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lotter on DSK11XQN23PROD with NOTICES1

Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices or other joint arrangement or profitsharing plan in which such Fund or a company controlled by such Fund is a participant. The exemption would permit, among other things, coinvestments by each Fund, Point72
Third Party Fund and individual members or employees, officers, directors or consultants of Point72
making their own individual investment decisions apart from Point72.
Applicants acknowledge that the requested relief will not extend to any transaction in which an Unaffiliated Subadviser or an Advisory Person or an affiliated person of either has an interest.
6. Applicants assert that compliance with section 17d would prevent each Fund from achieving a principal purpose, which is to provide a vehicle for Eligible Employees and other permitted investors to co-invest with Point72 or, to the extent permitted by the terms of the Fund, with other employees, officers, directors or consultants of Point72 or Point72
Entities or with a Point72 Third Party Fund. Applicants further contend that compliance with section 17d would cause a Fund to forego investment opportunities simply because an investor in such Fund or other affiliated person of such Fund also had, or contemplated making, a similar investment. Applicants submit that it is likely that suitable investments will be brought to the attention of a Fund because of its affiliation with Point72s large capital resources and investment management experience, and that attractive investment opportunities of the types considered by a Fund often require each participant in the transaction to make funds available in an amount that may be substantially greater than those the Fund would independently be able to provide.
Applicants contend that, as a result, a Funds access to such opportunities may have to be through co-investment with other persons, including its affiliates.
Applicants assert that the flexibility to structure co-investments and joint investments will not involve abuses of the type section 17d and rule 17d1
were designed to prevent. In addition, Applicants represent that any transactions otherwise subject to section 17d of the Act and rule 17d1
thereunder, for which exemptive relief has not been requested, would require approval by the Commission.
7. Co-investments with a Point72
Entity or with a Point72 Third Party Fund in a transaction in which Point72s investment was made pursuant to a contractual obligation to a Point72 Third Party Fund will not be
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subject to Condition 3 below.
Applicants believe that the interests of the Eligible Employees participating in a Fund will be adequately protected in such situations because Point72 is likely to invest a portion of its own capital in Point72 Third Party Fund investments, either through such Point72 Third Party Fund or on a side-by-side basis which Point72 investments will be subject to substantially the same terms as those applicable to such Point72 Third Party Fund, except as otherwise disclosed in the governing documents of the relevant Fund. Applicants assert that if Condition 3 were to apply to Point72s investment in these situations, Point72
Third Party Fund would be indirectly burdened by the requirements of Condition 3. Applicants further assert that the relationship of a Fund to a Point72 Third Party Fund is fundamentally different from such Funds relationship to Point72.
Applicants contend that the focus of, and the rationale for, the protections contained in the requested relief are to protect the Funds from any overreaching by Point72 in the employer/employee context, whereas the same concerns are not present with respect to the Funds vis-a-vis the investors in a Point72 Third Party Fund.
8. Section 17e of the Act and rule 17e1 thereunder limit the compensation an affiliated person may receive when acting as agent or broker for a registered investment company.
Applicants request an exemption from section 17e to permit a Point72 Entity including the General Partner that acts as an agent or broker to receive placement fees, advisory fees, or other compensation from a Fund in connection with the purchase or sale by the Fund of securities, provided that the fees or other compensation are deemed usual and customary. Applicants state that for purposes of the application, fees or other compensation that are charged or received by a Point72 Entity will be deemed to be usual and customary only if i the Fund is purchasing or selling securities alongside other unaffiliated third parties, Point72 Third Party Funds or Third Party Investors who are also similarly purchasing or selling securities, ii the fees or other compensation being charged to the Fund are also being charged to the unaffiliated third parties, Point72 Third Party Funds or Third Party Investors, and iii the amount of securities being purchased or sold by the Fund does not exceed 50% of the total amount of securities being purchased or sold by the Fund and the unaffiliated third parties, Point72 Third Party Funds or
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Third Party Investors. Applicants state that compliance with section 17e would prevent a Fund from participating in a transaction in which Point72, for other business reasons, does not wish to appear as if the Fund is being treated in a more favorable manner by being charged lower fees than other third parties also participating in the transaction.
Applicants assert that the concerns of overreaching and abuse that section 17e and rule 17e1 were designed to prevent are alleviated by the conditions that ensure that i the fees or other compensation paid by a Fund to a Point72 Entity are those negotiated at arms length with unaffiliated third parties and ii the unaffiliated third parties have as great or greater interest as the Fund in the transactions as a whole.
9. Rule 17e1b under the Act requires that a majority of directors who are not interested persons as defined in section 2a19 of the Act take actions and make approvals regarding commissions, fees, or other remuneration. Rule 17e1c under the Act requires each Fund to comply with the fund governance standards defined in rule 01a7 under the Act.
Applicants request an exemption from rule 17e1b to the extent necessary to permit each Fund to comply with rule 17e1b without the necessity of having a majority of the directors of the Fund who are not interested persons take such actions and make such approvals as are set forth in rule 17e1b.
Applicants note that in the event that all the directors of the General Partner or other governing body of the General Partner will be affiliated persons, a Fund could not comply with rule 17e 1b without the relief requested.
Applicants represent that in such an event, the Fund will comply with rule 17e1b by having a majority of the directors or members of a comparable body of the Fund or its General Partner take such actions and make such approvals as are set forth in rule 17e 1b. Applicants state that each Fund will otherwise comply with all other requirements of rule 17e1b.
Applicants further request an exemption from rule 17e1c to the extent necessary to permit each Fund to comply with rule 17e1 without the necessity of having a majority of the directors of the Fund be disinterested persons as set forth in rule 17e1c.
Applicants note that in the event that all the directors of the General Partner will be affiliated persons, a Fund could not comply with rule 17e1 without the relief requested. Applicants represent
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