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Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices
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fund making investments on a side-byside basis with Underlying Funds.
14. A Fund may co-invest in a portfolio company or a pooled investment vehicle with a Point72
Entity or with an investment fund or separate account organized primarily for the benefit of investors who are not affiliated with Point72 Third Party Investors and over which a Point72
Entity exercises investment discretion or which is sponsored by a Point72
Entity a Point72 Third Party Fund.
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 subject to Condition 3 below. All other side-byside investments held by Point72
entities will be subject to Condition 3.
15. If Point72 makes loans to a Fund, the lender will be entitled to receive interest, provided that the interest rate will be no less favorable to the borrower than the rate obtainable on an arms length basis. The possibility of any such borrowings, as well as the terms thereof, would be disclosed to Qualified Participants prior to their investment in a Fund. Any indebtedness of the Fund will be the debt of the Fund and without recourse to the investors. A Fund will not borrow from any person if the borrowing would cause any person not named in section 2a13 of the Act to own securities of the Fund other than short-term paper. A Fund will not lend any funds to a Point72 Entity.
16. A Fund will not acquire any security issued by a registered investment company if immediately after such acquisition such Fund will own more than 3% of the outstanding voting stock of the registered investment company.
Applicants Legal Analysis 1. Section 6b of the Act provides that the Commission shall exempt employees securities companies from the provisions of the Act if and to the extent that such exemption is consistent with the protection of investors. Section 6b provides that the Commission will consider, in determining the provisions of the Act from which the company should be exempt, the companys form of organization and capital structure, the persons owning and controlling its securities, the price of the companys securities and the amount of any sales load, how the companys funds are invested, and the relationship between the company and the issuers of the securities in which it invests. Section 2a13 defines an employees securities company, in relevant part, as any
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investment company all of whose securities other than short-term paper are beneficially owned a by current or former employees, or persons on retainer, of one or more affiliated employers, b by immediate family members of such persons, or c by such employer or employers together with any of the persons in a or b.
2. Section 7 of the Act generally prohibits investment companies that are not registered under section 8 of the Act from selling or redeeming their securities. Section 6e of the Act provides that in connection with any order exempting an investment company from any provision of section 7, certain specified provisions of the Act shall be applicable to such company, and to other persons in their transactions and relations with such company, as though such company were registered under the Act, if the Commission deems it necessary and appropriate in the public interest or for the protection of investors. Applicants submit that it would be appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the Act for the Commission to issue an order under sections 6b and 6e of the Act exempting the Funds from all provisions of the Act and the rules and regulations thereunder, except sections 9, 17, 30, and 36 through 53 of the Act, and the Rules and Regulations. With respect to sections 17a, d, e, f, g and j and 30a, b, e, and h of the Act, and the Rules and Regulations, and rule 38a1 under the Act, Applicants request a limited exemption as set forth in the application.
3. Section 17a of the Act generally prohibits any affiliated person of a registered investment company, or any affiliated person of such a person, acting as principal, from knowingly selling or purchasing any security or other property to or from the investment company. Applicants request an exemption from section 17a to the extent necessary to a permit a Point72
Entity or a Point72 Third Party Fund or any affiliated person of such Point72
Entity or Point72 Third Party Fund, or any affiliated person of a Fund or affiliated persons of such persons, acting as principal, to engage in any transaction directly or indirectly with any Fund or any company controlled by such Fund; and b to permit a Fund to invest or engage in any transaction with any Point72 Entity, acting as principal, i in which such Fund, any company controlled by such Fund or any Point72
Entity or any Point72 Third Party Fund has invested or will invest, or ii with
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which such Fund, any company controlled by such Fund or any Point72
Entity or Point72 Third Party Fund is or will become otherwise affiliated; and c permit a Third Party Investor, acting as a principal, to engage in any transaction directly or indirectly with a Fund or any company controlled by such Fund. The transactions to which any Fund is a party will be effected only after a determination by the General Partner that the requirements of Conditions 1, 2
and 6 set forth below have been satisfied. Applicants, on behalf of the Funds, represent that any transactions otherwise subject to section 17a of the Act, for which exemptive relief has not been requested, would require approval of the Commission.
4. Applicants submit that an exemption from section 17a is consistent with the policy of each Fund and the protection of investors.
Applicants state that the investors in each Fund will have been fully informed of the possible extent of such Funds dealings with Point72 and of the potential conflicts of interest that may exist. Applicants also state that, as professionals employed in the investment management business, or in administrative, financial, accounting, legal, sales, marketing, risk management or operational activities related thereto, the investors will be able to understand and evaluate the attendant risks.
Applicants assert that the community of interest among the investors in each Fund, on the one hand, and Point72, on the other hand, is the best insurance against any risk of abuse. Applicants acknowledge that the requested relief will not extend to any transactions between a Fund and an Unaffiliated Subadviser or an affiliated person of the Unaffiliated Subadviser, or between a Fund and any person who is not an employee, officer or director of Point72
or is an entity outside of Point72 and is an affiliated person of the Fund as defined in section 2a3E of the Act Advisory Person or any affiliated person of such person.
5. Section 17d of the Act and rule 17d1 thereunder prohibit any affiliated person or principal underwriter of a registered investment company, or any affiliated person of such a person or principal underwriter, acting as principal, from participating in any joint arrangement with the company unless authorized by the Commission.
Applicants request an exemption from section 17d and rule 17d1 to the extent necessary to permit affiliated persons of each Fund, or affiliated persons of any of such persons, to participate in, or effect any transaction in connection with, any joint enterprise
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