Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85773 

13 17 CFR 200.30–3(a)(12). 

substantially the same form as it was 

adopted by FINRA. The Exchange 

further believes that the proposed rule 

change would not significantly affect 

the protection of investors or the public 

interest or impose any significant 

burden on competition because the 

changes are based on the rules of 

FINRA. Moreover, the proposed rule 

change is not intended to address 

competitive issues but rather is 

concerned solely with providing 

temporary relief given the impacts of the 

COVID–19 pandemic. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MRX–2020–23 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MRX–2020–23. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, on business days 

between the hours of 10:00 a.m. and 

3:00 p.m., located at 100 F Street NE, 

Washington, DC 20549. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MRX–2020–23 and should 

be submitted on or before January 19, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28656 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34145; 813–00395] 

Signature PE Fund, LLC and 

McDermott Will & Emery LLP 

December 21, 2020 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

under sections 6(b) and 6(e) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) granting an exemption from all 

provisions of the Act, except sections 9, 

17, 30, and 36 through 53, and the rules 

and regulations under the Act (the 

‘‘Rules and Regulations’’). With respect 

to sections 17(a), (d), (f), (g) and (j) of the 

Act, sections 30(a), (b), (e), and (h) of the 

Act and the Rules and Regulations and 

rule 38a–1 under the Act, applicants 

request a limited exemption as set forth 

in the application. 

SUMMARY OF APPLICATION: Applicants 

request an order to exempt certain 

limited liability companies, 

partnerships, trusts, corporations or 

other entities (‘‘Investment Funds’’) 

formed for the benefit of eligible 

employees of McDermott Will & Emery 

LLC and its affiliates from certain 

provisions of the Act. Each Investment 

Fund will be an ‘‘employees’ securities 

company’’ within the meaning of 

section 2(a)(13) of the Act. 

APPLICANTS: Signature PE Fund, LLC 

(the ‘‘Initial Fund’’) and McDermott 

Will & Emery LLP. 

FILING DATES: The application was filed 

on February 26, 2019 and amended on 

August 19, 2019, July 21, 2020 and 

December 1, 2020. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the application 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 by email. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on January 15, 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: McDermott 

Will & Emery LLP: elaurenson@

mwe.com. 

FOR FURTHER INFORMATION CONTACT: 

Barbara T. Heussler, Senior Counsel, at 

(202) 551–6990, or Trace W. Rakestraw, 

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. McDermott Will & Emery LLP is a 

law firm organized as an Illinois limited 

liability partnership (together with any 

‘‘affiliates’’ as defined in rule 12b–2 

under the Securities Exchange Act of 

1934 (the ‘‘Exchange Act’’) of 

McDermott Will & Emery LLP that are 

organized to practice law, any successor 

entity of McDermott Will & Emery LLP 

or its affiliates or any entity that results 

from a reorganization of McDermott 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
85774 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

1 If an Eligible Trust is an entity or arrangement 

other than a trust, (a) the reference to ‘‘settlor’’ shall 

be construed to mean a person who created the 

vehicle or arrangement, alone or together with other 

Eligible Investors, and also contributed funds or 

other assets to the vehicle, and (b) the reference to 

‘‘trustee’’ shall be construed to mean a person who 

performs functions similar to those of a trustee. 

Will & Emery LLP or its affiliates into 

a different type of entity or into an 

entity organized under the laws of 

another jurisdiction (the ‘‘Company’’)). 

McDermott Will & Emery LLP is an 

international law firm that is owned 

exclusively by its capital partners. 

2. The Initial Fund is a Delaware 

limited liability company formed 

pursuant to a limited liability 

agreement. The applicants may in the 

future offer subsequent pooled 

investment vehicles substantially 

similar in all material respects (other 

than form of organization, investment 

objective and strategy, and other 

differences described in the application) 

to Eligible Investors (as defined below) 

(the ‘‘Subsequent Funds’’ and, together 

with the Initial Fund included in the 

term ‘‘Investment Funds’’). The 

applicants anticipate that each 

Subsequent Fund also will be structured 

as a limited liability company although 

a Subsequent Fund could be structured 

as a domestic or offshore general 

partnership, limited partnership, trust, 

corporation, or other form of business 

entity. The organizational documents 

for the Investment Funds are the 

‘‘Investment Fund Agreements.’’ An 

Investment Fund may include a single 

vehicle designed to issue interests in 

series or having similar features to 

enable a single Investment Fund to 

function as if it were several successive 

Investment Funds for ease of 

administration. Each Investment Fund 

will be an employees’ securities 

company within the meaning of section 

2(a)(13) of the Act. 

