Apollo Credit Management, LLC and Apollo Debt Solutions BDC, 998-1000 [2022-00065]
Download as PDF
<![CDATA[
998
Federal Register / Vol. 87, No. 5 / Friday, January 7, 2022 / Notices
Filing Dates: The application was
filed on September 13, 2021, and
amended on December 3, 2021.
Applicant’s Address: legalnotices@
stoneridgeam.com.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–00064 Filed 1–6–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93891; File No. SR–
NASDAQ–2021–054]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Designation of a Longer Period for
Commission Action on Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change
To Modify Listing Rule IM–5101–2 To
Permit an Acquisition Company To
Contribute a Portion of Its Deposit
Account to Another Entity in a Spin-Off
or Similar Corporate Transaction
January 3, 2022.
On June 24, 2021, The Nasdaq Stock
Market LLC (‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
modify Listing Rule IM–5101–2 to
permit an acquisition company to
contribute a portion of the amount held
in its deposit account to a deposit
account of a new acquisition company
in a spin-off or similar corporate
transaction. The proposed rule change
was published for comment in the
Federal Register on July 13, 2021.3
On August 25, 2021, pursuant to
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 On September
30, 2021, the Commission instituted
proceedings under Section 19(b)(2)(B) of
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 92344
(July 7, 2021), 86 FR 36841. Comments received on
the proposal are available on the Commission’s
website at: https://www.sec.gov/comments/srnasdaq-2021-054/srnasdaq2021054.htm.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 92751,
86 FR 48780 (Aug. 31, 2021).
the Act 6 to determine whether to
approve or disapprove the proposed
rule change.7
Section 19(b)(2) of the Act 8 provides
that, after initiating proceedings, the
Commission shall issue an order
approving or disapproving the proposed
rule change not later than 180 days after
the date of publication of notice of filing
of the proposed rule change. The
Commission may extend the period for
issuing an order approving or
disapproving the proposed rule change,
however, by not more than 60 days if
the Commission determines that a
longer period is appropriate and
publishes the reasons for such
determination. The proposed rule
change was published for comment in
the Federal Register on July 13, 2021.9
The 180th day after publication of the
proposed rule change is January 9, 2022.
The Commission is extending the time
period for approving or disapproving
the proposed rule change for an
additional 60 days.
The Commission finds that it is
appropriate to designate a longer period
within which to issue an order
approving or disapproving the proposed
rule change so that it has sufficient time
to consider the proposed rule change
and comments received. Accordingly,
the Commission, pursuant to Section
19(b)(2) of the Act,10 designates March
10, 2022, as the date by which the
Commission shall either approve or
disapprove the proposed rule change
(File Number SR–NASDAQ–2021–054).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–00058 Filed 1–6–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34461; 812–15192, 812–15192–01]
Apollo Credit Management, LLC and
Apollo Debt Solutions BDC
January 3, 2022.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
tkelley on DSK125TN23PROD with NOTICE
2 17
VerDate Sep<11>2014
17:08 Jan 06, 2022
Jkt 256001
6 15
U.S.C. 78s(b)(2)(B).
Securities Exchange Act Release No. 93219,
86 FR 55664 (Oct. 6, 2021).
8 15 U.S.C. 78s(b)(2).
9 See supra note 3.
10 15 U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(57).
7 See
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
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),
18(i) and Section 61(a) of the Act.
Applicants
request an order to permit certain
closed-end management investment
companies that have elected to be
regulated as business development
companies (‘‘BDCs’’) to issue multiple
classes of shares with varying sales
loads and asset-based service and/or
distribution fees.
SUMMARY OF APPLICATION:
Apollo Credit Management,
LLC (the ‘‘Current Investment Adviser’’)
and Apollo Debt Solutions BDC
(‘‘ADSB’’).
APPLICANTS:
The application was filed
on January 7, 2021, and amended on
July 23, 2021, November 5, 2021, and
December 22, 2021.
FILING DATES:
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 applicants
with a copy of the request by email.
