Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81987 

35 17 CFR 200.30–3(a)(12). 

be submitted on or before January 7, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27726 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: Notice is hereby given, 

pursuant to the provisions of the 

Government in the Sunshine Act, Public 

Law 94–409, the Securities and 

Exchange Commission will hold an 

Open Meeting on Monday, December 

21, 2020 at 10:00 a.m. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 

STATUS: This meeting will begin at 

10:00 a.m. (ET) and will be open to the 

public via audio webcast only on the 

Commission’s website at www.sec.gov. 

MATTERS TO BE CONSIDERED: 

1. The Commission will consider 

whether to authorize the execution of a 

Memorandum of Understanding and 

related documents with the 

Bundesanstalt fu ̈r 

Finanzdienstleistungsaufsicht (‘‘BaFin’’) 

concerning consultation, cooperation 

and the exchange of information related 

to the supervision and oversight of 

certain cross-border over-the-counter 

derivatives entities in connection with 

the use of substituted compliance by 

such entities. 

2. The Commission will consider 

whether to issue an Order, pursuant to 

Exchange Act Rule 3a71–6, granting 

conditional substituted compliance in 

connection with certain Exchange Act 

requirements related to risk control (but 

not including nonbank capital and 

margin requirements), internal 

supervision and compliance, 

counterparty protection, and books and 

records, in response to an application by 

BaFin. 

3. The Commission will consider 

whether to issue a Notice, pursuant to 

Exchange Act Rule 0–13, seeking public 

comment on an application made by a 

foreign financial regulatory authority, 

pursuant to Exchange Act Rule 3a71–6, 

for a substituted compliance 

determination, and on a proposed order 

providing for the conditional 

availability of substituted compliance in 

connection with the application. 

4. The Commission will consider 

whether to approve a proposed rule 

change by New York Stock Exchange 

LLC to amend Chapter One of the Listed 

Company Manual to modify the 

provisions relating to direct listings. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed, please contact 

Vanessa A. Countryman, Office of the 

Secretary, at (202) 551–5400. 

Dated: December 14, 2020. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–27866 Filed 12–15–20; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34138; 812–14951] 

KKR Income Opportunities Fund, et al. 

December 11, 2020. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

under sections 17(d) and 57(i) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) and rule 17d–1 under the Act to 

permit certain joint transactions 

otherwise prohibited by sections 17(d) 

and 57(a)(4) of the Act and rule 17d–1 

under the Act. 

Summary of Application: Applicants 

request an order to permit certain 

business development companies and 

closed-end management investment 

companies to co-invest in portfolio 

companies with each other and with 

certain affiliated investment funds and 

accounts. 

Applicants: KKR INCOME 

OPPORTUNITIES FUND (‘‘KIO’’), KKR 

CREDIT OPPORTUNITIES PORTFOLIO 

(‘‘KCOP’’), KKR CREDIT ADVISORS 

(US) LLC (‘‘KKR Credit’’), KKR CREDIT 

ADVISORS (HONG KONG) LIMITED, 

KKR STRATEGIC CAPITAL 

MANAGEMENT LLC, KKR FI 

ADVISORS LLC, KKR FINANCIAL 

ADVISORS LLC, KKR FINANCIAL 

ADVISORS II, LLC, KKR CS ADVISORS 

I LLC, KKR MEZZANINE I ADVISORS 

LLC, KKR FI ADVISORS CAYMAN 

LTD., KAM ADVISORS LLC, KAM 

FUND ADVISORS LLC, KKR CREDIT 

FUND ADVISORS LLC, KKR ASSET 

MANAGEMENT, LTD., KKR CREDIT 

ADVISORS (IRELAND) UNLIMITED 

COMPANY, KKR CREDIT ADVISORS 

(EMEA) LLP, KKR CREDIT ADVISORS 

(SINGAPORE) PTE. LTD., KKR 

CAPITAL MARKETS HOLDINGS L.P., 

KKR CAPITAL MARKETS LLC, KKR 

CAPITAL MARKETS LIMITED, KKR 

CAPITAL MARKETS ASIA LIMITED, 

MCS CAPITAL MARKETS LLC, KKR 

CAPITAL MARKETS PARTNERS LLP, 

KKR CAPITAL MARKETS INDIA 

PRIVATE LIMITED, KKR CAPITAL 

MARKETS (IRELAND) LIMITED, KKR 

CAPITAL MARKETS JAPAN LIMITED, 

KKR RTV MANAGER LLC, KKR LOAN 

ADMINISTRATION SERVICES LLC, 

KKR CORPORATE LENDING LLC, KKR 

CORPORATE LENDING (CAYMAN) 

LIMITED, KKR CORPORATE LENDING 

(UK) LLC, MERCHANT CAPITAL 

SOLUTIONS LLC, MCS CORPORATE 

LENDING LLC, KKR ALTERNATIVE 

ASSETS LLC, KKR ALTERNATIVE 

ASSETS L.P., KKR ALTERNATIVE 

ASSETS LIMITED, KKR CORPORATE 

LENDING (CA) LLC, KKR CORPORATE 

LENDING (TN) LLC, KKR FINANCIAL 

HOLDINGS, INC., KKR FINANCIAL 

HOLDINGS, LTD., KKR FINANCIAL 

HOLDINGS II, LLC, KKR FINANCIAL 

HOLDINGS II, LTD., KKR FINANCIAL 

HOLDINGS III, LLC, KKR FINANCIAL 

HOLDINGS III, LTD., KKR FINANCIAL 

CLO HOLDINGS, LLC, KKR 

FINANCIAL CLO HOLDINGS II, LLC, 

KKR TRS HOLDINGS, LTD., KKR 

STRATEGIC CAPITAL 

INSTITUTIONAL FUND, LTD., KKR 

DEBT INVESTORS II (2006) IRELAND 

L.P., KKR DI 2006 LP, KKR EUROPEAN 

SPECIAL OPPORTUNITIES LIMITED, 8 

CAPITAL PARTNERS L.P., KKR 

FINANCIAL CLO 2007–1, LTD., KKR 

FINANCIAL CLO 2012–1, LTD., KKR 

FINANCIAL CLO 2013–1, LTD., KKR 

FINANCIAL CLO 2013–2, LTD., KKR 

CLO 9 LTD., KKR CLO 10 LTD., KKR 

CLO 11 LTD., KKR CLO 12 LTD., KKR 

CLO 13 LTD., KKR CLO 14 LTD., KKR 

CLO 15 LTD., KKR CLO 16 LTD., KKR 

CLO 17 LTD., KKR CLO 18 LTD., KKR 

CLO 19 LTD., KKR CLO 20 LTD., KKR 

CLO 21 LTD., KKR CLO 22 LTD., KKR 

CLO 23 LTD., KKR CLO 24 LTD., KKR 

CLO 25 LTD., KKR CLO 26 LTD., KKR 

CLO 27 LTD., KKR CLO 28 LTD., KKR 

CLO 29 LTD., KKR CLO 30 LTD., KKR 

CLO 31 LTD., KKR CORPORATE 

CREDIT PARTNERS L.P., KKR 

MEZZANINE PARTNERS I L.P., KKR 

MEZZANINE PARTNERS I SIDE-BYSIDE L.P., KKR–KEATS CAPITAL 

PARTNERS L.P., KKR–MILTON 

CAPITAL PARTNERS L.P., KKR– 

MILTON CAPITAL PARTNERS II L.P., 

KKR LENDING PARTNERS L.P., KKR 

LENDING PARTNERS II L.P., KKR–VRS 

CREDIT PARTNERS L.P., KKR PIP 

INVESTMENTS L.P., KKR SPECIAL 

SITUATIONS (DOMESTIC) FUND L.P., 

81988 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

1 ‘‘Regulated Entities’’ means the Existing 

Regulated Entities and any Future Regulated Entity. 

‘‘Existing Regulated Entities’’ means FSK, FSKR, 

KCOP and KIO. ‘‘Future Regulated Entity’’ means 

a closed–end management investment company (a) 

that is registered under the Act or has elected to be 

regulated as a BDC and (b) whose investment 

adviser or sub-adviser is a KKR Credit Adviser that 

is registered as an investment adviser under the 

Act. ‘‘KKR Credit Adviser’’ means an Existing KKR 

Credit Adviser or any investment adviser that (i) is 

controlled by, or is a relying adviser of, KKR Credit, 

(ii) is registered as an investment adviser under the 

Advisers Act, and (iii) is not a Regulated Entity or 

a subsidiary of a Regulated Entity. ‘‘Existing KKR 

Credit Adviser’’ means KKR Credit, FS/KKR 

Advisor, and the investment advisory subsidiaries 

and relying advisers of KKR Credit set forth on 

schedule A of the application (‘‘Schedule A’’). 