3. The Initial Fund has been 

established to enable certain Eligible 

Investors to participate in certain 

investment opportunities that come to 

the attention of the Company. These 

opportunities may include investments 

in operating businesses or real estate, 

separate accounts with registered or 

unregistered investment advisers, 

investments in pooled investment 

vehicles such as registered investment 

companies and investment companies 

exempt from registration under the Act, 

commodity pools, co-investments in 

operating entities and other investments 

(each particular investment being 

referred to herein as an ‘‘Investment’’). 

Applicants submit that a substantial 

community of interest exists among the 

Company and the members of the 

Investment Funds (‘‘Members’’). The 

Company will ‘‘control’’ each 

Investment Fund within the meaning of 

section 2(a)(9) of the Act. 

4. Interests in an Investment Fund 

(‘‘Interests’’) will be offered and sold in 

reliance upon the exemption from 

registration under section 4(2) of the 

Securities Act of 1933 (the ‘‘Securities 

Act’’) or pursuant to Regulation D under 

the Securities Act, or outside the United 

States in a transaction exempt under 

Regulation S under the Securities Act. 

Interests in any Investment Fund (other 

than short-term paper) will offered 

solely to the Company or Eligible 

Investors. ‘‘Eligible Investors’’ means 

persons who at the time of investment 

are (a) partners of the Company and 

senior administrative employees of the 

Company (‘‘Eligible Employees’’), (b) 

the immediate family members of 

Eligible Employees, which are parents, 

children, grandchildren, spouses or 

spousal equivalents of children, spouses 

or spousal equivalents, and siblings, 

including step or adoptive relationships 

(‘‘Eligible Family Members’’), and (c) 

trusts or other entities or arrangements 

the sole beneficiaries of which consist of 

Eligible Employees or their Eligible 

Family Members, or the settlors and the 

trustees of which consist of Eligible 

Employees or Eligible Employees 

together with Eligible Family Members 

(‘‘Eligible Trusts’’).1 To qualify as an 

Eligible Investor with respect to an 

Investment Fund, each such person 

must, if purchasing an Interest from an 

Investment Fund or from a Member, be 

an Accredited Investor as that term is 

defined in Rule 501(a) of Regulation D 

of the Securities Act, or, in the case of 

Eligible Trusts, a trust, entity or 

arrangement for which an Eligible 

Employee, who is an Accredited 

Investor, is a settlor and principal 

investment decision maker. The 

Company will be an Accredited 

Investor. Prior to offering Interests to an 

Eligible Employee or Eligible Family 

Member, the Investment Committee (as 

defined below) must reasonably believe 

that the Eligible Employee or Eligible 

Family Member is a sophisticated 

investor capable of understanding and 

evaluating the risks of participating in 

the Investment Fund without the benefit 

of regulatory safeguards. The Investment 

Committee may impose more restrictive 

standards for Eligible Investors in its 

discretion. The beneficial owners of an 

Eligible Trust will be persons eligible to 

hold interests in employees’ securities 

companies as defined in section 2(a)(13) 

of the Act. 

5. Each Investment Fund will be 

managed and administered by an 

investment committee (‘‘Investment 

Committee’’). The Investment 

Committee will be comprised of not less 

than three partners of the Company who 

are appointed to the Investment 

Committee by the Company’s 

management committee. All investment 

decisions on behalf of an Investment 

Fund (including with respect to any 

series thereof) will be made by the 

Investment Committee. 

6. An Investment Fund may have an 

administrator (‘‘Administrator’’). The 

Administrator may be an employee of 

the Company or the Investment 

Committee may determine to engage a 

third party to act as Administrator for an 

Investment Fund. The Administrator 

will in no event be a Member or 

otherwise hold any other security of an 

Investment Fund unless qualified as an 

Eligible Investor. The Administrator 

will not recommend Investments or 

exercise investment discretion. The only 

functions of the Administrator will be 

ministerial. 

7. The specific investment objectives 

and strategies for an Investment Fund 

will be set forth in an informative 

memorandum relating to the Interests 

being offered and in the relevant 

Investment Fund Agreement, and each 

Eligible Investor will receive a copy of 

the informative memorandum and 

Investment Fund Agreement before 

making an investment in an Investment 

Fund. The terms of an Investment Fund 

will be disclosed to each Eligible 

Investor at the time the investor is 

invited to participate in that Investment 

Fund. 

