SECURITIES AND EXCHANGE COMMISSION

Investment Company Act Release No. 34026; File No. 812-15145

Arca U.S. Treasury Fund and Arca Capital Management, LLC

September 24, 2020

AGENCY: Securities and Exchange Commission (“Commission”).

ACTION: Notice. 

Notice of application for an order under sections 6(c) and 23(c)(3) of the Investment Company 

Act of 1940 (the “Act”) for an exemption from rule 23c-3 under the Act.

Summary of Application: Applicants request an order under sections 6(c) and 23(c)(3) of the 

Act for an exemption from certain provisions of rule 23c-3 to permit certain registered closedend investment companies to make repurchase offers on a monthly basis.

Applicants: Arca U.S. Treasury Fund (the “Fund”) and Arca Capital Management, LLC (the

“Adviser”).

Filing Dates: The application was filed on July 22, 2020 and amended on September 10, 2020. 

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 Secretarys-Office@sec.gov and serving applicants with a copy of the 

request, personally or by mail. Hearing requests should be received by the Commission by 5:30 

p.m. on October 19, 2020, 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. 
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Persons who wish to be notified of a hearing may request notification by emailing the 

Commission’s Secretary at Secretarys-Office@sec.gov. 

ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: c/o Kelley A. 

Howes, by email to KHowes@mofo.com.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at (202) 

551-6915, or Kaitlin C. Bottock, 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

http://www.sec.gov/search/search.htm or by calling (202) 551-8090. 

Applicants’ Representations:

1. The Fund is a Delaware statutory trust that is registered under the Act as a diversified, 

closed-end management investment company that operates as an interval fund. The Adviser is a 

Delaware limited liability company and is registered as an investment adviser under the 

Investment Advisers Act of 1940. The Adviser serves as investment adviser to the Fund.

2. Applicants request that any relief granted also apply to any registered closed-end 

management investment company that operates as an interval fund pursuant to rule 23c-3 for 

which the Adviser or any entity controlling, controlled by, or under common control with the 
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Adviser, or any successor in interest to any such entity,1acts as investment adviser (the “Future 

Funds,” and together with the Fund, the “Funds,” and each, individually, a “Fund”).2

3. The Fund’s common shares are not offered or traded in the secondary market and are 

not listed on any exchange or quoted on any quotation medium. The Fund issues its shares as 

digital securities (“ArCoins”), meaning the securities are uncertificated securities, the ownership 

and transfer of which are authenticated and recorded as ERC-1404 compatible tokens on 

Ethereum, an electronic distributed ledger that is secured using cryptography (referred to as a 

“blockchain”).

4. Applicants request an order to permit each Fund to offer to repurchase a portion of its 

common shares at one-month intervals, rather than the three, six, or twelve-month intervals 

specified by rule 23c-3.

5. Each Fund will disclose in its prospectus and annual reports its fundamental policy to 

make monthly offers to repurchase a portion of its common shares at net asset value, less 

deduction of a repurchase fee, if any, as permitted by rule 23c-3(b)(1). The fundamental policy 

will be changeable only by a majority vote of the holders of such Fund’s outstanding voting 

securities. Under the fundamental policy, the repurchase offer amount will be determined by the 

board of trustees of the applicable Fund (“Board”) prior to each repurchase offer. Each Fund

will comply with rule 23c-3(b)(8)’s requirements with respect to its trustees who are not 

interested persons of such Fund, within the meaning of section 2(a)(19) of the Act 

(“Disinterested Trustees”) and their legal counsel. Each Fund will make monthly offers to 

 

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 All entities currently intending to rely on the requested relief have been named as applicants. Any entity that 

relies on the requested order in the future will do so only in accordance with the terms and conditions of the 

application.
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repurchase not less than 5% of its outstanding shares at the time of the repurchase request 

deadline. The repurchase offer amounts for the then-current monthly period, plus the repurchase 

offer amounts for the two monthly periods immediately preceding the then-current monthly 

period, will not exceed 25% of the outstanding common shares of the applicable Fund.

6. Each Fund’s fundamental policies will specify the means to determine the repurchase 

request deadline and the maximum number of days between each repurchase request deadline 

and the repurchase pricing date. Each Fund’s repurchase pricing date normally will be the same 

date as the repurchase request deadline and pricing will be determined after close of business on 

that date.

7. Pursuant to rule 23c-3(b)(1), each Fund will repurchase shares for cash on or before 

the repurchase payment deadline, which will be no later than seven calendar days after the 

repurchase pricing date. Each Fund intends to make payment by the fifth business day or 

seventh calendar day (whichever period is shorter) following the repurchase pricing date. Each 

Fund will make payment for shares repurchased in the previous month’s repurchase offer at least 

five business days before sending notification of the next repurchase offer. Each Fund may

deduct a repurchase fee in an amount not to exceed 2% from the repurchase proceeds payable to 

tendering shareholders, in compliance with rule 23c-3(b)(1).

8. Each Fund will provide common shareholders with notification of each repurchase 

offer no less than seven days and no more than fourteen days prior to the repurchase request 

deadline. The notification will include all information required by rule 23c-3(b)(4)(i). Each 

Fund will file the notification and the Form N-23c-3 with the Commission within three business 

days after sending the notification to its respective common shareholders.
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9. Each Fund will not suspend or postpone a repurchase offer except pursuant to the 

vote of a majority of its trustees, including a majority of its Disinterested Trustees, and only 

under the limited circumstances specified in rule 23c-3(b)(3)(i). Each Fund will not condition a 

repurchase offer upon tender of any minimum amount of shares. In addition, each Fund will 

comply with the pro ration and other allocation requirements of rule 23c-3(b)(5) if common 

shareholders tender more than the repurchase offer amount. Further, each Fund will permit 

tenders to be withdrawn or modified at any time until the repurchase request deadline, but will 

not permit tenders to be withdrawn or modified thereafter.