‘‘Adviser’’ means any KKR Credit Adviser; 

provided that a KKR Credit Adviser serving as a 

sub-adviser to an Affiliated Fund is included in this 

term only if (i) such KKR Credit Adviser controls 

the entity and (ii) the primary adviser to such 

Affiliated Fund is not an Adviser. The term Adviser 

does not include any other primary adviser to an 

Affiliated Fund or a Regulated Entity whose subadviser is an Adviser, except that such adviser is 

deemed to be an Adviser for purposes of Conditions 

2(c)(iv), 14 and 15 only. Any primary adviser to an 

Affiliated Fund or a Regulated Entity whose subKKR SPECIAL SITUATIONS 

(OFFSHORE) FUND L.P., KKR SPECIAL 

SITUATIONS (DOMESTIC) FUND II 

L.P., KKR SPECIAL SITUATIONS (EEA) 

FUND II L.P., KKR STRATEGIC 

CAPITAL OVERSEAS FUND LTD., 

KKR–CDP PARTNERS L.P., KKR–PBPR 

CAPITAL PARTNERS L.P., KKR 

CREDIT SELECT (DOMESTIC) FUND 

L.P., KKR PRIVATE CREDIT 

OPPORTUNITIES PARTNERS II L.P., 

KKR PRIVATE CREDIT 

OPPORTUNITIES PARTNERS II (EEA) 

L.P., KKR PRIVATE CREDIT 

OPPORTUNITIES PARTNERS II (EEA) 

EURO L.P., KKR TACTICAL VALUE 

SPN L.P., KKR LENDING PARTNERS 

EUROPE (GBP) UNLEVERED L.P., KKR 

LENDING PARTNERS EUROPE (EURO) 

UNLEVERED L.P., KKR LENDING 

PARTNERS EUROPE (USD) L.P., KKR 

LENDING PARTNERS EUROPE (EURO) 

L.P., KKR EUROPEAN RECOVERY 

PARTNERS L.P., KKR REVOLVING 

CREDIT PARTNERS L.P., AVOCA 

CAPITAL CLO X DESIGNATED 

ACTIVITY COMPANY, AVOCA CLO XI 

DESIGNATED ACTIVITY COMPANY, 

AVOCA CLO XII DESIGNATED 

ACTIVITY COMPANY, AVOCA CLO 

XIII DESIGNATED ACTIVITY 

COMPANY, AVOCA CLO XIV 

DESIGNATED ACTIVITY COMPANY, 

AVOCA CLO XV DESIGNATED 

ACTIVITY COMPANY, AVOCA CLO 

XVI DESIGNATED ACTIVITY 

COMPANY, AVOCA CLO XVII 

DESIGNATED ACTIVITY COMPANY, 

AVOCA CLO XVIII DESIGNATED 

ACTIVITY COMPANY, AVOCA CLO 

XIX DESIGNATED ACTIVITY 

COMPANY, AVOCA CLO XX 

DESIGNATED ACTIVITY COMPANY, 

AVOCA CLO XXI DESIGNATED 

ACTIVITY COMPANY, AVOCA CLO 

XXIV DESIGNATED ACTIVITY 

COMPANY, KKR EUROPEAN 

FLOATING RATE LOAN FUND, 

ABSALON CREDIT DESIGNATED 

ACTIVITY COMPANY, GARDAR LOAN 

FUND, AVOCA CREDIT 

OPPORTUNITIES PLC, KKR 

EUROPEAN CREDIT OPPORTUNITIES 

FUND II, PRISMA SPECTRUM FUND 

LP, POLAR BEAR FUND LP, KKR TFO 

PARTNERS L.P., TACTICAL VALUE 

SPN—APEX CREDIT L.P., TACTICAL 

VALUE SPN–GLOBAL DIRECT 

LENDING L.P., KKR GLOBAL CREDIT 

OPPORTUNITIES MASTER FUND L.P., 

TACTICAL VALUE SPN–GLOBAL 

CREDIT OPPORTUNITIES L.P., KKR 

PRINCIPAL OPPORTUNITIES 

PARTNERSHIP L.P., KKR SPN CREDIT 

INVESTORS L.P., CDPQ AMERICAN 

FIXED INCOME III, L.P., KKR LENDING 

PARTNERS III L.P., LP III WAREHOUSE 

LLC, KKR ACS CREDIT FUND, KKR 

BESPOKE GLOBAL CREDIT 

OPPORTUNITIES (IRELAND) FUND, 

KKR CREDIT INCOME FUND, KKR DAF 

DIRECT LENDING FUND, KKR DAF 

GLOBAL OPPORTUNISTIC CREDIT 

FUND, KKR DAF PRIVATE CREDIT 

FUND, KKR DAF STERLING ASSETS 

FUND, KKR DAF SYNDICATED LOAN 

AND HIGH YIELD FUND, KKR DAF 

SECURITISED PRIVATE CREDIT FUND, 

KKR DRAGON CO–INVEST L.P., KKR 

EUROPEAN CREDIT OPPORTUNITIES 

FUND II DESIGNATED ACTIVITY 

COMPANY, KKR GLOBAL CREDIT 

DISLOCATION (CAYMAN) LTD., KKR 

DISLOCATION OPPORTUNITIES 

(DOMESTIC) FUND L.P., KKR 

DISLOCATION OPPORTUNITIES (EEA) 

FUND SCSP, KKR GOLDFINCH L.P., 

KKR LENDING PARTNERS EUROPE II 

(EURO) UNLEVERED SCSP, KKR 

LENDING PARTNERS EUROPE II (USD) 

SCSP, KKR MACKELLAR PARTNERS 

L.P., KKR PIP CREDIT INVESTORS 

LLC, KKR REVOLVING CREDIT 

PARTNERS EUROPE SCSP, KKR 

REVOLVING CREDIT PARTNERS II 

L.P., KKR SENIOR FLOATING RATE 

INCOME FUND, KKR US CLO EQUITY 

PARTNERS II L.P., KKR US CLO 

EQUITY PARTNERS L.P., KKR– 

BARMENIA EDL PARTNERS SCSP, 

KKR–CARDINAL CREDIT 

OPPORTUNITIES FUND L.P., KKR– 

DUS EDL PARTNERS SCSP, KKR– 

GENERALI PARTNERS SCSP SICAV– 

RAIF, KKR–MANDATE 2020 DIRECT 

LENDING FUND, KKR–MILTON CO– 

INVESTMENTS II L.P., KKRN EURO 

LOAN FUND 2018 FCP–RAIF, KKR– 

NYC CREDIT A L.P., KKR–NYC CREDIT 

B L.P., KKR–NYC CREDIT C L.P., KKR– 

UWF DIRECT LENDING PARTNERSHIP 

L.P., PRISMA PELICAN FUND LLC, 

RR–RW CREDIT L.P., SWISS CAPITAL 

KKR PRIVATE DEBT FUND L.P., KKR– 

JESSELTON HIF CREDIT PARTNERS 

L.P., KKR–MILTON CREDIT HOLDINGS 

L.P., KKR–MILTON OPPORTUNISTIC 

CREDIT FUND L.P., KKR CENTRAL 

PARK LEASING AGGREGATOR L.P., 

FS KKR CAPITAL CORP. (‘‘FSK’’), FS 

KKR CAPITAL CORP. II (‘‘FSKR’’), FS/ 

KKR ADVISOR, LLC (‘‘FS/KKR 

Advisor’’). 

Filing Dates: The application was 

filed on September 13, 2018, and 

amended on September 4, 2020, and 

December 3, 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 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 

4, 2021, and should be accompanied by 

proof of service on 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. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary at 

Secretarys-Office@sec.gov. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, SecretarysOffice@sec.gov. Applicants: Noah 

Greenhill, KKR Credit Advisors (US) 

LLC, Noah.Greenhill@kkr.com. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer O. Palmer, Senior Counsel, at 

(303) 844–1012, or David J. Marcinkus, 

Branch Chief, at (202) 551–6825 (Chief 

Counsel’s Office, Division of Investment 

Management). 

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. 

Introduction 

1. The Applicants request an order of 

the Commission under Sections 17(d) 

and 57(i) and Rule 17d–1 thereunder 

(the ‘‘Order’’) to permit, subject to the 

terms and conditions set forth in the 

application (the ‘‘Conditions’’), one or 

more Regulated Entities 1 and/or one or 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81989 

adviser is an Adviser will not source any Potential 

Co-Investment Transactions under the requested 

Order. 

2 ‘‘Affiliated Fund’’ means (a) any Existing 

Affiliated Fund or (b) any entity (i) whose 

investment adviser or sub-adviser is a KKR Credit 

Adviser and (ii) that either (A) would be an 

investment company but for Section 3(c)(1), 

3(c)(5)(C) or 3(c)(7) of the Act or (B) relies on the 

Rule 3a-7 exemption from investment company 

status; provided that an entity sub-advised by a 

KKR Credit Adviser is included in this term only 

if (i) such KKR Credit Adviser serving as subadviser controls the entity and (ii) the primary 

adviser of such Affiliated Fund is not an Adviser. 

‘‘Existing Affiliated Fund’’ means each investment 

fund set forth on Schedule A together with its direct 

and indirect wholly-owned subsidiaries. 