8. The value of the Members’ capital 

accounts will be determined at such 

times as the Investment Committee 

deems appropriate or necessary; 

however, such valuation will be done at 

least annually at the Investment Fund’s 

fiscal year-end. The Investment 

Committee will value the assets held by 

an Investment Fund at the current 

market price (closing price) in the case 

of marketable securities. All other 

securities and assets will be valued by 

the Investment Committee in good faith 

at fair value. 

9. Each Investment Fund will 

generally bear its own expenses. The 

Company may be reimbursed by an 

Investment Fund for reasonable and 

necessary out of pocket costs directly 

associated with the organization and 

operation of the Investment Fund, 

including administrative expenses and 

overhead expenses. No Investment Fund 

will be charged legal fees by the 

Company. There will be no allocation of 

any of the Company’s operating 

expenses to the Investment Funds other 

than those specifically related to the 

provision of administrative services by 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85775 

2The following circumstances, among others, 

could warrant the withdrawal of a Member or sale 

of a Member’s Interests to another Eligible Investor: 

If a Member who is an Eligible Employee ceases to 

be a partner or senior administrative employee of 

the Company; an Eligible Family Member’s or 

Eligible Trust’s related Eligible Employee ceases to 

be a partner or senior administrative employee of 

the Company; a Member defaults on his or her 

obligations to the Investment Fund; adverse tax 

consequences were to inure to the Investment Fund 

or a Member were that Member to remain a 

Member; or a situation in which the continued 

membership of the Member would violate 

applicable law or regulations. 

3This excludes indebtedness incurred 

specifically on behalf of a Member where the 

Member has agreed to guarantee the loan or to act 

as co-obligor on the loan. 

the Company to the Investment Funds 

and disclosed to Eligible Investors. 

Some of the investment opportunities 

available to an Investment Fund may 

involve parties for which the Company 

was, is or will be retained to act as legal 

counsel, and the Company may be paid 

by such parties or their affiliates for 

legal services and for related 

disbursements and charges. These 

amounts paid to the Company will not 

be paid by an Investment Fund itself but 

by the entities in which an Investment 

Fund invests or their affiliates. No 

management fee or other compensation 

will be paid by an Investment Fund or 

the Members to the Investment 

Committee or any member of the 

Investment Committee. Also, no fee of 

any kind will be charged in connection 

with the sale of Interests in an 

Investment Fund. 

10. Within 120 days after the end of 

each fiscal year, or as soon as 

practicable thereafter, each Investment 

Fund will send its Members an annual 

report regarding its operations. The 

annual report of an Investment Fund 

will contain financial statements 

audited by an independent accounting 

firm. For purposes of this requirement, 

‘‘audit’’ has the meaning defined in rule 

1–02(d) of Regulation S–X. An 

Investment Fund will maintain a file 

containing any financial statements and 

other information received from the 

issuers of the Investments held by the 

Investment Fund and will make such 

file available for inspection by its 

Members in accordance with its 

Investment Fund Agreement. An 

Investment Fund, within 90 days after 

the end of the fiscal year of such 

Investment Fund, or as soon as 

practicable thereafter, will transmit a 

report to each Member setting out 

information with respect to that 

Member’s distributive share of income 

gains, losses, credits and other items for 

federal income tax purposes resulting 

from the operation of the Investment 

Fund during that year. 

11. Members will not be entitled to 

redeem their respective Interests in an 

Investment Fund. A Member will be 

permitted to transfer his or her Interest 

only with the express consent of the 

Investment Committee, which consent 

may be given or withheld in the 

Investment Committee’s sole and 

absolute discretion, and then only to an 

Eligible Investor. A Member will not be 

subject to removal except for good cause 

as determined by the Investment 

Committee or if the Investment 

Committee, in its discretion, deems 

such withdrawal to be in the best 

interest of the Investment Fund. The 

Interests of a Member who is no longer 

eligible to own interests in an 

employees’ securities company as 

defined in section 2(a)(13) of the Act 

will be repurchased, subject to the 

minimum payment provisions described 

below. The Investment Committee does 

not currently intend to require any 

Member to withdraw.2 Upon 

withdrawal or sale of a Member’s 

Interest, the Investment Fund or 

purchaser will at a minimum pay to the 

Member the lesser of (a) the amount of 

such Member’s drawn Capital 

Commitment (defined below) plus 

interest (calculated at a rate determined 

by the Investment Committee to be 

reasonably comparable to interest 

earned by the Investment Fund on 

temporary investments) less prior 

distributions, or (b) the fair market value 

of the Interest as determined at the time 

of such withdrawal or sale in good faith 

by the Investment Committee. If a 

Member that is a Eligible Employee 

ceases to be a partner or senior 

administrative employee of the 

Company, such Member and related 

Eligible Investors will continue to be 

Members of an Investment Fund 

although with the consent of the 

Investment Committee, such Member 

and related Eligible Investors may be 

permitted to assign all or a portion of 

such Member’s Interest to other Eligible 

Investors. 