Hearing requests should be received by
the Commission by 5:30 p.m. on January
28, 2022, 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 1940 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.
HEARING OR NOTIFICATION OF HEARING:
The Commission:
Secretarys-Office@sec.gov. Applicants:
Joseph D. Glatt, Apollo Credit
Management, LLC, JGlatt@apollo.com.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Stephan N. Packs, Senior Counsel, at
(202) 551–6853, or Terri G. Jordan,
Branch Chief, at (202) 551–6825
(Division of Investment Management,
Chief Counsel’s Office).
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.
SUPPLEMENTARY INFORMATION:
E:\FR\FM\07JAN1.SGM
07JAN1
Federal Register / Vol. 87, No. 5 / Friday, January 7, 2022 / Notices
Applicants’ Representations
1. ADSB is a newly organized
Delaware statutory trust that is an
externally-managed, non-diversified
closed-end management investment
company that has elected to be
regulated as a BDC under the Act.1
ADSB’s investment objectives are to
generate current income and, to a lesser
extent, long-term capital appreciation by
seeking to invest primarily in certain
directly originated assets, including
debt securities, made to or issued by
large private U.S. borrowers.
2. The Current Investment Adviser is
registered as an investment adviser
under the Investment Advisers Act of
1940 and serves as investment adviser
to ADSB.
3. Applicants seek an order to permit
ASBD and other Funds (defined below)
to offer investors multiple classes of
shares, interests or units of beneficial
interest, as the case may be (‘‘Shares’’)
with varying sales loads and asset-based
service and/or distribution fees.
4. Applicants request that the order
also apply to any continuously offered
registered closed-end management
investment company that elects to be
regulated as a BDC that has been
previously organized or that may be
organized in the future for which the
Current Investment Adviser or any
entity controlling, controlled by, or
under common control with the Current
Investment Adviser, or any successor in
interest to any such entity,2 acts as
investment adviser and which operates
as an interval fund pursuant to Rule
23c–3 under the Act and/or periodically
offers to repurchase its Shares pursuant
to Rule 13e–4 under the Securities
Exchange Act of 1934 (‘‘Exchange Act’’)
and Section 23(c)(2) of the Act (each, a
‘‘Future Fund’’ and together with ADSB,
the ‘‘Funds’’).3
5. As a BDC, each Fund will be
organized as a closed-end investment
company, but will offer its Shares
continuously, similar to an open-end
management investment company.
Shares of the Funds will not be offered
or traded in a secondary market and will
not be listed on any securities exchange
tkelley on DSK125TN23PROD with NOTICE
1 Section
2(a)(48) of the Act defines a BDC to be
any closed-end investment company that operates
for the purpose of making investments in securities
described in Sections 55(a)(1) through 55(a)(3) of
the Act and makes available significant managerial
assistance with respect to the issuers of such
securities.
2 For purposes of the requested order, ‘‘successor’’
is limited to any entity that results from a
reorganization into another jurisdiction or a change
in the type of a business organization.
3 Any Fund relying on this relief in the future will
do so in compliance with the terms and conditions
of the application.
VerDate Sep<11>2014
17:08 Jan 06, 2022
Jkt 256001
and do not trade on an over-the-counter
system.4
6. Each Fund is seeking the ability to
offer multiple classes of Shares that may
charge differing front-end sales loads,
contingent deferred sales charges
(‘‘CDSCs’’), an early withdrawal charge
(‘‘Repurchase Fee’’), and/or annual
asset-based service and/or distribution
fees. Each class of Shares will comply
with the provisions of Rule 2310 of the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) Manual
(‘‘FINRA Rule 2310’’).5
7. Any Share of a Fund that is subject
to asset-based service or distribution
fees shall convert to a class with no
asset-based service or distribution fees
upon such Share reaching the
applicable sales charge cap determined
in accordance with FINRA Rule 2310.
Further, if a class of Shares were to be
listed on an exchange in the future, all
other then-existing classes of Shares of
the listing Fund will be converted into
the listed class, without the imposition
of any sales load, fee or other charge.