3 ‘‘Affiliated Investor’’ means any Affiliated Fund 

or any Proprietary Affiliate. ‘‘Proprietary Affiliate’’ 

means any KCM Company or any KKR Proprietary 

Account. ‘‘KCM Company’’ means (a) any Existing 

KCM Company (defined below) or (b) any entity 

that (i) is an indirect, wholly- or majority-owned 

subsidiary of KKR and (ii) is registered or 

authorized as a broker-dealer or its foreign 

equivalent. ‘‘KKR Proprietary Account’’ means (a) 

any Existing KKR Proprietary Account (defined 

below) or (b) any entity that (i) is an indirect, 

wholly- or majority- owned subsidiary of KKR, (ii) 

is advised by a KKR Credit Adviser and (iii) from 

time to time, may hold various financial assets in 

a principal capacity, as described in greater detail 

herein. 

4All existing entities that currently intend to rely 

on the Order have been named as Applicants and 

any existing or future entities that may rely on the 

Order in the future will comply with the terms and 

Conditions of the Application. 

5Section 2(a)(48) defines a BDC to be any closed– 

end investment company that operates for the 

purpose of making investments in securities 

described in Section 55(a)(1) through 55(a)(3) and 

makes available significant managerial assistance 

with respect to the issuers of such securities. 

6 ‘‘Board’’ means the board of directors or trustees 

of a Regulated Entity. 

7 ‘‘Independent Director’’ means the director or 

trustee of any Regulated Entity who is not an 

‘‘interested person’’ within the meaning of Section 

2(a)(19) of the Act. No Independent Director of a 

Regulated Entity will have a financial interest in 

any Co-Investment Transaction, other than 

indirectly through share ownership in one of the 

Regulated Entities. 

8 ‘‘Blocker Subsidiary’’ means an entity (a) whose 

sole business purpose is to hold one or more 

investments on behalf of a Regulated Entity; (b) that 

is wholly-owned by the Regulated Entity (with the 

Regulated Entity at all times holding, beneficially 

and of record, 100% of the voting and economic 

interests); (c) with respect to which the Regulated 

Entity’s Board has the sole authority to make all 

determinations with respect to the Blocker 

Subsidiary’s participation under the conditions to 

this Application; (d) that does not pay a separate 

advisory fee, including any performance-based fee, 

to any person; and (e) that is an entity that would 

be an investment company but for Section 3(c)(1) 

or 3(c)(7) of the Act. 

9 ‘‘Objectives and Strategies’’ means a Regulated 

Entity’s investment objectives and strategies, as 

described in the Regulated Entity’s registration 

statement on Form N–2, other filings the Regulated 

Entity has made with the Commission under the 

Continued 

more Affiliated Funds 2 to enter into CoInvestment Transactions with each 

other. ‘‘Co-Investment Transaction’’ 

means any transaction in which a 

Regulated Entity (or a Blocker 

Subsidiary, defined below) participated 

together with one or more other 

Regulated Entities and/or one or more 

Affiliated Investors in reliance on the 

Order or the Prior Order. ‘‘Potential CoInvestment Transaction’’ means any 

investment opportunity in which a 

Regulated Entity (or a Blocker 

Subsidiary) could not participate 

together with one or more other 

Regulated Entities and/or one or more 

Affiliated Investors 3 without obtaining 

and relying on the Order.4

Applicants 

2. FS KKR Capital Corp. (‘‘FSK’’) and 

FS KKR Capital Corp. II (‘‘FSKR’’) are 

closed–end management investment 

companies that have elected to be 

regulated as business development 

companies (‘‘BDCs’’) under the Act.5

FSK and FSKR were each organized 

under the General Corporation Law of 

the State of Maryland for the purpose of 

operating as an externally-managed, 

non-diversified, BDC. FSK and FSKR 

each have a Board 6 that is comprised of 

a majority of Independent Directors.7

3. KKR Income Opportunities Fund 

(‘‘KIO’’) and KKR Credit Opportunities 

Portfolio (‘‘KCOP’’) were organized as 

statutory trusts under the laws of the 

State of Delaware. KIO and KCOP are 

diversified, closed–end management 

investment companies registered under 

the Act. KCOP is a continuously offered 

closed–end fund that operates as an 

interval fund. KIO and KCOP each have 

a five member Board, of which four 

members are Independent Directors. 

4. FS/KKR Advisor and KKR Credit 

are Delaware limited liability companies 

registered as investment advisers with 

the Commission. FS/KKR Advisor is 

controlled by KKR Credit. FS/KKR 

Advisor serves as the investment 

adviser to FSK and FSKR. KKR Credit, 

a subsidiary of KKR & Co., Inc. (‘‘KKR’’), 

serves as the investment adviser to KIO 

and KCOP. Each Regulated Entity will 

be advised or sub-advised by KKR 

Credit or another KKR Credit Adviser 

that is a registered investment adviser. 

5. The Existing Affiliated Funds are 

the investment funds identified on 

Schedule A, together with their direct 

and indirect wholly-owned subsidiaries. 

Applicants represent that each 

investment fund identified on Schedule 

A is an entity that either (A) would be 

an investment company but for Section 

3(c)(1) or 3(c)(7) of the 1940 Act or (B) 

relies on the Rule 3a-7 exemption from 

investment company status. Certain 

Existing Affiliated Funds are 

collateralized loan obligation (‘‘CLO’’) 

entities that rely on Rule 3a-7 under the 

Act in addition to Section 3(c)(7) 

thereof. These Existing Affiliated Funds 

are all advised by an Existing KKR 

Credit Adviser. 

6. KKR Capital Markets Holdings L.P. 

and its capital markets subsidiaries set 

forth on Schedule A, each of which is 

an indirect, wholly- or majority-owned 

subsidiary of KKR, may, from time to 

time, hold various financial assets in a 

principal capacity (the ‘‘Existing KCM 

Companies’’). In addition, KKR 

Financial Holdings LLC, its whollyowned subsidiaries set forth on 

Schedule A and its wholly-owned 

subsidiaries that may be formed in the 

future, and other indirect, wholly- or 

majority-owned subsidiaries of KKR set 

forth on Schedule A may, from time to 

time, hold various financial assets in a 

principal capacity (the ‘‘Existing KKR 

Proprietary Accounts’’). 

7. Applicants state that any of the 

Regulated Entities may, from time to 

time, form a special purpose subsidiary 

(a ‘‘Blocker Subsidiary’’).8 A Blocker 

Subsidiary would be prohibited from 

investing in a Co-Investment 

Transaction with any other Regulated 

Entity or Affiliated Investor because it 

would be a company controlled by the 

Regulated Entity for purposes of Section 

57(a)(4) and rule 17d–1. Applicants 

request that a Blocker Subsidiary be 

permitted to participate in CoInvestment Transactions in lieu of its 

parent Regulated Entity and that the 

Blocker Subsidiary’s participation in 

any such transaction be treated, for 

purposes of the Order, as though the 

parent Regulated Entity were 

participating directly. 

Applicants’ Representations 

A. Allocation Process 

8. Applicants state that opportunities 

for Potential Co-Investment 

Transactions may arise when advisory 

personnel of a KKR Credit Adviser 

become aware of investment 

opportunities that may be appropriate 

for a Regulated Entity, one or more other 

Regulated Entities and/or one or more 

Affiliated Investors. In such cases, 

Applicants state that the Adviser to a 

Regulated Entity will be notified of such 

Potential Co-Investment Transactions, 

and such investment opportunities may 

result in Co-Investment Transactions. 

For each such investment opportunity, 

the Adviser to a Regulated Entity will 

independently analyze and evaluate the 

investment opportunity as to its 

appropriateness for each Regulated 

Entity for which it serves as investment 

adviser taking into consideration the 

Regulated Entity’s Objectives and 

Strategies 9 and any Board–Established 

81990 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

Securities Act of 1933, as amended (the ‘‘1933 

Act’’), or under the Securities and Exchange Act of 

1934, as amended (the ‘‘1934 Act’’), and the 

Regulated Entity’s reports to shareholders. 10 ‘‘Board–Established Criteria’’ means criteria 

that the Board of a Regulated Entity may establish 

from time to time to describe the characteristics of 

Potential Co-Investment Transactions regarding 

which each Adviser to the Regulated Entity should 

be notified under condition 1. The Board– 

Established Criteria will be consistent with a 

Regulated Entity’s Objectives and Strategies. If no 

Board–Established Criteria are in effect, then each 

Adviser to a Regulated Entity will be notified of all 

Potential Co-Investment Transactions that fall 

within the Regulated Entity’s then-current 

Objectives and Strategies. Board–Established 

Criteria will be objective and testable, meaning that 

they will be based on observable information, such 

as industry/sector of the issuer, minimum EBITDA 

of the issuer, asset class of the investment 

opportunity or required commitment size, and not 

on characteristics that involve a discretionary 

assessment. Each Adviser to a Regulated Entity may 

from time to time recommend criteria for the 

Board’s consideration, but Board–Established 

Criteria will only become effective if approved by 

a majority of the Independent Directors. The 

Independent Directors of a Regulated Entity may at 

any time rescind, suspend or qualify its approval 

of any Board–Established Criteria, though 

Applicants anticipate that, under normal 

circumstances, the Board would not modify these 

criteria more often than quarterly. 11The term ‘‘Eligible Directors’’ means the 

directors or trustees who are eligible to vote under 

section 57(o) of the Act. 

12 In the case of a Regulated Entity that is a 

registered closed–end fund, the directors or trustees 

that make up the Required Majority will be 

determined as if the Regulated Entity were a BDC 

subject to Section 57(o). 

