52368 Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Notices 

1Section 2(a)(48) defines a BDC to be any closedend investment company that operates for the 

purpose of making investments in securities 

described in section 55(a)(1) through 55(a)(3) of the 

Act and makes available significant managerial 

assistance with respect to the issuers of such 

securities. 

2All existing entities that currently intend to rely 

on the order are named as applicants. Any other 

existing or future entity that may rely on the order 

in the future will comply with the terms and 

condition of the order. 

Web site by searching for the file 

number, or an applicant using the 

Company name box, at http:// 

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Applicants’ Representations 

1. The Company, a Delaware 

corporation, is an externally managed, 

non-diversified, closed-end 

management investment company that 

has elected to be regulated as a business 

development company (‘‘BDC’’) under 

the Act.1 The Company seeks to 

maximize the total return to its 

stockholders through both current 

income and capital appreciation 

through debt and minority equity 

investments. The Investment Adviser, a 

Delaware limited liability company, is 

the investment adviser to the Company. 

The Investment Adviser is registered 

under the Investment Advisers Act of 

1940. 

2. Golub SBIC, a Delaware limited 

partnership, is a small business 

investment company (‘‘SBIC’’) licensed 

by the Small Business Administration 

(‘‘SBA’’) to operate under the Small 

Business Investment Act of 1958 

(‘‘SBIA’’). Golub SBIC is excluded from 

the definition of investment company 

by section 3(c)(7) of the Act. The 

Company directly owns 99% of Golub 

SBIC in the form of a limited partner 

interest. The General Partner owns 1% 

of Golub SBIC in the form of a general 

partner interest. The GP Managing 

Member, a Delaware corporation, is a 

wholly-owned subsidiary of the 

Company and serves as the managing 

member of the General Partner. The GP 

Managing Member and the Company are 

the sole members of the General Partner. 

Applicants’ Legal Analysis 

1. The Company requests an 

exemption pursuant to section 6(c) of 

the Act from the provisions of sections 

18(a) and 61(a) of the Act to permit it 

to adhere to a modified asset coverage 

requirement with respect to any direct 

or indirect wholly owned subsidiary of 

the Company that is licensed by the 

SBA to operate under the SBIA as a 

SBIC and relies on Section 3(c)(7) for an 

exemption from the definition of 

‘‘investment company’’ under the 1940 

Act (each, a ‘‘SBIC Subsidiary’’).2

Applicants state that companies 

operating under the SBIA, such as the 

SBIC Subsidiary, will be subject to the 

SBA’s substantial regulation of 

permissible leverage in their capital 

structure. 

2. Section 18(a) of the Act prohibits a 

registered closed-end investment 

company from issuing any class of 

senior security or selling any such 

security of which it is the issuer unless 

the company complies with the asset 

coverage requirements set forth in that 

section. Section 61(a) of the Act makes 

section 18 applicable to BDCs, with 

certain modifications. Section 18(k) 

exempts an investment company 

operating as an SBIC from the asset 

coverage requirements for senior 

securities representing indebtedness 

that are contained in section 18(a)(1)(A) 

and (B). 

3. Applicants state that the Company 

may be required to comply with the 

asset coverage requirements of section 

18(a) (as modified by section 61(a)) on 

a consolidated basis because the 

Company may be deemed to be an 

indirect issuer of any class of senior 

security issued by Golub SBIC or 

another SBIC Subsidiary. Applicants 

state that applying section 18(a) (as 

modified by section 61(a)) on a 

consolidated basis generally would 

require that the Company treat as its 

own all assets and any liabilities held 

directly either by itself, by Golub SBIC, 

or by another SBIC Subsidiary. 

Accordingly, the Company requests an 

order under section 6(c) of the Act 

exempting the Company from the 

provisions of section 18(a) (as modified 

by section 61(a)), such that senior 

securities issued by each SBIC 

Subsidiary that would be excluded from 

the SBIC Subsidiary’s asset coverage 

ratio by section 18(k) if it were itself a 

BDC would also be excluded from the 

Company’s consolidated asset coverage 

ratio. 

4. Section 6(c) of the Act, in relevant 

part, permits the Commission to exempt 

any transaction or class of transactions 

from any provision of the Act if and to 

the extent that such exemption is 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. Applicants state 

that the requested relief satisfies the 

section 6(c) standard. Applicants 

contend that, because the SBIC 

Subsidiary would be entitled to rely on 

section 18(k) if it were a BDC itself, 

there is no policy reason to deny the 

benefit of that exemption to the 

Company. 

Applicants’ Condition 

Applicants agree that any order 

granting the requested relief will be 

subject to the following condition: 

The Company shall not issue or sell 

any senior security, and the Company 

shall not cause or permit Golub SBIC or 

any other SBIC Subsidiary to issue or 

sell any senior security of which the 

Company, Golub SBIC or any other SBIC 

Subsidiary is the issuer except to the 

extent permitted by section 18 (as 

modified for BDCs by section 61) of the 

Act; provided that, immediately after 

the issuance or sale by any of the 

Company, Golub SBIC or any other SBIC 

Subsidiary of any such senior security, 

the Company, individually and on a 

consolidated basis, shall have the asset 

coverage required by section 18(a) of the 

Act (as modified by section 61(a)). In 

determining whether the Company has 

the asset coverage on a consolidated 

basis required by section 18(a) of the 

Act (as modified by section 61(a)), any 

senior securities representing 

indebtedness of Golub SBIC or another 

SBIC Subsidiary shall not be considered 

senior securities and, for purposes of the 

definition of ‘‘asset coverage’’ in section 

18(h), shall be treated as indebtedness 

not represented by senior securities. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21322 Filed 8–19–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold an Open Meeting 

on August 24, 2011 at 10 a.m., in the 

Auditorium, Room L–002, to hear oral 

argument in an appeal by Eric J. Brown, 

Matthew J. Collins, Kevin J. Walsh, and 

Mark W. Wells (collectively, 

‘‘Respondents’’) and a cross-appeal by 

the Division of Enforcement from an 

initial decision of an administrative law 

judge. 