12. Each Member of an Investment 

Fund will make a separate capital 

commitment to the Investment Fund 

(‘‘Capital Commitment’’) relating to each 

Investment Fund in which such 

Member is participating. To provide 

flexibility in connection with an 

Investment Fund’s obligation to 

contribute capital to fund an Investment 

of an Investment Fund and to meet the 

expenses with respect to that 

Investment Fund, the Investment Fund 

Agreements may provide that the 

Investment Fund may engage in 

borrowings in connection with such 

funding of Investments. Any borrowings 

by an Investment Fund with respect to 

the funding of Investments will be nonrecourse to the Members 3 but may be 

secured by a pledge of the Members’ 

respective capital accounts and 

unfunded Capital Commitments. An 

Investment Fund will not borrow from 

any person if the borrowing would 

cause any person not named in section 

2(a)(13) of the Act to own any 

outstanding securities of an Investment 

Fund (other than short-term paper). If 

the Company makes a loan to an 

Investment Fund, the Company (as 

lender) will be entitled to receive 

interest, provided that the rate will be 

no less favorable to the borrower than 

the rate obtainable on an arm’s length 

basis. An Investment Fund will not lend 

any funds to the Company. If the 

Company extends a loan to an Eligible 

Investor in respect of any Investment 

Fund, the loan will be made at an 

interest rate no less favorable than that 

which could be obtained on an arm’s 

length basis. Loans will not be extended 

or arranged if otherwise prohibited by 

law, including the Sarbanes-Oxley Act 

of 2002. 

13. The Investment Funds will not 

acquire any security issued by a 

registered investment company if 

immediately after the acquisition the 

Investment Fund would own more than 

3% of the total outstanding voting stock 

of the registered investment company. 

Applicants’ Legal Analysis 

1. Section 6(b) of the Act provides, in 

part, that the Commission will exempt 

employees’ securities companies from 

the provisions of the Act to the extent 

that the exemption is consistent with 

the protection of investors. Section 6(b) 

provides that the Commission will 

consider, in determining the provisions 

of the Act from which the company 

should be exempt, the company’s form 

of organization and capital structure, the 

persons owning and controlling the 

company’s securities, the price of the 

company’s securities and the amount of 

any sales load, the disposition of the 

proceeds of any sales of the company’s 

securities, how the company’s funds are 

invested, and the relationship between 

the company and the issuers of the 

securities in which it invests. Section 

2(a)(13) defines an employees’ securities 

company as any investment company 

all of whose securities (other than shortterm paper) are beneficially owned (a) 

by current or former employees, or 

persons on retainer, of one or more 

affiliated employers, (b) by immediate 

family members of such persons, or (c) 

by such employer or employers together 

with any of the persons in (a) or (b). 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
85776 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

2. Section 7 of the Act generally 

prohibits investment companies that are 

not registered under section 8 of the Act 

from selling or redeeming their 

securities. Section 6(e) of the Act 

provides that, in connection with any 

order exempting an investment 

company from any provision of section 

7, certain provisions of the Act, as 

specified by the Commission, will be 

applicable to the company and other 

persons dealing with the company as 

though the company were registered 

under the Act. Applicants request an 

order under sections 6(b) and 6(e) of the 

Act exempting applicants from all 

provisions of the Act, except sections 9, 

17, 30, 36 through 53, and the Rules and 

Regulations. With respect to sections 

17(a), (d), (f), (g) and (j) and 30(a), (b), 

(e) and (h) of the Act and the Rules and 

Regulations, and rule 38a–1 under the 

Act, applicants request a limited 

exemption as set forth in the 

application. 

3. Section 17(a) of the Act generally 

prohibits any affiliated person of a 

registered investment company, or any 

affiliated person of an affiliated person, 

acting as principal, from knowingly 

selling or purchasing any security or 

other property to or from the company. 

Applicants request an exemption from 

section 17(a) to permit an Investment 

Fund to invest in or participate as a 

selling security-holder in a principal 

transaction with one or more affiliated 

persons (as defined in section 2(a)(3) of 

the Act) of an Investment Fund (‘‘FirstTier Affiliates’’) and affiliated persons of 

such First-Tier Affiliates (‘‘Second-Tier 

Affiliates,’’ and together with First-Tier 

Affiliates, ‘‘Affiliates’’). 