13 ‘‘Follow-On Investment’’ means an additional 

investment in an existing portfolio company, the 

exercise of warrants, conversion privileges or other 

similar rights to acquire additional securities of the 

portfolio company. 

14 ‘‘Pre-Boarding Investments’’ are investments in 

an issuer held by a Regulated Entity as well as one 

or more Affiliated Funds, one or more Proprietary 

Affiliates and/or one or more other Regulated 

Entities that were acquired prior to participating in 

any Co-Investment Transaction: (i) In transactions 

in which the only term negotiated by or on behalf 

of such funds was price in reliance on one of the 

JT No-Action Letters; or (ii) in transactions 

occurring at least 90 days apart and without 

coordination between the Regulated Entity and any 

Affiliated Fund or other Regulated Entity. ‘‘JT NoAction Letters’’ means SMC Capital, Inc., SEC NoAction Letter (pub. avail. Sept. 5, 1995) and 

Massachusetts Mutual Life Insurance Company, 

SEC No-Action Letter (pub. avail. June 7, 2000). 

Criteria.10 If the Adviser to the 

Regulated Entity determines that the 

opportunity is appropriate for one or 

more Regulated Entities (and the 

applicable Adviser approves the 

investment for each Regulated Entity for 

which it serves as adviser), and one or 

more other Regulated Entities and/or 

one or more Affiliated Investors may 

also participate, the Adviser to a 

Regulated Entity will present the 

investment opportunity to the Eligible 

Directors 11 of the Regulated Entity prior 

to the actual investment by the 

Regulated Entity. As to any Regulated 

Entity, a Co-Investment Transaction will 

be consummated only upon approval by 

a required majority of the Eligible 

Directors within the meaning of Section 

57(o) of such Regulated Entity 

(‘‘Required Majority’’).12

9. Applicants state that each Adviser, 

acting through an investment 

committee, will carry out its obligation 

under condition 1 to make a 

determination as to the appropriateness 

of the Potential Co-Investment 

Transaction for any Regulated Entity. In 

the case of a Potential Co-Investment 

Transaction, the applicable Adviser 

would apply its allocation policies and 

procedures in determining the proposed 

allocation for the Regulated Entity 

consistent with the requirements of 

condition 2(a). Applicants note that 

each Adviser, as a registered investment 

adviser with respect to the Regulated 

Entities and as a registered investment 

adviser or a relying adviser with respect 

to the Affiliated Funds, has developed 

a robust allocation process as part of its 

overall compliance policies and 

procedures. Applicants state that these 

procedures are in addition to, and not 

instead of, the procedures required 

under the conditions. 

10. Applicants acknowledge that 

some of the Affiliated Investors may not 

be funds advised by an Adviser because 

they are KKR Proprietary Accounts or 

KCM Companies. KKR Proprietary 

Accounts are balance sheet entities 

advised by an Adviser pursuant to an 

investment management agreement that 

hold financial assets in a principal 

capacity. KCM Companies are regulated 

broker-dealers that may hold financial 

assets in a principal capacity. 

Applicants do not believe that the 

participation of Proprietary Affiliates in 

the co-investment program would raise 

any regulatory or mechanical concerns 

different from those discussed with 

respect to the Affiliated Investors that 

are clients. 

11. Applicants represent that the 

Advisers have implemented a robust 

allocation process to ensure that each 

Regulated Entity is treated fairly in 

respect of the allocation of Potential CoInvestment Transactions. The initial 

amount proposed by an Adviser to be 

allocated to each applicable Regulated 

Entity is documented in a written 

allocation statement. If the amount 

proposed to be allocated to a Regulated 

Entity changes from the time the final 

written allocation statement is prepared 

and the date of settlement of the 

transaction, the updated allocation 

statement will also be recorded and 

reviewed by a member of the Regulated 

Entity’s compliance team. Each 

Regulated Entity’s Board will be 

provided with all relevant information 

regarding the Adviser’s proposed 

allocations to such Regulated Entity and 

Affiliated Investors, including 

Proprietary Affiliates, as contemplated 

by the conditions hereof. With respect 

to Affiliated Investors that are relying on 

the Order, each Adviser is subject to the 

same robust allocation process. As a 

result, all Potential Co-Investment 

Transactions that are presented to an 

Adviser would also be presented to 

every other Adviser which, as required 

by condition 1, would make an 

independent determination of the 

appropriateness of the investment for 

the Regulated Entities. 

B. Follow-On Investments 

12. Applicants state that, from time to 

time, the Regulated Entities and 

Affiliated Investors may have 

opportunities to make Follow-On 

Investments 13 in an issuer in which a 

Regulated Entity, one or more other 

Regulated Entities and/or one or more 

Affiliated Investors previously have 

invested and continue to hold an 

investment. 

13. Applicants propose that FollowOn Investments would be divided into 

two categories depending on whether 

the prior investment was a CoInvestment Transaction or a PreBoarding Investment.14 If the Regulated 

Entities and Affiliated Funds (and 

potentially Proprietary Affiliates) have 

previously participated in a CoInvestment Transaction with respect to 

the issuer, then the terms and approval 

of the Follow-On Investment (a 

‘‘Standard Review Follow-On’’) would 

be subject to the process described in 

Condition 9. If the Regulated Entities 

and Affiliated Funds have not 

previously participated in a CoInvestment Transaction with respect to 

the issuer but hold a Pre-Boarding 

Investment, then the terms and approval 

of the Follow-On Investment (an 

‘‘Enhanced Review Follow-On’’) would 

be subject to the process described in 

Condition 10. All Enhanced Review 

Follow-Ons require the approval of the 

Required Majority. For a given issuer, 

the participating Regulated Entities and 

Affiliated Investors would need to 

comply with the requirements of 

Enhanced-Review Follow-Ons only for 

the first Co-Investment Transaction. 

Subsequent Co-Investment Transactions 

with respect to the issuer would be 

governed by the requirements of 

Standard Review Follow-Ons. 

14. A Regulated Entity would be 

permitted to invest in Standard Review 

Follow-Ons either with the approval of 

the Required Majority under Condition 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81991 

15A ‘‘Pro Rata Follow-On Investment’’ is a 

Follow-On Investment (i) in which the participation 

of each Regulated Entity and each Affiliated 

Investor is proportionate to its outstanding 

investments in the issuer or security, as 

appropriate, immediately preceding the Follow-On 

Investment, and (ii) in the case of a Regulated 

Entity, a majority of the Board has approved the 

Regulated Entity’s participation in the pro rata 

Follow-On Investments as being in the best interests 

of the Regulated Entity. The Regulated Entity’s 

Board may refuse to approve, or at any time rescind, 

suspend or qualify, its approval of Pro Rata FollowOn Investments, in which case all subsequent 

Follow-On Investments will be submitted to the 

Regulated Entity’s Eligible Directors in accordance 

with Condition 9(c). 

16A ‘‘Non-Negotiated Follow-On Investment’’ is a 

Follow-On Investment in which a Regulated Entity 

participates together with one or more Affiliated 

Investors and/or one or more other Regulated 

Entities (i) in which the only term negotiated by or 

on behalf of the funds is price and (ii) with respect 

to which, if the transaction were considered on its 

own, the funds would be entitled to rely on one of 

the JT No-Action Letters. 

17 ‘‘Disposition’’ means the sale, exchange or 

other disposition of an interest in a security of an 

issuer. 

18However, with respect to an issuer, if a 

Regulated Entity’s first Co-Investment Transaction 

is an Enhanced Review Disposition, and the 

Regulated Entity does not dispose of its entire 

position in the Enhanced Review Disposition, then 

before such Regulated Entity may complete its first 

Standard Review Follow-On in such issuer, the 

Eligible Directors must review the proposed FollowOn Investment not only on a stand-alone basis but 

also in relation to the total economic exposure in 

such issuer (i.e., in combination with the portion of 

the Pre-Boarding Investment not disposed of in the 

Enhanced Review Disposition), and the other terms 

of the investments. This additional review is 

required because such findings were not required 

in connection with the prior Enhanced Review 

Disposition, but they would have been required had 

the first Co-Investment Transaction been an 

Enhanced Review Follow-On. 

19A ‘‘Pro Rata Disposition’’ is a Disposition (i) in 

which the participation of each Regulated Entity 

and each Affiliated Investor is proportionate to its 

outstanding investment in the security subject to 

Disposition immediately preceding the Disposition; 

and (ii) in the case of a Regulated Entity, a majority 

of the Board has approved the Regulated Entity’s 

participation in pro rata Dispositions as being in the 

best interests of the Regulated Entity. The Regulated 

Entity’s Board may refuse to approve, or at any time 

rescind, suspend or qualify, their approval of Pro 

Rata Dispositions, in which case all subsequent 

Dispositions will be submitted to the Regulated 

Entity’s Eligible Directors. 

20 ‘‘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 902(b) 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 Entities holding 

investments in the issuer and retained for the life 

of the Regulated Entity) to allow each Regulated 

Entity 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 2(a)(41) of the 1940 

Act) at which the Regulated Entity has valued the 

investment. 