10. From the time a Fund sends its notification to shareholders of the repurchase offer 

until the repurchase pricing date, a percentage of such Fund’s assets equal to at least 100% of the 

repurchase offer amount will consist of: (a) assets that can be sold or disposed of in the ordinary 

course of business at approximately the price at which such Fund has valued such investment 

within a period equal to the period between the repurchase request deadline and the repurchase 

payment deadline; or (b) assets that mature by the next repurchase payment deadline. In the 

event the assets of a Fund fail to comply with this requirement, the Board will cause such Fund

to take such action as it deems appropriate to ensure compliance.

11. In compliance with the asset coverage requirements of section 18 of the Act, any 

senior security issued by, or other indebtedness of, a Fund will either mature by the next 

repurchase pricing date or provide for such Fund’s ability to call, repay or redeem such senior 

security or other indebtedness by the next repurchase pricing date, either in whole or in part, 

without penalty or premium, as necessary to permit that Fund to complete the repurchase offer in 

such amounts determined by its Board.
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12. The Board of each Fund will adopt written procedures to ensure that such Fund’s

portfolio assets are sufficiently liquid so that it can comply with its fundamental policy on 

repurchases and the liquidity requirements of rule 23c-3(b)(10)(i). The Board of each Fund will 

review the overall composition of the portfolio and make and approve such changes to the 

procedures as it deems necessary.

Applicants’ Legal Analysis:

1. 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 rule thereunder, if and to the extent that 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.

2. Section 23(c) of the Act provides in relevant part that no registered closed-end 

investment company shall purchase any securities of any class 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 such other circumstances as the Commission may permit by rules and regulations or orders 

for the protection of investors.

3. Rule 23c-3 under the Act permits a registered closed-end investment company to 

make repurchase offers for its common stock at net asset value at periodic intervals pursuant to a 

fundamental policy of the investment company. “Periodic interval” is defined in rule 23c-3(a)(1) 

as an interval of three, six, or twelve months. Rule 23c-3(b)(4) requires that notification of each 

repurchase offer be sent to shareholders no less than 21 calendar days and no more than 42 

calendar days before the repurchase request deadline.
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4. Applicants request an order pursuant to sections 6(c) and 23(c) of the Act exempting 

them from rule 23c-3(a)(1) to the extent necessary to permit the Funds to make monthly 

repurchase offers. Applicants also request an exemption from the notice provisions of rule 23c3(b)(4) to the extent necessary to permit each Fund to send notification of an upcoming 

repurchase offer to shareholders at least seven days but no more than fourteen calendar days in 

advance of the repurchase request deadline.

5. Applicants contend that monthly repurchase offers are in the public interest and in the 

common shareholders’ interests and consistent with the policies underlying rule 23c-3.

Applicants assert that monthly repurchase offers will provide investors with more liquidity than 

quarterly repurchase offers. Applicants assert that shareholders will be better able to manage 

their investments and plan transactions, because if they decide to forego a repurchase offer, they 

will only need to wait one month for the next offer. Applicants also contend that the portfolio of 

each Fund will be managed to provide ample liquidity for monthly repurchase offers.

6. Applicants propose to send notification to shareholders at least seven days, but no 

more than fourteen calendar days, in advance of a repurchase request deadline. Applicants assert 

that, because each Fund intends to make payment on the fifth business day or seventh calendar 

day (whichever period is shorter) following the repurchase pricing date, the entire procedure will

be completed before the next notification is sent out to shareholders, thus avoiding any overlap. 

Applicants believe that these procedures will eliminate any possibility of investor confusion.
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Applicants also state that monthly repurchase offers will be a fundamental feature of the Funds, 

and their prospectuses will provide a clear explanation of the repurchase program.

7. Applicants submit that for the reasons given above the requested relief is appropriate 

in the public interest and is consistent with the protection of investors and the purposes fairly 

intended by the policy and provisions of the Act.

Applicants’ Conditions:

Applicants agree that any order granting the requested relief shall be subject to the 

following conditions:

1. The Fund (and any Future Fund relying on this relief) will make a repurchase offer 

pursuant to rule 23c-3(b) for a repurchase offer amount of not less than 5% in any one-month 

period. In addition, the repurchase offer amount for the then-current monthly period, plus the 

repurchase offer amounts for the two monthly periods immediately preceding the then-current 

monthly period, will not exceed 25% of the Fund’s (or Future Fund’s, as applicable) outstanding 

common shares. The Fund (and any Future Fund relying on this relief) may repurchase 

additional tendered common shares pursuant to rule 23c-3(b)(5) only to the extent the percentage 

of additional common shares so repurchased does not exceed 2% in any three-month period.

2. Payment for repurchased common shares will occur at least five business days before 

notification of the next repurchase offer is sent to common shareholders of the Fund (or any 

Future Fund relying on this relief).

For the Commission, by the Division of Investment Management, under delegated 

authority.

J. Matthew DeLesDernier

Assistant Secretary