8. In order to provide a limited degree
of liquidity to shareholders, Applicants
state that each Fund may from time to
time offer to repurchase Shares in
accordance with Rule 13e–4 under the
Exchange Act and Section 23(c)(2) of the
Act. Applicants state further that
repurchases of each Fund’s Shares will
be made at such times, in such amounts
and on such terms as may be
determined by the applicable Fund’s
board of trustees or directors in its sole
discretion.
9. Each Fund will disclose in its
prospectus the fees, expenses and other
characteristics of each class of Shares
offered for sale by the prospectus, as is
required for open-end, multiple-class
funds under Form N–1A. As if it were
an open-end management investment
company, each Fund will disclose fund
expenses in shareholder reports,6 and
disclose in its prospectus any
arrangements that result in breakpoints
in, or elimination of, sales loads.7 Each
Fund will also comply with any
requirements the Commission or FINRA
may adopt regarding disclosure at the
4 Applicants are not requesting relief with respect
to any Fund listed on a securities exchange. Any
Fund which relies on the relief requested herein
will cease relying on such relief upon the listing of
any class of its Shares on a securities exchange.
5 Any reference to FINRA Rule 2310 includes any
successor or replacement rule that may be adopted
by FINRA.
6 See Shareholder Reports and Quarterly Portfolio
Disclosure of Registered Management Investment
Companies, Investment Co. Act Rel. No. 26372 (Feb.
27, 2004) (adopting release).
7 See Disclosure of Breakpoint Discounts by
Mutual Funds, Investment Co. Act Rel. No. 26464
(June 7, 2004) (adopting release).
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
999
point of sale and in transaction
confirmations about the costs and
conflicts of interest arising out of the
distribution of open-end management
investment company shares, and
regarding prospectus disclosure of sales
loads and revenue sharing arrangements
as if those requirements applied to the
Fund.8 Each Fund will contractually
require that any distributor of a Fund’s
Shares comply with such requirements
in connection with the distribution of
such Fund’s shares.
10. Distribution fees will be paid
pursuant to a plan of distribution
adopted by each Fund in compliance
with Rules 12b–1 and 17d–3 under the
Act, as if those rules applied to closedend funds electing to be regulated as
BDCs, with respect to a class (a
‘‘Distribution Plan’’).
11. Each Fund will allocate all
expenses incurred by it among the
various classes of Shares based on the
respective net assets of the 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 Plan of
that class (if any), shareholder servicing
fees attributable to a particular class
(including transfer agency fees, if any)
and any other incremental expenses of
that class. Expenses of the Fund
allocated to a particular class of the
Fund’s 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 management investment
company.
12. Any Fund that imposes a CDSC
will comply with the provisions of Rule
6c–10 (except to the extent a Fund will
comply with FINRA Rule 2310 rather
than FINRA Rule 2341, as such rule may
be amended (‘‘FINRA Rule 2341’’)), as if
that rule applied to BDCs. With respect
to any waiver of, scheduled variation in,
or elimination of the CDSC, a Fund will
comply with the requirements of Rule
22d–1 under the Act as if the Fund were
an open-end management investment
company. Each Fund also will disclose
CDSCs in accordance with the
requirements of Form N–1A concerning
CDSCs as if the Fund were an open-end
management investment company.
13. Funds may impose a Repurchase
Fee at a rate no greater than 2% of the
shareholder’s repurchase proceeds if the
8 See Confirmation Requirements and Point of
Sale Disclosure Requirements for Transactions in
Certain Mutual Funds and Other Securities, and
Other Confirmation Requirement Amendments, and
Amendments to the Registration Form for Mutual
Funds, Investment Co. Act Rel. No. 26341 (Jan. 29,
2004) (proposing release).