9(c) or without Board approval under 

Condition 9(b) if it is (i) a Pro Rata 

Follow-On Investment 15 or (ii) a NonNegotiated Follow-On Investment.16

Applicants believe that these Pro Rata 

and Non-Negotiated Follow-On 

Investments do not present a significant 

opportunity for overreaching on the part 

of any Adviser and thus do not warrant 

the time or the attention of the Board. 

Pro Rata and Non-Negotiated Follow-On 

Investments remain subject to the 

Board’s periodic review in accordance 

with Condition 11. 

C. Dispositions 

15. Applicants propose that 

Dispositions 17 would be divided into 

two categories. If the Regulated Entities 

and Affiliated Funds (and potentially 

Proprietary Affiliates) holding 

investments in the issuer had previously 

participated in a Co-Investment 

Transaction with respect to the issuer 

and continue to hold any securities 

acquired in a Co-Investment Transaction 

for such issuer, then the terms and 

approval of the Disposition (a ‘‘Standard 

Review Disposition’’) would be subject 

to the process described in Condition 7. 

If the Regulated Entities and Affiliated 

Funds have not previously participated 

in a Co-Investment Transaction with 

respect to the issuer but hold a PreBoarding Investment, then the terms 

and approval of the Disposition (an 

‘‘Enhanced Review Disposition’’) would 

be subject to the process described in 

Condition 8. Subsequent Dispositions 

with respect to the same issuer would 

be governed by the requirements of 

Standard Review Dispositions.18

16. A Regulated Entity may 

participate in a Standard Review 

Disposition either with the approval of 

the Required Majority under Condition 

7(d) or without Board approval under 

Condition 7(c) if (i) the Disposition is a 

Pro Rata Disposition 19 or (ii) the 

securities are Tradable Securities 20 and 

the Disposition meets the other 

requirements of Condition 7(c)(ii). Pro 

Rata Dispositions and Dispositions of a 

Tradable Security remain subject to the 

Board’s periodic review in accordance 

with Condition 11. 

D. Delayed Settlement 

17. Applicants represent that all 

Regulated Entities and Affiliated 

Investors 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 a Regulated Entity, and vice versa. 

Nevertheless, in all cases, (i) the date on 

which the commitment of the Affiliated 

Funds and Regulated Entities 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 Entity participating in the 

transaction will occur within ten 

business days of each other. 

E. Holders 

18. Under Condition 17, if an Adviser 

or its principals, or any person 

controlling, controlled by, or under 

common control with the Adviser or its 

principals, and any Affiliated Investor 

(collectively, the ‘‘Holders’’) own in the 

aggregate more than 25 percent of the 

outstanding voting shares of a Regulated 

Entity, then the Holders will vote such 

shares in the same percentages as the 

Regulated Entity’s other shareholders 

(not including the Holders) when voting 

on matters specified in the Condition. 

Applicants believe this Condition will 

ensure that the Independent Directors 

will act independently in evaluating the 

co-investment program, because the 

ability of the Adviser or its principals to 

influence the Independent Directors by 

a suggestion, explicit or implied, that 

the Independent Directors can be 

removed will be limited significantly. 

Applicants’ Legal Analysis: 

1. Section 17(d) of the 1940 Act 

generally prohibits an affiliated person 

(as defined in Section 2(a)(3) of the 1940 

Act), or an affiliated person of such 

affiliated person, of a registered closedend investment company acting as 

principal, from effecting any transaction 

in which the registered closed-end 

investment company is a joint or a joint 

and several participant, in 

contravention of such rules as the 

Commission may prescribe for the 

purpose of limiting or preventing 

participation by the registered closedend investment company on a basis 

different from or less advantageous than 

that of such other participant. Rule 17d– 

1 under the 1940 Act generally prohibits 

participation by a registered investment 

company and an affiliated person (as 

defined in Section 2(a)(3) of the 1940 

Act) or principal underwriter for that 

investment company, or an affiliated 

person of such affiliated person or 

principal underwriter, 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. 

2. Similarly, with regard to BDCs, 

Section 57(a)(4) makes it unlawful for 

any person who is related to a BDC in 

a manner described in Section 57(b), 

81992 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

acting as principal, knowingly to effect 

any transaction in which the BDC (or a 

company controlled by such BDC) is a 

joint or a joint and several participant 

with that person in contravention of 

rules and regulations as the Commission 

may prescribe for the purpose of 

limiting or preventing participation by 

the BDC (or a controlled company) on 

a basis less advantageous than that of 

the other participant. Because the 

Commission has not adopted any rules 

expressly under Section 57(a)(4), 

Section 57(i) provides that the rules 

under Section 17(d) applicable to 

registered closed-end investment 

companies (e.g., Rule 17d–1) are, in the 

interim, deemed to apply to transactions 

subject to Section 57(a). 

3. Co-Investment Transactions would 

be prohibited by Sections 17(d) and 

57(a)(4) and Rule 17d–1 without a prior 

exemptive order of the Commission to 

the extent that the Affiliated Investors 

and the other Regulated Entities fall 

within the categories of persons 

described by Section 17(d) and Section 

57(b), as modified by Rule 57b–1 

thereunder, vis-a`-vis each Regulated 

Entity. Each Regulated Entity may be 

deemed to be affiliated persons of each 

other Regulated Entity within the 

meaning of Section 2(a)(3) if it is 

deemed to be under common control 

because a KKR Credit Adviser is or will 

be either the investment adviser or subadviser to each Regulated Entity. 

Section 17(d) and Section 57(b) apply to 

any investment adviser to a closed-end 

fund or a BDC, respectively, including 

the sub-adviser. Thus, a KKR Credit 

Adviser and any Affiliated Investors 

that it advises could be deemed to be 

persons related to Regulated Entities in 

a manner described by Sections 17(d) 

and 57(b) and therefore prohibited by 

Sections 17(d) and 57(a)(4) and Rule 

17d–1 from participating in the coinvestment program. 

4. In addition, because all of the KKR 

Credit Advisers are ‘‘affiliated persons’’ 

of each other, Affiliated Investors 

advised by any of them could be 

deemed to be persons related to 

Regulated Entities (or a company 

controlled by a Regulated Entity) in a 

manner described by Sections 17(d) and 

57(b) and also prohibited from 

participating in the Co-Investment 

Program. 

5. Finally, because Proprietary 

Affiliates are under common control 

with each KKR Credit Adviser and, 

therefore, are ‘‘affiliated persons’’ of 

each KKR Credit Adviser, Proprietary 

Affiliates could be deemed to be persons 

related to Regulated Entities (or a 

company controlled by a Regulated 

Entity) in a manner described by 

Sections 17(d) and 57(b) and also 

prohibited from participating in the CoInvestment Program. 

6. In passing upon applications under 

rule 17d–1, the Commission considers 

whether the participation by the 

investment company in such joint 

enterprise, joint arrangement, or profitsharing plan on the basis proposed 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. 

7. Applicants submit that the fact that 

the Required Majority will approve each 

Co-Investment Transaction before 

investment (except for certain 

Dispositions or Follow-On Investments, 

as described in the conditions), and 

other protective conditions set forth in 

this Application, will ensure that a 

Regulated Entity will be treated fairly. 

Applicants state that the conditions to 

which the requested relief will be 

subject are designed to ensure that 

principals of the Advisers would not be 

able to favor the Affiliated Investors 

over a Regulated Entity through the 

allocation of investment opportunities 

among them. Further, Applicants state 

that the terms and conditions proposed 

herein will ensure that all such 

transactions are reasonable and fair to 

each Regulated Entity and the Affiliated 

Investors and do not involve 

overreaching by any person concerned, 

including a KKR Credit Adviser. 

Applicants submit that each Regulated 

Entity’s participation in the CoInvestment Transactions will be 

consistent with the provisions, policies 

and purposes of the 1940 Act and on a 

basis that is not different from or less 

advantageous than that of other 

participants. 

Applicants’ Conditions 

Applicants agree that the Order will 

be subject to the following Conditions: 

1. Each time a KKR Credit Adviser 

considers a Potential Co-Investment 

Transaction for an Affiliated Investor or 

another Regulated Entity that falls 

within a Regulated Entity’s then-current 

Objectives and Strategies and Board– 

Established Criteria, the Adviser to a 

Regulated Entity will make an 

independent determination of the 

appropriateness of the investment for 

the Regulated Entity in light of the 

Regulated Entity’s then-current 

circumstances. 

2. (a) If the Adviser to a Regulated 

Entity deems participation in any 

Potential Co-Investment Transaction to 

be appropriate for the Regulated Entity, 

the Adviser will then determine an 

appropriate level of investment for such 

Regulated Entity. 

(b) If the aggregate amount 

recommended by the Adviser (to a 

Regulated Entity to be invested by the 

Regulated Entity in the Potential CoInvestment Transaction, together with 

the amount proposed to be invested by 

the other participating Regulated 

Entities and Affiliated Investors, 

collectively, in the same transaction, 

exceeds the amount of the investment 

opportunity, the amount of the 

investment opportunity will be 

allocated among the Regulated Entities 

and such Affiliated Investors, pro rata 

based on each participant’s Available 

Capital for investment in the asset class 

being allocated, up to the amount 

proposed to be invested by each. The 

Adviser to a Regulated Entity will 

provide the Eligible Directors of a 

Regulated Entity with information 

concerning each participating party’s 

Available Capital to assist the Eligible 

Directors with their review of the 

Regulated Entity’s investments for 

compliance with these allocation 

procedures. 