4. Applicants submit that the 

exemptions sought from section 17(a) 

are consistent with the purposes of the 

Act and the protection of investors. 

Applicants state that the Members will 

be informed in an Investment Fund’s 

offering materials of the possible extent 

of the dealings by such Investment Fund 

and any portfolio company with the 

Company. Applicants also state that, as 

professionals sophisticated and 

experienced in business and financial 

matters, the Members will be able to 

evaluate the risks associated with those 

dealings. Applicants assert that the 

community of interest among the 

Investment Committee, the Members 

and the Company will serve to reduce 

the risk of abuse in transactions 

involving an Investment Fund and the 

Company. 

5. Section 17(d) of the Act and rule 

17d–1 under the Act prohibit any 

affiliated person of a registered 

investment company, or any affiliated 

person of such person, acting as 

principal, from participating in any joint 

arrangement with the registered 

investment company unless authorized 

by the Commission. Applicants request 

an exemption from section 17(d) and 

rule 17d–1 to the extent necessary to 

permit an Investment Fund to engage in 

transactions in which an Affiliate 

participates as a joint or a joint and 

several participant with such 

Investment Fund. 

6. Joint transactions in which an 

Investment Fund could participate 

might include the following: (a) A joint 

investment by one or more Investment 

Funds in a security in which the 

Company or another Investment Fund is 

a joint participant or plans to become a 

participant; (b) a joint investment by 

one or more Investment Funds in 

another Investment Fund; and (c) a joint 

investment by one or more Investment 

Funds in a security in which an Affiliate 

is an investor or plans to become an 

investor, including situations in which 

an Affiliate has a partnership or other 

interest in, or compensation 

arrangements with, such issuer, sponsor 

or offeror. 

7. Applicants assert that compliance 

with section 17(d) and rule 17d–1 

would cause an Investment Fund to 

forego investment opportunities simply 

because a Member, the Company or 

other Affiliates also had made, or is 

concurrently making, a similar 

investment. In addition, because 

attractive investment opportunities of 

the types considered by an Investment 

Fund often require that each participant 

make available funds in an amount that 

may be substantially greater than that 

available to the investor alone, there 

may be certain attractive opportunities 

of which an Investment Fund may be 

unable to take advantage except as a coparticipant with other persons, 

including Affiliates. Applicants believe 

that the flexibility to structure co- and 

joint investments in the manner 

described above will not involve abuses 

of the type section 17(d) and rule 17d– 

1 were designed to prevent. Applicants 

acknowledge that any transactions 

subject to section 17(d) and rule 17d–1 

for which exemptive relief has not been 

requested in the application would 

require specific approval by the 

Commission. 

8. Section 17(f) of the Act designates 

the entities that may act as investment 

company custodians, and rule 17f–2 

under the Act allows an investment 

company to act as self-custodian. 

Applicants request an exemption to 

permit the following exceptions from 

the requirements of rule 17f–2: (i) 

Compliance with paragraph (b) of the 

rule may be achieved through 

safekeeping in the locked files of the 

Company or a partner of the Company; 

(ii) for the purposes of the rule, (A) 

employees of the Company will be 

deemed employees of the Investment 

Funds, (B) officers and members of the 

Investment Committee will be deemed 

to be officers of such Investment Funds, 

and (C) the Investment Committee will 

be deemed to be the board of directors 

of such Investment Funds; and (iii) 

instead of the verification procedure 

under paragraph (f) of the rule, 

verification will be effected quarterly by 

two partners or employees, each of 

whom shall have sufficient knowledge, 

sophistication and experience in 

business matters to perform such 

examination. Applicants expect that 

most of the Investments will be 

evidenced by partnership agreements or 

similar documents. Such instruments 

are most suitably kept in the Company’s 

files, where they can be referred to as 

necessary. Applicants will comply with 

all other provisions of rule 17f–2. 

9. Section 17(g) and rule 17g–1 

generally require the bonding of officers 

and employees of a registered 

investment company who have access to 

its securities or funds. Rule 17g–1 

requires that a majority of directors who 

are not interested persons of a registered 

investment company (‘‘disinterested 

directors’’) take certain actions and give 

certain approvals relating to fidelity 

bonding. Applicants request an 

exemption from the requirement, 

contained in rule 17g–1, that a majority 

of the ‘‘directors’’ of the Investment 

Funds who are not ‘‘interested persons’’ 

of the respective Investment Funds (as 

defined in the Act) take certain actions 

and make certain approvals concerning 

bonding and request instead that such 

actions and approvals be taken by the 

Investment Committee, regardless of 

whether any of them is deemed to be an 

interested person of the Investment 

Funds. Each member of the Investment 

Committee will be an interested person 

of the Investment Funds. 

