 20224]]

disclosure of the fees, expenses and other characteristics of each 
class of shares offered for sale by the prospectus, as is required for 
open-end multi-class funds under Form N-1A.\7\ As is required for open-
end funds, each Fund will disclose fund expenses borne by shareholders 
during the reporting period in shareholder reports, and describe in 
their prospectuses any arrangements that result in breakpoints in, or 
elimination of, sales loads.\8\ In addition, applicants will comply 
with applicable enhanced fee disclosure requirements for fund of 
funds.\9\
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    \6\ Any reference in the application to the FINRA Sales Charge 
Rule includes any successor or replacement to the FINRA Sales Charge 
Rule.
    \7\ In all respects other than class by class disclosure, each 
Fund will comply with the requirements of Form N-2.
    \8\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release); and 
Disclosure of Breakpoint Discounts by Mutual Funds, Investment 
Company Act Release No. 26464 (June 7, 2004) (adopting release).
    \9\ 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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    10. Each Fund will comply with any requirements that the 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.
    11. Each Fund will allocate all expenses incurred by it among the 
various classes of shares based on the net assets of that Fund 
attributable to each such class, except that the net asset value and 
expenses of each class will reflect the expenses associated with the 
distribution and/or service plan of that class (if any), service fees 
attributable to that class (if any), including transfer agency fees, 
and any other incremental expenses of that class. Expenses of a Fund 
allocated to a particular class of shares will be borne on a pro rata 
basis by each outstanding share of that class. Applicants state that 
each Fund will comply with the provisions of rule 18f-3 under the Act 
as if it were an open-end investment company.
    12. 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 grant waivers of the EWCs on repurchases in connection 
with certain categories of shareholders or transactions established 
from time to time. Applicants state that each Fund will apply the EWC 
(and any waivers, scheduled variations or eliminations 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.
    13. Each Fund that operates or will operate 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 such Fund's periodic repurchase offers, exchange their 
shares of the Fund for shares of the same class of (i) registered open-
end investment companies or (ii) other registered closed-end investment 
companies that comply with rule 23c-3 under the Act and continuously 
offer their shares at net asset value, that are in the Fund's group of 
investment companies (collectively, the ``Other Funds''). Shares of a 
Fund operating pursuant to rule 23c-3 that are exchanged for shares of 
Other Funds will be included as part of the 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 provides that a closed-end 
investment company may not issue or sell a senior security that is a 
stock unless certain requirements are met. Applicants acknowledge 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 
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 acknowledge that the creation of 
multiple classes of shares of the Funds may be prohibited by section 
18(c), as a class may have priority over another class as to payment of 
dividends because shareholders of different classes would pay different 
fees and expenses.
    3. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants acknowledge 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/or services and voting rights 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 concerns underlying section 18 of the Act to any greater 
degree than open-end investment companies' multiple class structures. 
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 a registered closed-end 
investment company (an ``interval fund'') to make

[[Page 20225]]

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. Applicants state 
that the Initial Fund currently waives, but may charge, and Future 
Funds may charge, an early repurchase fee (``Early Repurchase Fee'') at 
a rate of no greater than 2 percent of the aggregate net asset value of 
a shareholder's shares repurchased by the Fund 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. Applicants 
represent that any Early Repurchase Fee imposed by a Fund will apply 
equally to all New Class Shares and to all classes of shares of such 
Fund, consistent with section 18 of the Act and rule 18f-3 thereunder.
    4. Applicants request relief under section 6(c), discussed above, 
and section 23(c)(3) from rule 23c-3 to the extent necessary for the 
Funds to impose EWCs on shares of the Funds submitted for repurchase 
that have been held for less than a specified period.
    5. Applicants state that the EWCs they intend to impose are 
functionally similar to CDSLs imposed by open-end investment companies 
under rule 6c-10 under the Act. Rule 6c-10 permits open-end investment 
companies to impose CDSLs, subject to certain conditions. Applicants 
note that rule 6c-10 is grounded in policy considerations supporting 
the employment of CDSLs where there are adequate safeguards for the 
investor, and state that the same policy considerations support 
imposition of EWCs in the interval fund context. In addition, 
applicants state that EWCs may be necessary for the distributor to 
recover distribution costs. Applicants represent that any EWC imposed 
by the Funds will comply with rule 6c-10 under the Act as if the rule 
were applicable to closed-end funds. Applicants further represent that 
each Fund will disclose EWCs in accordance with the requirements of 
Form N-1A concerning CDSLs as if the Fund were an open-end investment 
company.

Asset-based Distribution and/or Service Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company, or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an Order under section 17(d) and rule 17d-1 under 
the Act to the extent necessary to permit the Funds to impose asset-
based distribution and/or service fees. Applicants represent that the 
Funds will comply with rules 12b-1 and 17d-3 as if those rules applied 
to closed-end investment companies.
    3. For the reasons stated above, applicants submit that the 
exemptions requested 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 
ensure that applicants do not unfairly discriminate against any holders 
of the class of securities to be purchased. Finally, applicants state 
that the Funds' imposition of asset-based distribution and/or service 
fees is consistent with the provisions, policies and purposes of the 
Act and does not involve participation on a basis different from or 
less advantageous than that of other participants.

Applicants' Condition:

    Applicants agree that any Order granting the requested relief will 
be subject to the following condition:
    Each Fund relying on the Order will comply with the provisions of 
rules 6c-10, 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3 
under the Act, as amended from time to time or replaced, as if those 
rules applied to closed-end management investment companies, and will 
comply with the FINRA 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. 2021-07269 Filed 4-15-21; 8:45 am]
BILLING CODE 8011-01-P
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