(c) After making the determinations 

required in conditions 1 and 2(a) above, 

the Adviser to the Regulated Entity will 

distribute written information 

concerning the Potential Co-Investment 

Transaction, including the amount 

proposed to be invested by each 

Regulated Entity and any Affiliated 

Investor, to the Eligible Directors for 

their consideration. A Regulated Entity 

will co-invest with one or more other 

Regulated Entities and/or an Affiliated 

Investor only if, prior to the Regulated 

Entities’ and the Affiliated Investors’ 

participation in the Potential CoInvestment Transaction, a Required 

Majority concludes that: 

(i) The terms of the Potential CoInvestment Transaction, including the 

consideration to be paid, are reasonable 

and fair to the Regulated Entity and its 

shareholders and do not involve 

overreaching in respect of the Regulated 

Entity or its shareholders on the part of 

any person concerned; 

(ii) the Potential Co-Investment 

Transaction is consistent with: 

(A) The interests of the Regulated 

Entity’s shareholders; and 

(B) the Regulated Entity’s then-current 

Objectives and Strategies and Board– 

Established Criteria; 

(iii) the investment by any other 

Regulated Entity or an Affiliated 

Investor would not disadvantage the 

Regulated Entity, and participation by 

the Regulated Entity would not be on a 

basis different from or less advantageous 

than that of any other Regulated Entity 

or Affiliated Investor; provided, that the 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81993 

21This exception applies only to Follow-On 

Investments by a Regulated Entity in issuers in 

which that Regulated Entity already holds 

investments. 

22 ‘‘Related Party’’ means (i) any Close Affiliate 

and (ii) in respect of matters as to which any 

Adviser has knowledge, any Remote Affiliate. 

‘‘Close Affiliate’’ means the Advisers, the Regulated 

Entities, the Affiliated Funds and any other person 

described in Section 57(b) (after giving effect to 

Rule 57b–1) in respect of any Regulated Entity 

(treating any registered investment company or 

series thereof as a BDC for this purpose) except for 

limited partners included solely by reason of the 

reference in Section 57(b) to Section 2(a)(3)(D). 

‘‘Remote Affiliate’’ means any person described in 

Section 57(e) in respect of any Regulated Entity 

(treating any registered investment company or 

series thereof as a BDC for this purpose) and any 

limited partner holding 5% or more of the relevant 

limited partner interests that would be a Close 

Affiliate but for the exclusion in that definition. 

23For purposes of the requested Order, any KCM 

Company that is not advised by an Adviser is itself 

deemed to be an Adviser for purposes of this 

Condition 7(a) and Conditions 8(a), 9(a) and 10(a). 

24 In the case of any Disposition, proportionality 

will be measured by each participating Regulated 

Entity’s and Affiliated Investor’s outstanding 

investment in the security in question immediately 

preceding the Disposition. 

Required Majority shall not be 

prohibited from reaching the 

conclusions required by this Condition 

2(c)(iii) if: 

(A) The settlement date for another 

Regulated Entity or an Affiliated Fund 

in a Co-Investment Transaction is later 

than the settlement date for the 

Regulated Entity by no more than ten 

business days or earlier than the 

settlement date for the Regulated Entity 

by no more than ten business days, in 

either case, so long as: (x) The date on 

which the commitments of the 

Affiliated Funds and Regulated Entities 

are made is the same; and (y) the earliest 

settlement date and the latest settlement 

date of any Affiliated Fund or Regulated 

Entity participating in the transaction 

will occur within ten business days of 

each other; or 

(B) any other Regulated Entity or 

Affiliated Investor, but not the 

Regulated Entity itself, gains the right to 

nominate a director for election to a 

portfolio company’s board of directors 

or the right to have a board observer, or 

any similar right to participate in the 

governance or management of the 

portfolio company so long as: (x) The 

Eligible Directors will have the right to 

ratify the selection of such director or 

board observer, if any; (y) the Adviser to 

the Regulated Entity agrees to, and does, 

provide periodic reports to the 

Regulated Entity’s Board with respect to 

the actions of such director or the 

information received by such board 

observer or obtained through the 

exercise of any similar right to 

participate in the governance or 

management of the portfolio company; 

and (z) any fees or other compensation 

that any other Regulated Entity or any 

Affiliated Investor or any affiliated 

person of any other Regulated Entity or 

an Affiliated Investor receives in 

connection with the right of one or more 

Regulated Entities or Affiliated Investors 

to nominate a director or appoint a 

board observer or otherwise to 

participate in the governance or 

management of the portfolio company 

will be shared proportionately among 

the participating Affiliated Investors 

(who may, in turn, share their portion 

with their affiliated persons) and any 

participating Regulated Entity in 

accordance with the amount of each 

party’s investment; and 

(iv) the proposed investment by the 

Regulated Entity will not benefit the 

Advisers, any other Regulated Entity, or 

the Affiliated Investors or any affiliated 

person of any of them (other than the 

parties to the Co-Investment 

Transaction), except (A) to the extent 

permitted by condition 15, (B) to the 

extent permitted under Sections 17(e) 

and 57(k) of the 1940 Act, as applicable, 

(C) in the case of fees or other 

compensation described in condition 

2(c)(iii)(B), or (D) indirectly, as a result 

of an interest in the securities issued by 

one of the parties to the Co-Investment 

Transaction. 

3. A Regulated Entity will have the 

right to decline to participate in any 

Potential Co-Investment Transaction or 

to invest less than the amount proposed. 

4. The Adviser to the Regulated Entity 

will present to the Board of each 

Regulated Entity, on a quarterly basis, a 

record of all investments in Potential 

Co-Investments made by any of the 

other Regulated Entities or any of the 

Affiliated Investors during the 

preceding quarter that fell within the 

Regulated Entity’s then-current 

Objectives and Strategies and Board– 

Established Criteria that were not made 

available to the Regulated Entity, and an 

explanation of why the investment 

opportunities were not offered to the 

Regulated Entity. All information 

presented to the Board pursuant to this 

condition will be kept for the life of the 

Regulated Entity and at least two years 

thereafter, and will be subject to 

examination by the Commission and its 

staff. 

5. Except for Follow-On Investments 

made in accordance with condition 9 

and 10,21 a Regulated Entity will not 

invest in reliance on the Order in any 

issuer in which a Related Party 22 is an 

existing investor. 

6. A Regulated Entity will not 

participate in any Potential CoInvestment Transaction unless (i) the 

terms, conditions, price, class of 

securities to be purchased, the date on 

which the commitment is entered and 

registration rights will be the same for 

each participating Regulated Entity and 

Affiliated Investor and (ii) the earliest 

settlement date and the latest settlement 

date of any participating Regulated 

Entity or Affiliated Fund will occur as 

close in time as practicable and in no 

event more than ten business days apart. 

The grant to one or more Regulated 

Entities or Affiliated Investors, but not 

the Regulated Entity itself, of the right 

to nominate a director for election to a 

portfolio company’s board of directors, 

the right to have an observer on the 

board of directors or similar rights to 

participate in the governance or 

management of the portfolio company 

will not be interpreted so as to violate 

this Condition 6, if Condition 2(c)(iii)(B) 

is met. 

7. (a) If any Regulated Entity or 

Affiliated Investor elects to sell, 

exchange or otherwise dispose of an 

interest in a security that was acquired 

by one or more Regulated Entities and/ 

or Affiliated Investors in a CoInvestment Transaction, the applicable 

Adviser(s) 23 will: 

(i) Notify each Regulated Entity of the 

proposed Disposition at the earliest 

practical time; and 

(ii) formulate a recommendation as to 

participation by the Regulated Entity in 

the Disposition. 

(b) Each Regulated Entity will have 

the right to participate in such 

Disposition on a proportionate basis, at 

the same price and on the same terms 

and conditions as those applicable to 

the Affiliated Investors and any other 

Regulated Entity. 

(c) A Regulated Entity may participate 

in such Disposition without obtaining 

prior approval of the Required Majority 

if: 

(i)(A) The proposed participation of 

each Regulated Entity and each 

Affiliated Investor in such Disposition is 

proportionate to its outstanding 

investments in the issuer immediately 

preceding the Disposition; 24 (B) the 

Regulated Entity’s Board has approved 

as being in the best interests of the 

Regulated Entity the ability to 

participate in such Dispositions on a pro 

rata basis (as described in greater detail 

in this Application); and (C) the 

Regulated Entity’s Board is provided on 

a quarterly basis with a list of all 

Dispositions made in accordance with 

this condition; or 

(ii) each security is a Tradable 

Security and (A) the Disposition is not 

to the issuer or any affiliated person of 

the issuer; and (B) the security is sold 

for cash in a transaction in which the 

81994 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

25 In determining whether a holding is 

‘‘Immaterial’’ for purposes of the Order, the 

Required Majority will consider whether the nature 

and extent of the interest in the transaction or 

arrangement is sufficiently small that a reasonable 

person would not believe that the interest affected 

the determination of whether to enter into the 

transaction or arrangement or the terms of the 

transaction or arrangement. 