10. The Investment Funds request an 

exemption from the requirements of rule 

17g–1(g) and (h) relating to the filing of 

copies of fidelity bonds and related 

information with the Commission and 

relating to the provisions of notices to 

the board of directors. Applicants also 

request an exemption from the 

requirements of rule 17g–1(j)(3) that the 

Investment Funds have a majority of 

disinterested directors, that those 

disinterested directors select and 

nominate any other disinterested 

directors, and that any legal counsel for 

those disinterested directors be 

independent legal counsel. Applicants 

believe that the filing requirements of 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85777 

rule 17g–1 are burdensome and 

unnecessary as applied to the 

Investment Funds. The Investment 

Committee will maintain the materials 

otherwise required to be filed with the 

Commission by rule 17g–1(g) and the 

applicants agree that all such material 

will be subject to examination by the 

Commission and its staff. The 

Investment Committee will designate a 

person to maintain the records 

otherwise required to be filed with the 

Commission under paragraph (g) of the 

rule. The Investment Funds will comply 

with all other requirements of rule 17g– 

1. The fidelity bond of the Investment 

Funds will cover the Investment 

Committee, and all employees of the 

Company who have access to the 

securities or funds of the Investment 

Funds. 

11. Applicants request an exemption 

from the requirements, contained in 

section 17(j) of the Act and rule 17j–1 

under the Act, that every registered 

investment company adopt a written 

code of ethics and every ‘‘access 

person’’ of such registered investment 

company report to the investment 

company with respect to transactions in 

any security in which such access 

person has, or by reason of the 

transaction acquires, any direct or 

indirect beneficial ownership. 

Applicants request an exemption from 

the requirements in rule 17j–1, with the 

exception of rule 17j–1(b), because they 

are burdensome and unnecessary as 

applied to an Investment Funds and 

because the exemption is consistent 

with the policy of the Act. Requiring the 

Investment Funds to adopt a written 

code of ethics and requiring access 

persons to report each of their securities 

transactions would be time-consuming 

and expensive and would serve little 

purpose in light of, among other things, 

the community of interest among the 

Members of the Investment Funds by 

virtue of their common association with 

the Company. Accordingly, the 

requested exemption is consistent with 

the purposes of the Act because the 

dangers against which section 17(j) and 

rule 17j–1 are intended to guard are not 

present in the case of the Investment 

Funds. 

12. Applicants request an exemption 

from the requirements in sections 30(a), 

30(b), and 30(e) of the Act, and the 

Rules and Regulations under those 

sections, that registered investment 

companies file with the Commission 

and mail to their shareholders certain 

periodic reports and financial 

statements. Applicants contend that the 

forms prescribed by the Commission for 

periodic reports have little relevance to 

an Investment Fund and would entail 

administrative and legal costs that 

outweigh any benefit to the Members. 

Applicants request exemptive relief to 

the extent necessary to permit an 

Investment Fund to report annually to 

their Members. Applicants also request 

an exemption from section 30(h) of the 

Act to the extent necessary to exempt 

the Investment Committee, any 10 

percent shareholder, and any other 

person who may be deemed to be an 

officer, director, member of an advisory 

board, or otherwise subject to section 

30(h), from filing Forms 3, 4 and 5 

under section 16 of the Exchange Act 

with respect to their ownership of 

Interests in the Investment Funds. 

Applicants assert that, because there is 

no trading market for Interests and the 

transfer of Interests is severely 

restricted, these filings are unnecessary 

for the protection of investors and 

burdensome to those required to make 

them. 

13. Rule 38a–1 requires investment 

companies to adopt, implement and 

periodically review written policies 

reasonably designed to prevent violation 

of the federal securities laws and to 

appoint a chief compliance officer. Each 

Investment Fund will comply with rule 

38a–1(a), (c) and (d), except that (i) the 

members of the Investment Committee 

will fulfill the responsibilities assigned 

to the Investment Fund’s board of 

directors under the rule, and (ii) because 

all members of the Investment 

Committee would be considered 

interested persons of the Investment 

Funds, approval by a majority of the 

disinterested board members required 

by rule 38a–1 will not be obtained. In 

addition, the Investment Funds will 

comply with the requirement in rule 

38a–1(a)(4)(iv) that the chief compliance 

officer meet with the disinterested 

directors by having the chief 

compliance officer meet with the 

members of the Investment Committee. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the following conditions: 

1. Each proposed transaction, to 

which an Investment Fund is a party, 

otherwise prohibited by section 17(a) or 

section 17(d) and rule 17d–1 (the 

‘‘Section 17 Transactions’’) will be 

effected only if the Investment 

Committee determines that: (a) The 

terms of the Section 17 Transaction, 

including the consideration to be paid 

or received, are fair and reasonable to 

Members of the Investment Fund and do 

not involve overreaching of the 

Investment Fund or its Members on the 

part of any person concerned; and (b) 

the Section 17 Transaction is consistent 

with the interests of the Members of the 

Investment Fund, the Investment Fund’s 

organizational documents and the 

Investment Fund’s reports to its 

Members. 