E:\FR\FM\07JAN1.SGM
07JAN1
1000
Federal Register / Vol. 87, No. 5 / Friday, January 7, 2022 / Notices
interval between the date of purchase of
the Shares and the valuation date with
respect to the repurchase of such Shares
is less than a specified period. Any
Repurchase Fee will apply equally to all
shareholders of the applicable Fund,
regardless of class, consistent with
Section 18 of the Act and Rule 18f–3
under the Act. To the extent a Fund
determines to waive, impose scheduled
variations of, or eliminate any
Repurchase Fees, it will do so
consistently with the requirements of
Rule 22d–1 under the Act as if the
Repurchase Fee were a CDSC and as if
the Fund were an open-end investment
company and the Fund’s waiver of,
scheduled variation in, or elimination
of, the Repurchase Fee will apply
uniformly to all shareholders of the
Fund.
tkelley on DSK125TN23PROD with NOTICE
Applicants’ Legal Analysis
Multiple Classes of Shares
1. Section 18(a)(2) of the Act provides
that a closed-end investment company
may not issue or sell a senior security
that is a stock unless certain
requirements are met. Applicants state
that the creation of multiple classes of
shares of the Funds may violate Section
18(a)(2), which is made applicable to
BDCs through Section 61(a) of the Act,
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 state that the creation of
multiple classes of Shares of the Funds
may be prohibited by Section 18(c),
which is made applicable to BDCs
through Section 61(a) of the Act, 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 state that multiple classes of
shares of the Funds may violate Section
18(i) of the Act, which is made
applicable to BDCs through Section
61(a) 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
VerDate Sep<11>2014
17:08 Jan 06, 2022
Jkt 256001
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)
(which are made applicable to BDCs by
Section 61(a) of the Act) to permit the
Funds to issue multiple classes of
Shares.
5. Applicants submit that the
proposed allocation of expenses relating
to distribution and voting rights among
multiple classes is equitable and will
not discriminate against any group or
class of shareholders. Applicants submit
that the proposed arrangements would
permit a Fund to facilitate the
distribution of its Shares and provide
investors with a broader choice of fee
options. Applicants assert that the
proposed BDC multiple class structure
does not raise the concerns underlying
Section 18 of the Act to any greater
degree than open-end management
investment companies’ multiple class
structures that are permitted by Rule
18f–3 under the Act.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
1. Each Fund will comply with the
provisions of Rules 6c–10 (except to the
extent a Fund will comply with FINRA
Rule 2310 rather than FINRA Rule
2341), 12b–1, 17d–3, 18f–3, 22d–1, and,
where applicable, 11a–3 under the 1940
Act, as amended from time to time, or
any successor rules thereto, as if those
rules applied to BDCs. In addition, each
Fund will comply with FINRA Rule
2310, as amended from time to time, or
any successor rule thereto, and will
make available to any distributor of a
Fund’s shares all of the information
necessary to permit the distributor to
prepare client account statements in
compliance with FINRA Rule 2231.
For the Commission, by the Division of
Investment Management, under delegated
authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–00065 Filed 1–6–22; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
SURFACE TRANSPORTATION BOARD
[Docket No. FD 36573]
Western Nevada Railroad, LLC—Lease
and Operation Exemption—Line in
Churchill County, Nev.
Western Nevada Railroad, LLC
(WNRR), a noncarrier, has filed a
verified notice of exemption under 49
CFR 1150.31 to enter into an agreement
to lease and operate 4,100 feet of
existing track at the Fernley Business
Park (FBP) at or near Fernley/Darwin,
Churchill County, Nev. (the Line).
WNRR states that the Line connects to
a rail line owned by Union Pacific
Railroad Company (UP), over which
BNSF Railway Company (BNSF) also
has service rights. According to WNRR,
the Line is currently private industry
track that is served by UP and BNSF
with switching service provided by a
third-party contract switching operator,
Western Nevada Transload, LLC (WNT).
WNRR states that it will enter into a
lease and operating agreement for the
Line with Fernley Business Park, LLC,
the owner of FBP. WNRR states that it
will also obtain the right to construct
additional industrial tracks in FBP to
attract additional customers and rail
business, and that WNT will continue to
provide contract switching service on
the Line until the buildout is complete
and additional rail-served industries
locate at FBP.