26To the extent that a Follow-On Investment 

opportunity is in a security or arises in respect of 

a security held by the participating Regulated 

Entities and Affiliated Investors, proportionality 

will be measured by each participating Regulated 

Entity’s and Affiliated Investor’s outstanding 

investment in the security in question immediately 

preceding the Follow-On Investment using the most 

recent available valuation thereof. To the extent that 

a Follow-On Investment opportunity relates to an 

opportunity to invest in a security that is not in 

respect of any security held by any of the 

participating Regulated Entities or Affiliated 

Investors, proportionality will be measured by each 

participating Regulated Entity’s and Affiliated 

Investor’s outstanding investment in the issuer 

immediately preceding the Follow-On Investment 

using the most recent available valuation thereof. 

only term negotiated by or on behalf of 

the participating Regulated Entities and 

Affiliated Investors is price. 

(d) In all other cases, the Adviser to 

the Regulated Entity will provide their 

written recommendation as to the 

Regulated Entity’s participation to the 

Eligible Directors, and the Regulated 

Entity will participate in such 

disposition solely to the extent that a 

Required Majority determines that it is 

in the Regulated Entity’s best interests. 

8. (a) If any Regulated Entity or 

Affiliated Investor elects to sell, 

exchange or otherwise dispose of a PreBoarding Investment in a Potential CoInvestment Transaction and the 

Regulated Entities and Affiliated 

Investors have not previously 

participated in a Co-Investment 

Transaction with respect to the issuer: 

(i) The Adviser to such Regulated 

Entity or Affiliated Investor will notify 

each Regulated Entity that holds an 

investment in the issuer of the proposed 

disposition at the earliest practical time; 

(ii) the Adviser to each Regulated 

Entity that holds an investment in the 

issuer, will formulate a recommendation 

as to participation by such Regulated 

Entity in the disposition; and 

(iii) the Advisers will provide to the 

Board of each Regulated Entity that 

holds an investment in the issuer all 

information relating to the existing 

investments in the issuer of the 

Regulated Entities and Affiliated 

Investors, including the terms of such 

investments and how they were made, 

that is necessary for the Required 

Majority to make the findings required 

by this condition. 

(b) The Adviser will provide its 

written recommendation as to the 

Regulated Entity’s participation to the 

Eligible Directors, and the Regulated 

Entity will participate in such 

disposition, solely to the extent that a 

Required Majority determines that: 

(i) The disposition complies with 

Condition 2(c)(i), (ii), (iii)(A) and (iv); 

and 

(ii) the making and holding of the PreBoarding Investments were not 

prohibited by Section 57 or Rule 17d– 

1, as applicable, and records the basis 

for the finding in the Board minutes. 

(c) The Disposition may only be 

completed in reliance on the Order if: 

(i) Each Regulated Entity has the right 

to participate in such disposition on a 

proportionate basis, at the same price 

and on the same terms and conditions 

as those applicable to the Affiliated 

Investors and any other Regulated 

Entity; 

(ii) All of the Affiliated Investors’ and 

Regulated Entities’ investments in the 

issuer are Pre-Boarding Investments; 

(iii) Independent counsel to the Board 

advises that the making and holding of 

the investments in the Pre-Boarding 

Investments were not prohibited by 

Section 57 (as modified by Rule 57b–1) 

or Rule 17d–1, as applicable; 

(iv) All Regulated Entities and 

Affiliated Investors that hold PreBoarding Investments in the issuer 

immediately before the time of 

completion of the Co-Investment 

Transaction hold the same security or 

securities of the issuer. For the purpose 

of determining whether the Regulated 

Entities and Affiliated Investors hold 

the same security or securities, they may 

disregard any security held by some but 

not all of them if, prior to relying on the 

Order, the Required Majority is 

presented with all information 

necessary to make a finding, and finds, 

that: (i) Any Regulated Entity’s or 

Affiliated Investor’s holding of a 

different class of securities (including 

for this purpose a security with a 

different maturity date) is Immaterial 25

in amount, including Immaterial 

relative to the size of the issuer; and (ii) 

the Board records the basis for any such 

finding in its minutes. In addition, 

securities that differ only in respect of 

issuance date, currency, or 

denominations may be treated as the 

same security; and 

(v) The Affiliated Investors, the other 

Regulated Entities and their affiliated 

persons (within the meaning of Section 

2(a)(3)(C) of the 1940 Act), individually 

or in the aggregate, do not control the 

issuer of the securities (within the 

meaning of Section 2(a)(9) of the 1940 

Act). 

9. (a) If any Regulated Entity or 

Affiliated Investor desires to make a 

Follow-On Investment in a portfolio 

company whose securities were 

acquired by the Regulated Entity and 

the Affiliated Investor in a CoInvestment Transaction, the applicable 

Adviser(s) will: 

(i) Notify the Regulated Entity of the 

proposed transaction at the earliest 

practical time; and 

(ii) formulate a recommendation as to 

the proposed participation, including 

the amount of the proposed Follow-On 

Investment, by the Regulated Entity. 

(b) A Regulated Entity may participate 

in such Follow-On Investment without 

obtaining prior approval of the Required 

Majority if: 

(i)(A) The proposed participation of 

each Regulated Entity and each 

Affiliated Investor in such investment is 

proportionate to its outstanding 

investments in the issuer or the security 

at issue, as appropriate,26 immediately 

preceding the Follow-On Investment 

and (B) the Regulated Entity’s Board has 

approved as being in the best interests 

of such Regulated Entity the ability to 

participate in Follow-On Investments on 

a pro rata basis (as described in greater 

detail in this Application); or 

(ii) it is a Non-Negotiated Follow-On 

Investment. 

(c) In all other cases, the Adviser to 

the Regulated Entity will provide their 

written recommendation as to such 

Regulated Entity’s participation to the 

Eligible Directors, and the Regulated 

Entity will participate in such FollowOn Investment solely to the extent that 

the Required Majority determines that it 

is in such Regulated Entity’s best 

interests. If the only previous CoInvestment Transaction with respect to 

the issuer was an Enhanced Review 

Disposition, the Eligible Directors must 

complete this review of the proposed 

Follow-On Investment both on a standalone basis and together with the PreBoarding Investments in relation to the 

total economic exposure and other 

terms of the investment. 

(d) If, with respect to any Follow-On 

Investment: 

(i) The amount of a Follow-On 

Investment is not based on the 

Regulated Entities’ and the Affiliated 

Investors’ outstanding investments 

immediately preceding the Follow-On 

Investment; and 

(ii) the aggregate amount 

recommended by the Adviser to a 

Regulated Entity to be invested by the 

Regulated Entity in the Follow-On 

Investment, together with the amount 

proposed to be invested by the other 

participating Regulated Entities and the 

Affiliated Investors in the same 

transaction, exceeds the amount of the 

opportunity; then the amount invested 

by each such party will be allocated 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81995 

among them pro rata based on each 

participant’s Available Capital for 

investment in the asset class being 

allocated, up to the amount proposed to 

be invested by each. 

(e) The acquisition of Follow-On 

Investments as permitted by this 

condition will be considered a CoInvestment Transaction for all purposes 

and subject to the other conditions set 

forth in the Application. 

10. (a) If any Regulated Entity or 

Affiliated Investor desires to make a 

Follow-On Investment in an issuer that 

is a Potential Co-Investment Transaction 

and the Regulated Entities and 

Affiliated Funds holding investments in 

the issuer have not previously 

participated in a Co-Investment 

Transaction with respect to the issuer: 

(i) The Adviser to each such 

Regulated Entity or Affiliated Investor 

will notify each Regulated Entity that 

holds securities of the portfolio 

company of the proposed transaction at 

the earliest practical time; 

(ii) the Adviser to each Regulated 

Entity that holds an investment in the 

issuer will formulate a recommendation 

as to the proposed participation, 

including the amount of the proposed 

investment, by such Regulated Entity; 

and 

(iii) the Advisers will provide to the 

Board of each Regulated Entity that 

holds an investment in the issuer all 

information relating to the existing 

investments in the issuer of the 

Regulated Entities and Affiliated 

Investors, including the terms of such 

investments and how they were made, 

that is necessary for the Required 

Majority to make the findings required 

by this condition. 

(b) The Adviser will provide its 

written recommendation as to the 

Regulated Entity’s participation to the 

Eligible Directors, and the Regulated 

Entity will participate in such FollowOn Investment solely to the extent that 

a Required Majority reviews the 

proposed Follow-On Investment both on 

a stand-alone basis and together with 

the Pre-Boarding Investments in relation 

to the total economic exposure and 

other terms and makes the 

determinations set forth in condition 

2(c). In addition, the Follow-On 

Investment may only be completed in 

reliance on the Order if the Required 

Majority of each participating Regulated 

Entity determines that the making and 

holding of the Pre-Boarding Investments 

were not prohibited by Section 57 (as 

modified by Rule 57b–1) or Rule 17d– 

1, as applicable. The basis for the 

Board’s findings will be recorded in its 

minutes. 