In addition, the Investment 

Committee will record and preserve a 

description of such Section 17 

Transactions, the findings of the 

Investment Committee, the information 

or materials upon which their findings 

are based and the basis therefor. All 

such records will be maintained for the 

life of the Investment Fund and at least 

six years thereafter and will be subject 

to examination by the Commission and 

its staff. All such records will be 

maintained in an easily accessible place 

for at least the first two years. 

2. If purchases or sales are made by 

an Investment Fund from or to an entity 

affiliated with the Investment Fund by 

reason of a member of the Investment 

Committee (a) serving as an officer, 

director, general partner or investment 

adviser of the entity, or (b) having a 5% 

or more investment in the entity, such 

individual will not participate in the 

Investment Fund’s determination of 

whether or not to effect the purchase or 

sale. 

3. The Investment Committee will 

adopt, and periodically review and 

update, procedures designed to ensure 

that reasonable inquiry is made, prior to 

the consummation of any Section 17 

Transaction, with respect to the possible 

involvement in the transaction of any 

affiliated person or promoter of or 

principal underwriter for the Investment 

Fund, or any affiliated person of such a 

person, promoter, or principal 

underwriter. 

4. The Investment Committee will not 

purchase for an Investment Fund any 

Investment in which a Co-Investor, as 

defined below, has or proposes to 

acquire the same class of securities of 

the same issuer, where the investment 

involves a joint enterprise or other joint 

arrangement within the meaning of rule 

17d–1 in which the Investment Fund 

and the Co-Investor are participants, 

unless any such Co-Investor, prior to 

disposing of all or part of its investment: 

(a) Gives the Investment Fund holding 

such investment sufficient, but not less 

than one day’s notice of its intent to 

dispose of its investment, and (b) 

refrains from disposing of its investment 

unless the Investment Fund holding 

such investment has the opportunity to 

dispose of its investment prior to or 

concurrently with, on the same terms as, 

and on a pro rata basis with the CoInvestor. The term ‘‘Co-Investor’’ with 

respect to an Investment Fund means 

any person who is: (a) An affiliated 

person of the Investment Fund; (b) the 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
85778 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

1 15 U.S.C. 78s(a)(3). 

2See letter from Thomas G. McCabe, Chief 

Regulatory Officer, OneChicago, to Vanessa 

Countryman, Secretary, Commission, dated 

September 21, 2020 (‘‘McCabe Letter’’). 

3See McCabe Letter, supra note 2, at 1. 

4See id. 

5See id. 

Company; (c) a current partner, lawyer 

employed by or key administrative 

employee of the Company; (d) an entity 

in which the Company or a member of 

the Investment Committee acts as an 

officer, director, or general partner, or 

has a similar capacity to control the sale 

or disposition of the entity’s securities; 

or (e) an investment vehicle offered, 

sponsored, or managed by the Company 

or an affiliated person of the Company. 

The restrictions contained in this 

condition, however, shall not be 

deemed to limit or prevent the 

disposition of an investment by a CoInvestor: (a) To its direct or indirect 

wholly-owned subsidiary, to any 

company (a ‘‘Parent’’) of which the CoInvestor is a direct or indirect whollyowned subsidiary, or to a direct or 

indirect wholly-owned subsidiary of its 

Parent; (b) to immediate family 

members of the Co-Investor or a trust 

established for the benefit of any such 

family member; (c) when the investment 

is comprised of securities that are listed 

on a national securities exchange 

registered under section 6 of the 

Exchange Act; (d) when the investment 

is comprised of securities that are 

national market system (‘‘NMS’’) stocks 

pursuant to section 11A(a)(2) of the 

Exchange Act and rule 600(a) of 

Regulation NMS thereunder; (e) when 

the investment is comprised of 

securities that are listed on or traded on 

any foreign securities exchange or board 

of trade that satisfies regulatory 

requirements under the law of the 

jurisdiction in which such foreign 

securities exchange or board of trade is 

organized similar to those that apply to 

a national securities exchange or a 

national market system of securities; or 

(f) when the investment is comprised of 

securities that are government securities 

as defined in section 2(a)(16) of the Act. 