WNRR states that no interchange
commitments are being imposed on its
operations by the lease and operating
agreement. WNRR certifies that its
projected revenues as a result of the
transaction will not exceed those that
would qualify it as a Class III carrier and
will not exceed $5 million.
The transaction may be consummated
on or after January 21, 2022, the
effective date of the exemption (30 days
after the verified notice was filed).
If the verified notice contains false or
misleading information, the exemption
is void ab initio. Petitions to revoke the
exemption under 49 U.S.C. 10502(d)
may be filed at any time. The filing of
a petition to revoke will not
automatically stay the effectiveness of
the exemption. Petitions for stay must
be filed no later than January 14, 2022
(at least seven days before the
exemption becomes effective).
All pleadings, referring to Docket No.
FD 36573, should be filed with the
Surface Transportation Board via efiling on the Board’s website. In
addition, a copy of each pleading must
be served on WNRR’s representative,
Eric M. Hocky, Clark Hill PLC, Two
Commerce Square, 2001 Market Street,
Suite 2620, Philadelphia, PA 19103.
E:\FR\FM\07JAN1.SGM
07JAN1
]]>Agencies
[Federal Register Volume 87, Number 5 (Friday, January 7, 2022)]
[Notices]
[Pages 998-1000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00065]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 34461; 812-15192, 812-15192-01]
Apollo Credit Management, LLC and Apollo Debt Solutions BDC
January 3, 2022.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
-----------------------------------------------------------------------
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), 18(i) and Section 61(a) of the Act.
Summary of Application: Applicants request an order to permit certain
closed-end management investment companies that have elected to be
regulated as business development companies (``BDCs'') to issue
multiple classes of shares with varying sales loads and asset-based
service and/or distribution fees.
Applicants: Apollo Credit Management, LLC (the ``Current Investment
Adviser'') and Apollo Debt Solutions BDC (``ADSB'').
Filing Dates: The application was filed on January 7, 2021, and amended
on July 23, 2021, November 5, 2021, and December 22, 2021.
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 applicants with a
copy of the request by email. Hearing requests should be received by
the Commission by 5:30 p.m. on January 28, 2022, 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 1940 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]. Applicants:
Joseph D. Glatt, Apollo Credit Management, LLC, [email protected].
FOR FURTHER INFORMATION CONTACT: Stephan N. Packs, Senior Counsel, at
(202) 551-6853, or Terri G. Jordan, 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.
[[Page 999]]
Applicants' Representations
1. ADSB is a newly organized Delaware statutory trust that is an
externally-managed, non-diversified closed-end management investment
company that has elected to be regulated as a BDC under the Act.\1\
ADSB's investment objectives are to generate current income and, to a
lesser extent, long-term capital appreciation by seeking to invest
primarily in certain directly originated assets, including debt
securities, made to or issued by large private U.S. borrowers.
---------------------------------------------------------------------------
\1\ Section 2(a)(48) of the Act defines a BDC to be any closed-
end investment company that operates for the purpose of making
investments in securities described in Sections 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------
2. The Current Investment Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940 and serves as
investment adviser to ADSB.
3. Applicants seek an order to permit ASBD and other Funds (defined
below) to offer investors multiple classes of shares, interests or
units of beneficial interest, as the case may be (``Shares'') with
varying sales loads and asset-based service and/or distribution fees.
4. Applicants request that the order also apply to any continuously
offered registered closed-end management investment company that elects
to be regulated as a BDC that has been previously organized or that may
be organized in the future for which the Current Investment Adviser or
any entity controlling, controlled by, or under common control with the
Current Investment Adviser, or any successor in interest to any such
entity,\2\ acts as investment adviser and which operates as an interval
fund pursuant to Rule 23c-3 under the Act and/or periodically offers to
repurchase its Shares pursuant to Rule 13e-4 under the Securities
Exchange Act of 1934 (``Exchange Act'') and Section 23(c)(2) of the Act
(each, a ``Future Fund'' and together with ADSB, the ``Funds'').\3\
---------------------------------------------------------------------------
\2\ For purposes of the requested order, ``successor'' is
limited to any entity that results from a reorganization into
another jurisdiction or a change in the type of a business
organization.
