32174 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices 

12 17 CFR 200.30–3(a)(12). 

1The Existing Affiliated Funds, together with 

their direct and indirect wholly-owned subsidiaries, 

are entities (i) (A) whose primary investment 

adviser is a GSO Adviser or (B) whose primary 

investment adviser is a registered investment 

adviser that controls, is controlled by or is under 

common control with an Adviser (as defined 

below), but is itself not an Adviser (each, an 

‘‘Existing Primary Adviser’’), and whose subadviser is an Adviser (each, an ‘‘Existing SubAdvised Affiliated Fund’’) and (ii) that either (A) 

would be an investment company but for section 

3(c)(1) or 3(c)(7) of the Act or (B) rely on the rule 

3a–7 exemption thereunder from investment 

company status. The sole Existing Primary Adviser 

is BAS. Each of the Existing Sub-Advised Affiliated 

Funds are sub-advised by GSO Capital Partners LP, 

a GSO Adviser. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NYSE–2018–31 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–NYSE–2018–31. 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, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

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–NYSE–2018–31 and should 

be submitted on or before August 1, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14850 Filed 7–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

33149; 812–14835] 

Blackstone/GSO Floating Rate 

Enhanced Income Fund, et al. 

July 6, 2018. 

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 business 

development companies (‘‘BDCs’’) and 

closed-end management investment 

companies to co-invest in portfolio 

companies with each other and with 

certain affiliated investment funds and 

accounts. 

APPLICANTS: Blackstone/GSO Floating 

Rate Enhanced Income Fund 

(‘‘BGFREI’’); Blackstone/GSO LongShort Credit Income Fund (‘‘BGX’’); 

Blackstone/GSO Senior Floating Rate 

Term Fund (‘‘BSL’’); Blackstone/GSO 

Strategic Credit Fund (‘‘BGB’’); 

Blackstone/GSO Secured Lending Fund 

(‘‘BGSL,’’ and together with BGFREI, 

BGX, BSL, BGB, the ‘‘GSO Regulated 

Funds’’); GSO/Blackstone Debt Funds 

Management LLC (‘‘GDFM’’), the 

investment adviser to BGFREI, BGX, 

BSL and BGB; GSO Asset Management 

LLC (‘‘GAM’’), the proposed investment 

adviser to BGSL; the investment 

advisers set forth in Schedule A to the 

application (together with GDFM and 

GAM, the ‘‘GSO Advisers’’); the Existing 

Affiliated Funds set forth on Schedule 

A to the application 1; and Blackstone 

Alternative Solutions L.L.C. (‘‘BAS’’). 

FILING DATES: The application was filed 

on October 13, 2017, and amended on 

June 25, 2018. Applicants have agreed 

to file an amendment during the notice 

period, the substance of which is 

reflected in this notice. 

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 writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on July 30, 2018, 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 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F St. 

NE, Washington, DC 20549–1090. 

Applicants: 345 Park Avenue, New 

York, New York 10154. 

FOR FURTHER INFORMATION CONTACT: 

Asen Parachkevov, Senior Counsel, or 

David J. Marcinkus, Branch Chief, at 

(202) 551–6821 (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:// 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices 32175 

2 ‘‘Board’’ means the board of trustees (or 

equivalent) of the GSO Regulated Funds and any 

other Regulated Fund (as defined below). 

‘‘Non-Interested Trustees’’ means the NonInterested Trustees of the GSO Regulated Funds and 

any other Regulated Fund who are not ‘‘interested 

persons’’ within the meaning of section 2(a)(19) of 

the Act. 

3Section 2(a)(48) defines a BDC to be any closedend investment company that operates for the 

purpose of making investments in securities 

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

Act and makes available significant managerial 

assistance with respect to the issuers of such 

securities. 

4The term ‘‘Adviser’’ means (i) the GSO Advisers 

and (ii) any future investment adviser that controls, 

is controlled by or is under common control with 

a GSO Adviser and is registered as an investment 

adviser under the Advisers Act that intends to 

participate in the Co-Investment Program (as 

defined below). The term Adviser does not include 

any Primary Adviser. The term ‘‘Primary Adviser’’ 

means the Existing Primary Adviser or any future 

investment adviser that (i) controls, is controlled by 

or is under common control with an Adviser, (ii) 

is registered as an investment adviser under the 

Advisers Act, and (iii) is not an Adviser. 

5 ‘‘Regulated Fund’’ means any of the GSO 

Regulated Funds and any future closed-end 

management investment company (i) that has 

elected to be regulated as a BDC or is registered 

under the Act, (ii) whose investment adviser is an 

Adviser and (iii) who intends to participate in the 

Co-Investment Program. 

6 ‘‘Affiliated Investor’’ means (i) the Existing 

Affiliated Funds, (ii) any Affiliated Proprietary 

Account and (iii) any Future Affiliated Fund. 

‘‘Future Affiliated Fund’’ means an entity (i)(A) 

whose investment adviser is an Adviser or (B) 

whose investment adviser is a Primary Adviser and 

whose sub-adviser is an Adviser, (ii) that either (A) 

would be an investment company but for an 

exemption in section 3(c)(1), 3(c)(5)(C) or 3(c)(7) of 

the Act or (B) relies on the rule 3a–7 exemption 

thereunder from investment company status, and 

(iii) that intends to participate in the Co-Investment 

Program. 