(c) The Follow-On Investment may 

only be completed in reliance on the 

Order if: 

(i) All of the Affiliated Investors’ and 

Regulated Entities’ investments in the 

issuer are Pre-Boarding Investments; 

and 

(ii) independent counsel to the Board 

advises that the making and holding of 

the investments in the Pre-Boarding 

Investments were not prohibited by 

Section 57 (as modified by Rule 57b–1) 

or Rule 17d–1, as applicable; 

(iii) all Regulated Entities and 

Affiliated Investors that hold PreBoarding Investments in the issuer 

immediately before the time of 

completion of the Co-Investment 

Transaction hold the same security or 

securities of the issuer. For the purpose 

of determining whether the Regulated 

Entities and Affiliated Investors hold 

the same security or securities, they may 

disregard any security held by some but 

not all of them if, prior to relying on the 

Order, the Required Majority is 

presented with all information 

necessary to make a finding, and finds, 

that: (i) Any Regulated Entity’s or 

Affiliated Investor’s holding of a 

different class of securities (including 

for this purpose a security with a 

different maturity date) is Immaterial in 

amount, including Immaterial relative to 

the size of the issuer; and (ii) the Board 

records the basis for any such finding in 

its minutes. In addition, securities that 

differ only in respect of issuance date, 

currency, or denominations may be 

treated as the same security; and 

(iv) the Affiliated Investors, the other 

Regulated Entities and their affiliated 

persons (within the meaning of Section 

2(a)(3)(C) of the 1940 Act), individually 

or in the aggregate, do not control the 

issuer of the securities (within the 

meaning of Section 2(a)(9) of the 1940 

Act); and 

(d) If, with respect to any such 

Follow-On Investment: 

(i) The amount of the opportunity 

proposed to be made available to any 

Regulated Entity is not based on the 

Regulated Entities’ and the Affiliated 

Funds’ outstanding investments in the 

issuer or the security at issue, as 

appropriate, immediately preceding the 

Follow-On Investment; and 

(ii) the aggregate amount 

recommended by the Advisers to be 

invested in the Follow-On Investment 

by the participating Regulated Entities 

and any participating Affiliated Funds, 

collectively, exceeds the amount of the 

investment opportunity, then the 

Follow-On Investment opportunity will 

be allocated among them pro rata based 

on each participant’s Available Capital 

for investment in the asset class being 

allocated, up to the amount proposed to 

be invested by each. 

(e) The acquisition of Follow-On 

Investments as permitted by this 

condition will be considered a CoInvestment Transaction for all purposes 

and subject to the other conditions set 

forth in this Application. 

11. The Independent Directors of each 

Regulated Entity will be provided 

quarterly for review all information 

concerning Potential Co-Investment 

Transactions and Co-Investment 

Transactions, including investments 

made by other Regulated Entities or 

Affiliated Investors that a Regulated 

Entity considered but declined to 

participate in, so that the Independent 

Directors may determine whether all 

investments made during the preceding 

quarter, including those investments 

which the Regulated Entity considered 

but declined to participate in, comply 

with the conditions of the Order. In 

addition, the Independent Directors will 

consider at least annually (a) the 

continued appropriateness for such 

Regulated Entity of participating in new 

and existing Co-Investment 

Transactions and (b) the continued 

appropriateness of any BoardEstablished Criteria. 

12. Each Regulated Entity will 

maintain the records required by 

Section 57(f)(3) of the 1940 Act as if 

each of the Regulated Entities were a 

BDC and each of the investments 

permitted under these conditions were 

approved by a Required Majority under 

Section 57(f). 

13. No Independent Director of a 

Regulated Entity will also be a director, 

general partner, managing member or 

principal, or otherwise an ‘‘affiliated 

person’’ (as defined in the 1940 Act) of 

any Affiliated Investor. 

14. The expenses, if any, associated 

with acquiring, holding or disposing of 

any securities acquired in a CoInvestment Transaction (including, 

without limitation, the expenses of the 

distribution of any such securities 

registered for sale under the 1933 Act) 

shall, to the extent not payable by the 

applicable Adviser(s) under their 

respective advisory agreements with the 

Regulated Entities and the Affiliated 

Investors, be shared by the Regulated 

Entities and the Affiliated Investors in 

proportion to the relative amounts of the 

securities held or to be acquired or 

disposed of, as the case may be. 

15. Any transaction fee (including 

break-up or commitment fees but 

excluding broker’s fees contemplated by 

Section 17(e) or 57(k) of the 1940 Act, 

81996 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

27Applicants are not requesting and the 

Commission is not providing any relief for 

transaction fees received in connection with any 

Co-Investment Transaction. 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Exchange Rule 518, Interpretation and 

Policy .07(a)(1). 

4See Exchange Rule 518, Interpretation and 

Policy .07(a)(3). 

as applicable) 27 received in connection 

with a Co-Investment Transaction will 

be distributed to the participating 

Regulated Entities and Affiliated 

Investors on a pro rata basis based on 

the amount they invested or committed, 

as the case may be, in such CoInvestment Transaction. If any 

transaction fee is to be held by an 

Adviser pending consummation of the 

transaction, the fee will be deposited 

into an account maintained by the 

Adviser at a bank or banks having the 

qualifications prescribed in Section 

26(a)(1) of the 1940 Act, and the account 

will earn a competitive rate of interest 

that will also be divided pro rata among 

the participating Regulated Entities and 

Affiliated Investors based on the amount 

they invest in the Co-Investment 

Transaction. None of the other 

Regulated Entities, Affiliated Investors, 

the applicable Adviser(s) nor any 

affiliated person of the Regulated 

Entities or the Affiliated Investors will 

receive additional compensation or 

remuneration of any kind as a result of 

or in connection with a Co-Investment 

Transaction (other than (a) in the case 

of the Regulated Entities and the 

Affiliated Investors, the pro rata 

transaction fees described above and 

fees or other compensation described in 

condition 2(c)(iii)(B) and (b) in the case 

of the Advisers, investment advisory 

fees paid in accordance with the 

Regulated Entities’ and the Affiliated 

Investors’ investment advisory 

agreements). 

16. The Advisers to the Regulated 

Entities and Affiliated Investors will 

maintain written policies and 

procedures reasonably designed to 

ensure compliance with the foregoing 

conditions. These policies and 

procedures will require, among other 

things, that each of the Advisers to each 

Regulated Entity will be notified of all 

Potential Co-Investment Transactions 

that fall within such Regulated Entity’s 

then-current Objectives and Strategies 

and Board-Established Criteria and will 

be given sufficient information to make 

its independent determination and 

recommendations under conditions 1, 

2(a), 7, 8, 9 and 10. 

17. If the Holders own in the aggregate 

more than 25 percent of the Shares of 

a Regulated Entity, then the Holders 

will vote such Shares in the same 

percentages as the Regulated Entity’s 

other shareholders (not including the 

Holders) when voting on (1) the election 

of directors; (2) the removal of one or 

more directors; or (3) any other matter 

under either the 1940 Act or applicable 

state law affecting the Board’s 

composition, size or manner of election. 

18. Each Regulated Entity’s chief 

compliance officer, as defined in Rule 

38a–1(a)(4), will prepare an annual 

report for its Board each year that 

evaluates (and documents the basis of 

that evaluation) the Regulated Entity’s 

compliance with the terms and 

conditions of the application and the 

procedures established to achieve such 

compliance. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27714 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90638; File No. SR–MIAX– 

2020–37] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Fee Schedule 

December 11, 2020. 

Pursuant to the provisions of Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on December 1, 2020, Miami 

International Securities Exchange LLC 

(‘‘MIAX Options’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Options Fee Schedule 

(‘‘Fee Schedule’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to (i) make a 

minor, corrective edit and clarifying 

change to one of the footnotes in Section 

1)b)i) of the Fee Schedule; and (ii) 

amend the exchange groupings of 

options exchanges within the routing 

fee table in Section 1)c) of the Fee 

Schedule. 

Fee Schedule Cleanup 

First, the Exchange proposes to 

amend footnote ‘‘!’’ in Section 1)b)i) of 

the Fee Schedule to make a minor, 

corrective edit and clarifying change. 

Footnote ‘‘!’’ currently provides as 

follows: ‘‘The SPIKES Combination 

portion of a SPIKES Combination Order 

will be charged at the Combination rate 

and other legs will be charged at the 

Complex rate. All fees are per contract 

per leg.’’ Pursuant to Exchange Rule 

518, Interpretation and Policy .07(a), a 

‘‘SPIKES Combination’’ is a purchase 

(sale) of a SPIKES call option and sale 

(purchase) of a SPIKES put option 

having the same expiration date and 

strike price.3 Further, a ‘‘SPIKES Combo 

Order’’ is an order to purchase or sell 

one or more SPIKES option series and 

the offsetting number of SPIKES 

Combinations defined by the delta.4 The 

Exchange proposes to amend footnote 

‘‘!’’ to delete the word ‘‘Combination’’ in 

the phrase ‘‘SPIKES Combination 

Order’’ and replace it with the word 

‘‘Combo.’’ The purpose of this proposed 

change is to provide the correct name of 

the type of order in footnote ‘‘!’’.