5. An Investment Fund will send, 

within 120 days after the end of its 

fiscal year, or as soon as practicable 

thereafter, to each Member who had an 

interest in the Investment Fund at any 

time during the fiscal year then ended, 

reports and information regarding the 

Investments, including financial 

statements for such Investment Fund 

audited by an independent accounting 

firm. The Investment Committee will 

make a valuation or have a valuation 

made of all of the assets of an 

Investment Fund as of each fiscal year 

end. In addition, within 90 days after 

the end of each fiscal year of the 

Investment Fund, or as soon as 

practicable thereafter, the Investment 

Fund shall send a report to each person 

who was a Member at any time during 

the fiscal year then ended setting forth 

such tax information as shall be 

necessary for the preparation by the 

Member of his or her federal and state 

income tax returns and a report of the 

investment activities of the Investment 

Fund during such year. 

6. An Investment Fund will maintain 

and preserve, for the life of the 

Investment Fund and at least six years 

thereafter, such accounts, books, and 

other documents as constitute the 

record forming the basis for the audited 

financial statements and annual reports 

of the Investment Fund to be provided 

to its Members, and agrees that all such 

records will be subject to examination 

by the Commission and its staff. All 

such records will be maintained in an 

easily accessible place for at least the 

first two years. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28642 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90764; File No. 10–133] 

Self-Regulatory Organizations; 

OneChicago, LLC; Notice of Filing and 

Request for Comment on OneChicago, 

LLC’s Notice of Withdrawal of 

Registration as a National Securities 

Exchange Solely for the Purposes of 

Trading Security Futures Products 

December 21, 2020. 

I. Introduction 

Notice is hereby given that on 

September 21, 2020, OneChicago, LLC 

(‘‘OneChicago’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) notice of 

withdrawal of its registration as a 

national securities exchange solely for 

the purposes of trading security futures 

products, effective September 30, 2020, 

pursuant to Section 19(a)(3) of the 

Securities Exchange Act of 1934.1

OneChicago ceased trading operations 

as of September 18, 2020. The Exchange 

has closed its trading facility and all 

positions have been closed out as of that 

date.2

II. Description 

Prior to September 18, 2020, 

OneChicago operated as a national 

securities exchange solely for the 

purposes of trading security futures 

products, pursuant to 15 U.S.C. 78f(g).3

On August 13, 2020, OneChicago 

released Notice to Members 2020–07, 

which announced that its controlling 

ownership, after a strategic review, 

determined to close the Exchange with 

the last day of trading to be September 

18, 2020. OneChicago stated that it 

notified all impacted customers. The 

Exchange also stated that in order to 

maintain an orderly market through the 

closing process, pursuant to Exchange 

Rule 421 (Emergencies), on September 

4, 2020, the Exchange announced that 

the December 18, 2020 expiration and 

the March 19, 2021 expirations would 

be accelerated to September 18, 2020. 

The Exchange represented that as of 

September 21, 2020, it has closed its 

trading facility and all positions have 

been closed out.4

Pursuant to 15 U.S.C. 78s(a)(3), 

OneChicago filed with the Commission 

a notice of withdrawal from registration 

as a national securities exchange solely 

for the purposes of trading security 

futures products, effective September 

30, 2020. The Exchange stated that, 

pursuant to 7 U.S.C. 11, it also 

requested that, effective December 21, 

2020, the Commodity Futures Trading 

Commission (‘‘CFTC’’) vacate 

OneChicago’s registration as a 

designated contract market.5 Pursuant to 

15 U.S.C. 78f(g)(2)(C), the Exchange’s 

registration as a national securities 

exchange solely for the purposes of 

trading security futures products would 

terminate when the CFTC’s vacation 

order is effective, as OneChicago will no 

longer meet the condition of being 

designated by the CFTC as a contract 

market. Nonetheless, OneChicago filed a 

notice of withdrawal to take affirmative 

action to withdraw its registration, 

effective September 30, 2020. 

Subsequent to the submission of the 

notice of withdrawal, the Exchange has 

represented to the Commission that it 

will maintain, for a period of 5 years 

from the effective date of the 

withdrawal of OneChicago’s registration 

as a national securities exchange solely 

for the purposes of trading security 

futures products, all documents, books, 

and records, including correspondence, 

memoranda, papers, notices, accounts 

and other records (collectively 

‘‘records’’) made or received by it in 

connection with proposed rule changes 

filed with the Commission or in 

connection with its operations as a 

national securities exchange as required 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES