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Federal Register / Vol. 86, No. 119 / Thursday, June 24, 2021 / Notices
securities are Tradable Securities 22 and the Disposition meets the other requirements of Condition 6cii. Pro Rata Dispositions and Dispositions of a Tradable Security remain subject to the Boards periodic review in accordance with Condition 10.
D. Delayed Settlement 18. Applicants represent that under the terms and Conditions of the application, all Regulated Funds and Affiliated Funds participating in a CoInvestment Transaction will invest at the same time, for the same price and with the same terms, conditions, class, registration rights and any other rights, so that none of them receives terms more favorable than any other.
However, the settlement date for an Affiliated Fund in a Co-Investment Transaction may occur up to ten business days after the settlement date for the Regulated Fund, and vice versa.
Nevertheless, in all cases, i the date on which the commitment of the Affiliated Funds and Regulated Funds is made will be the same even where the settlement date is not and ii the earliest settlement date and the latest settlement date of any Affiliated Fund or Regulated Fund participating in the transaction will occur within ten business days of each other.
E. Holders
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19. Under Condition 15, if an Adviser, its principals, or any person controlling, controlled by, or under common control with the Adviser or its principals, and the Affiliated Funds collectively, the Holders own in the aggregate more than 25 percent of the outstanding voting shares of a Regulated Fund the Shares, then the Holders will vote such Shares in the same percentage as the Regulated Funds other shareholders not including the Holders when voting on matters specified in the Condition.
rescind, suspend or qualify, its approval of Pro Rata Dispositions, in which case all subsequent Dispositions will be submitted to the Regulated Funds Eligible Directors.
22 Tradable Security means a security that meets the following criteria at the time of Disposition: i It trades on a national securities exchange or designated offshore securities market as defined in rule 902b under the Securities Act;
ii it is not subject to restrictive agreements with the issuer or other security holders; and iii it trades with sufficient volume and liquidity findings as to which are documented by the Advisers to any Regulated Funds holding investments in the issuer and retained for the life of the Regulated Fund to allow each Regulated Fund to dispose of its entire position remaining after the proposed Disposition within a short period of time not exceeding 30 days at approximately the value as defined by section 2a41 of the Act at which the Regulated Fund has valued the investment.

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Applicants Legal Analysis 1. Section 17d of the Act and rule 17d1 under the Act prohibit participation by a registered investment company and an affiliated person in any joint enterprise or other joint arrangement or profit-sharing plan, as defined in the rule, without prior approval by the Commission by order upon application. Section 17d of the Act and rule 17d1 under the Act are applicable to Regulated Funds that are registered closed-end investment companies.
2. Similarly, with regard to BDCs, section 57a4 of the Act generally prohibits certain persons specified in section 57b from participating in joint transactions with the BDC or a company controlled by the BDC in contravention of rules as prescribed by the Commission. Section 57i of the Act provides that, until the Commission prescribes rules under section 57a4, the Commissions rules under section 17d of the Act applicable to registered closed-end investment companies will be deemed to apply to transactions subject to section 57a4. Because the Commission has not adopted any rules under section 57a4, rule 17d1 also applies to joint transactions with Regulated Funds that are BDCs.
3. Co-Investment Transactions are prohibited by either or both of rule 17d 1 and section 57a4 without a prior exemptive order of the Commission to the extent that the Affiliated Funds and the Regulated Funds participating in such transactions fall within the category of persons described by rule 17d1 and/or section 57b, as applicable, vis-a-vis each participating Regulated Fund. Each of the participating Regulated Funds and Affiliated Funds may be deemed to be affiliated persons vis-a-vis a Regulated Fund within the meaning of section 2a3 by reason of common control because i an Existing Adviser is the investment adviser and sub-adviser, if any to, and may be deemed to control, each of the Existing Affiliated Funds, and an Adviser to Affiliated Funds will be the investment adviser and subadviser, if any to, and may be deemed to control, any other Affiliated Fund; ii an Existing Adviser is the investment adviser and sub-adviser, if any to, and may be deemed to control, the Existing Regulated Funds and an Adviser will be the investment adviser and sub-adviser, if any to, and may be deemed to control, any Future Regulated Fund, iii each BDC Downstream Fund will be deemed to be controlled by its BDC
parent and/or its BDC parents investment adviser; and iv the
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Advisers to Affiliated Funds and the Advisers to Regulated Funds are under common control. Thus, each of the Affiliated Funds could be deemed to be a person related to the Regulated Funds, including any BDC Downstream Fund, in a manner described by section 57b and related to the other Regulated Funds in a manner described by rule 17d1; and therefore the prohibitions of rule 17d1 and section 57a4 would apply respectively to prohibit the Affiliated Funds from participating in Co-Investment Transactions with the Regulated Funds. In addition, because the Proprietary Accounts are controlled by an Adviser and, therefore, may be under common control with the Existing Advisers, and any Future Regulated Funds, the Proprietary Accounts could be deemed to be persons related to the Regulated Funds or a company controlled by the Regulated Funds in a manner described by section 57b and also prohibited from participating in the Co-Investment Program.
4. In passing upon applications under rule 17d1, the Commission considers whether the companys participation in the joint transaction is consistent with the provisions, policies, and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.
5. Applicants state that in the absence of the requested relief, in many circumstances the Regulated Funds would be limited in their ability to participate in attractive and appropriate investment opportunities. Applicants state that, as required by rule 17d1b, the Conditions ensure that the terms on which Co-Investment Transactions may be made will be consistent with the participation of the Regulated Funds being on a basis that it is neither different from nor less advantageous than other participants, thus protecting the equity holders of any participant from being disadvantaged. Applicants further state that the Conditions ensure that all Co-Investment Transactions are reasonable and fair to the Regulated Funds and their shareholders and do not involve overreaching by any person concerned, including the Advisers.
Applicants state that the Regulated Funds participation in the CoInvestment Transactions in accordance with the Conditions will be consistent with the provisions, policies, and purposes of the Act and would be done in a manner that is not different from, or less advantageous than, that of other participants.

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