Brown and Walsh were formerly 

associated with registered broker-dealer 

Prime Capital Services, Inc. (‘‘Prime 

Capital’’), and Collins and Wells are 

currently associated with Prime Capital. 


jlentini on DSK4TPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Notices 52369 

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

2 17 CFR 240.19b–4. 

3The Penny Pilot was established in March 2008 

and in October 2009 was expanded and extended 

through December 31, 2010. See Securities 

Exchange Act Release Nos. 57579 (March 28, 2008), 

73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008– 

026) (notice of filing and immediate effectiveness 

establishing Penny Pilot); 60874 (October 23, 2009), 

74 FR 56682 (November 2, 2009) (SR–NASDAQ– 

2009–091) (notice of filing and immediate 

effectiveness expanding and extending Penny 

Pilot); 60965 (November 9, 2009), 74 FR 59292 

(November 17, 2009) (SR–NASDAQ–2009–097) 

(notice of filing and immediate effectiveness adding 

seventy-five classes to Penny Pilot); 61455 

(February 1, 2010), 75 FR 6239 (February 8, 2010) 

(SR–NASDAQ–2010–013) (notice of filing and 

immediate effectiveness adding seventy-five classes 

to Penny Pilot); and 62029 (May 4, 2010), 75 FR 

25895 (May 10, 2010) (SR–NASDAQ–2010–053) 

(notice of filing and immediate effectiveness adding 

seventy-five classes to Penny Pilot). See also 

Exchange Rule Chapter VI, Section 5. 

The law judge found that, in sales of 

variable annuities to elderly customers, 

Respondents violated Section 17(a) of 

the Securities Act of 1933, Section 10(b) 

of the Securities Exchange Act of 1934, 

and Exchange Act Rule 10b–5, and 

Exchange Act Section 17(a) and 

Exchange Act Rule 17a–3. The law 

judge also found that Collins failed to 

reasonably supervise Brown within the 

meaning of Exchange Act Sections 

15(b)(4)(E) and 15(b)(6). For these 

violations, the law judge issued ceaseand-desist orders against Respondents, 

ordered Respondents to disgorge 

commissions earned from selling certain 

variable annuities, barred Respondents 

from associating with a broker, dealer, 

or investment adviser, and imposed a 

third-tier civil monetary penalty of 

$130,000 against each Respondent. 

Issues likely to be considered at oral 

argument include whether Respondents 

violated the above provisions and, if so, 

the extent to which, under the 

circumstances, sanctions are warranted. 

For further information, please 

contact the Office of the Secretary at 

(202) 551–5400. 

Dated: August 17, 2011. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21463 Filed 8–18–11; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65138; File No. SR– 

NASDAQ–2011–112] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Customer Rebates in Penny Pilot 

Options 

August 15, 2011. 

Pursuant to 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 August 5, 

2011, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the 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 proposes to modify 

Exchange Rule 7050 governing pricing 

for NASDAQ members using the 

NASDAQ Options Market (‘‘NOM’’), 

NASDAQ’s facility for executing and 

routing standardized equity and index 

options. Specifically, NOM proposes to 

modify pricing for the Penny Pilot 3

Options (‘‘Penny Options’’) with respect 

to the Customer Rebate to Add 

Liquidity. 

The text of the proposed rule change 

is set forth below. Proposed new text is 

in italics and deleted text is in 

[brackets]. 

* * * * * 

7050. NASDAQ Options Market 

The following charges shall apply to the 

use of the order execution and routing 

services of the NASDAQ Options Market for 

all securities. 

(1) Fees for Execution of Contracts on the 

NASDAQ Options Market 

FEES AND REBATES

[per executed contract] 

Customer Professional Firm Non-NOM 

market maker 

NOM market 

maker 

Penny Pilot Options: 

Rebate to Add Liquidity ................................................ ◊ [$0.36 ] $0.29 $0.10 $0.25 $0.30 

Fee for Removing Liquidity ........................................... $0.45 $0.45 $0.45 $0.45 $0.45 

NDX and MNX: 

Rebate to Add Liquidity ................................................ $0.10 $0.10 $0.10 $0.10 $0.20 

Fee for Removing Liquidity ........................................... $0.50 $0.50 $0.50 $0.50 $0.40 

All Other Options: 

Fee for Adding Liquidity ................................................ $0.00 $0.20 $0.45 $0.45 $0.30 

Fee for Removing Liquidity ........................................... $0.45 $0.45 $0.45 $0.45 $0.45 

Rebate to Add Liquidity ....................................................... $0.20 $0.00 $0.00 $0.00 $0.00 

◊The Customer Rebate to Add Liquidity in 

Penny Pilot Options will be paid as follows: 

Monthly volume Rebate to add 

liquidity 

Tier 1 ............................................................................................................................................................ 0–499,999 $0.26 

Tier 2 ............................................................................................................................................................ 500,000–799,999 $0.32 

Tier 3 ............................................................................................................................................................ 800,000–1,199,999 $0.36 

Tier 4 ............................................................................................................................................................ 1,200,000 and up $0.38 


jlentini on DSK4TPTVN1PROD with NOTICES