\3\ Any Fund relying on this relief in the future will do so in
compliance with the terms and conditions of the application.
---------------------------------------------------------------------------
5. As a BDC, each Fund will be organized as a closed-end investment
company, but will offer its Shares continuously, similar to an open-end
management investment company. Shares of the Funds will not be offered
or traded in a secondary market and will not be listed on any
securities exchange and do not trade on an over-the-counter system.\4\
---------------------------------------------------------------------------
\4\ Applicants are not requesting relief with respect to any
Fund listed on a securities exchange. Any Fund which relies on the
relief requested herein will cease relying on such relief upon the
listing of any class of its Shares on a securities exchange.
---------------------------------------------------------------------------
6. Each Fund is seeking the ability to offer multiple classes of
Shares that may charge differing front-end sales loads, contingent
deferred sales charges (``CDSCs''), an early withdrawal charge
(``Repurchase Fee''), and/or annual asset-based service and/or
distribution fees. Each class of Shares will comply with the provisions
of Rule 2310 of the Financial Industry Regulatory Authority, Inc.
(``FINRA'') Manual (``FINRA Rule 2310'').\5\
---------------------------------------------------------------------------
\5\ Any reference to FINRA Rule 2310 includes any successor or
replacement rule that may be adopted by FINRA.
---------------------------------------------------------------------------
7. Any Share of a Fund that is subject to asset-based service or
distribution fees shall convert to a class with no asset-based service
or distribution fees upon such Share reaching the applicable sales
charge cap determined in accordance with FINRA Rule 2310. Further, if a
class of Shares were to be listed on an exchange in the future, all
other then-existing classes of Shares of the listing Fund will be
converted into the listed class, without the imposition of any sales
load, fee or other charge.
8. In order to provide a limited degree of liquidity to
shareholders, Applicants state that each Fund may from time to time
offer to repurchase Shares in accordance with Rule 13e-4 under the
Exchange Act and Section 23(c)(2) of the Act. Applicants state further
that repurchases of each Fund's Shares will be made at such times, in
such amounts and on such terms as may be determined by the applicable
Fund's board of trustees or directors in its sole discretion.
9. Each Fund will disclose in its prospectus the fees, expenses and
other characteristics of each class of Shares offered for sale by the
prospectus, as is required for open-end, multiple-class funds under
Form N-1A. As if it were an open-end management investment company,
each Fund will disclose fund expenses in shareholder reports,\6\ and
disclose in its prospectus any arrangements that result in breakpoints
in, or elimination of, sales loads.\7\ Each Fund will also comply with
any requirements 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
management investment company shares, and regarding prospectus
disclosure of sales loads and revenue sharing arrangements as if those
requirements applied to the Fund.\8\ Each Fund will contractually
require that any distributor of a Fund's Shares comply with such
requirements in connection with the distribution of such Fund's shares.
---------------------------------------------------------------------------
\6\ See Shareholder Reports and Quarterly Portfolio Disclosure
of Registered Management Investment Companies, Investment Co. Act
Rel. No. 26372 (Feb. 27, 2004) (adopting release).
\7\ See Disclosure of Breakpoint Discounts by Mutual Funds,
Investment Co. Act Rel. No. 26464 (June 7, 2004) (adopting release).
\8\ See Confirmation Requirements and Point of Sale Disclosure
Requirements for Transactions in Certain Mutual Funds and Other
Securities, and Other Confirmation Requirement Amendments, and
Amendments to the Registration Form for Mutual Funds, Investment Co.
Act Rel. No. 26341 (Jan. 29, 2004) (proposing release).
---------------------------------------------------------------------------
10. Distribution fees will be paid pursuant to a plan of
distribution adopted by each Fund in compliance with Rules 12b-1 and
17d-3 under the Act, as if those rules applied to closed-end funds
electing to be regulated as BDCs, with respect to a class (a
``Distribution Plan'').
11. Each Fund will allocate all expenses incurred by it among the
various classes of Shares based on the respective net assets of the
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 Plan of that class (if any), shareholder servicing
fees attributable to a particular class (including transfer agency
fees, if any) and any other incremental expenses of that class.
Expenses of the Fund allocated to a particular class of the Fund's
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
management investment company.
12. Any Fund that imposes a CDSC will comply with the provisions of
Rule 6c-10 (except to the extent a Fund will comply with FINRA Rule
2310 rather than FINRA Rule 2341, as such rule may be amended (``FINRA
Rule 2341'')), as if that rule applied to BDCs. With respect to any
waiver of, scheduled variation in, or elimination of the CDSC, a Fund
will comply with the requirements of Rule 22d-1 under the Act as if the
Fund were an open-end management investment company. Each Fund also
will disclose CDSCs in accordance with the requirements of Form N-1A
concerning CDSCs as if the Fund were an open-end management investment
company.
13. Funds may impose a Repurchase Fee at a rate no greater than 2%
of the shareholder's repurchase proceeds if the
[[Page 1000]]
interval between the date of purchase of the Shares and the valuation
date with respect to the repurchase of such Shares is less than a
specified period. Any Repurchase Fee will apply equally to all
shareholders of the applicable Fund, regardless of class, consistent
with Section 18 of the Act and Rule 18f-3 under the Act. To the extent
a Fund determines to waive, impose scheduled variations of, or
eliminate any Repurchase Fees, it will do so consistently with the
requirements of Rule 22d-1 under the Act as if the Repurchase Fee were
a CDSC and as if the Fund were an open-end investment company and the
Fund's waiver of, scheduled variation in, or elimination of, the
Repurchase Fee will apply uniformly to all shareholders of the Fund.
Applicants' Legal Analysis
Multiple Classes of Shares
1. Section 18(a)(2) of the Act provides that a closed-end
investment company may not issue or sell a senior security that is a
stock unless certain requirements are met. Applicants state that the
creation of multiple classes of shares of the Funds may violate Section
18(a)(2), which is made applicable to BDCs through Section 61(a) of the
Act, 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 state that the creation of
multiple classes of Shares of the Funds may be prohibited by Section
18(c), which is made applicable to BDCs through Section 61(a) of the
Act, 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 state that multiple classes of shares of the Funds
may violate Section 18(i) of the Act, which is made applicable to BDCs
through Section 61(a) 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) (which are made
applicable to BDCs by Section 61(a) of the Act) to permit the Funds to
issue multiple classes of Shares.
5. Applicants submit that the proposed allocation of expenses
relating to distribution and voting rights among multiple classes is
equitable and will not discriminate against any group or class of
shareholders. Applicants submit that the proposed arrangements would
permit a Fund to facilitate the distribution of its Shares and provide
investors with a broader choice of fee options. Applicants assert that
the proposed BDC multiple class structure does not raise the concerns
underlying Section 18 of the Act to any greater degree than open-end
management investment companies' multiple class structures that are
permitted by Rule 18f-3 under the Act.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition:
1. Each Fund will comply with the provisions of Rules 6c-10 (except
to the extent a Fund will comply with FINRA Rule 2310 rather than FINRA
Rule 2341), 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3
under the 1940 Act, as amended from time to time, or any successor
rules thereto, as if those rules applied to BDCs. In addition, each
Fund will comply with FINRA Rule 2310, as amended from time to time, or
any successor rule thereto, and will make available to any distributor
of a Fund's shares all of the information necessary to permit the
distributor to prepare client account statements in compliance with
FINRA Rule 2231.
For the Commission, by the Division of Investment Management,
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00065 Filed 1-6-22; 8:45 am]
BILLING CODE 8011-01-P