‘‘Affiliated Proprietary Account’’ means any 

account of an Adviser or its affiliates or any 

company that is an indirect, wholly- or majorityowned subsidiary of an Adviser or its affiliates, 

which, from time to time, may hold various 

financial assets in a principal capacity. For the 

avoidance of doubt, neither the Regulated Funds 

nor the Affiliated Investors shall be deemed to be 

Affiliated Proprietary Accounts for purposes of the 

requested Order. 

7All existing entities that currently intend to rely 

upon the requested Order have been named as 

applicants. Any other existing or future entity that 

subsequently relies on the Order will comply with 

the terms and conditions of the application. 

8 ‘‘Wholly-Owned Investment Subsidiary’’ means 

an (i) whose sole business purpose is to hold one 

or more investments on behalf of a Regulated Fund 

(and, in the case of an SBIC Subsidiary (as defined 

below), maintain a license under the SBA Act (as 

defined below) and issue debentures guaranteed by 

the SBA (as defined below)); (ii) that is whollyowned by a Regulated Fund (with such Regulated 

Fund at all times holding, beneficially and of 

record, 100% of the voting and economic interests); 

(iii) with respect to which the Board of the 

Regulated Fund has the sole authority to make all 

determinations with respect to the Wholly-Owned 

Investment Subsidiary’s participation under the 

conditions of the requested Order; and (iv) that is 

an entity that would be an investment company but 

for an exemption in section 3(c)(1) or 3(c)(7) of the 

Act. 

The term ‘‘SBIC Subsidiary’’ means a WhollyOwned Investment Subsidiary that is licensed by 

the Small Business Administration (the ‘‘SBA’’) to 

operate under the Small Business Investment Act of 

1958, as amended, (the ‘‘SBA Act’’) as a small 

business investment company (a ‘‘SBIC’’). 

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

calling (202) 551–8090. 

Applicants’ Representations 

1. BGFREI, BGX, BSL and BGB, each 

a Delaware statutory trust, are externally 

managed, diversified, closed-end 

management investment companies. 

Each of BGFREI’s and BGX’s investment 

objective is to provide current income, 

with a secondary objective of capital 

appreciation. Each of BSL’s and BGB’s 

investment objective is to seek high 

current income, with a secondary 

objective to seek preservation of capital, 

consistent with its primary goal of high 

current income. Each of BGFREI, BGX, 

BSL and BGB have a five-member 

Board, of which four members are NonInterested Trustees.2

2. BGSL is a Delaware statutory trust 

that intends to file an election to be 

regulated as a business development 

company (‘‘BDC’’) under the Act.3

BGSL’s investment objective is to seek 

high current income, with a secondary 

objective to seek preservation of capital, 

consistent with its primary goal of high 

current income. BGSL will have a 

seven-member Board, of which four 

members will be Non-Interested 

Trustees. 

3. Each Adviser 4 is a subsidiary of 

The Blackstone Group, L.P. 

(‘‘Blackstone’’). Blackstone is a leading 

global alternative asset manager, whose 

alternative asset management businesses 

include investment vehicles focused on 

private equity, real estate, hedge fund 

solutions, non-investment grade credit, 

secondary private equity funds of funds 

and multi-asset class strategies. 

Blackstone’s four business segments are 

(1) private equity, (2) real estate, (3) 

hedge fund solutions and (4) credit. 

4. The GSO Advisers operate as a selfcontained advisory business within 

Blackstone’s credit group. Each GSO 

Adviser is under common control with 

GDFM and GAM, the Adviser to each of 

the GSO Regulated Funds, and 

collectively they conduct a single 

advisory business for purposes of the 

requested Order. The GSO Advisers are 

each either separately registered as 

investment advisers with the 

Commission, or are relying advisers that 

rely on the registration of another GSO 

Adviser. No GSO Adviser is a relying 

adviser of any Blackstone-affiliated 

investment adviser from outside of the 

self-contained group. BAS is the sole 

Existing Primary Adviser and serves as 

investment adviser of the Existing SubAdvised Affiliated Funds. 

5. Applicants seek an order to permit 

one or more Regulated Funds 5 to be 

able to participate with one or more 

other Regulated Funds and/or one or 

more Affiliated Investors 6 in the same 

investment opportunities through a 

proposed co-investment program where 

such participation would otherwise be 

prohibited under sections 17(d) and 

57(a)(4) of the Act and rule 17d–1 

thereunder (the ‘‘Co-Investment 

Program’’). 

6. For purposes of the requested 

Order, ‘‘Co-Investment Transaction’’ 

means any transaction in which one or 

more Regulated Funds (or one or more 

Wholly-Owned Investment Subsidiaries, 

as defined below) participates together 

with one or more other Regulated Funds 

(or one or more Wholly-Owned 

Investment Subsidiaries, as defined 

below) and/or one or more Affiliated 

Investors in reliance on the requested 

Order. ‘‘Potential Co-Investment 

Transaction’’ means any investment 

opportunity in which a Regulated Fund 

(or its Wholly-Owned Investment 

Subsidiary, as defined below) could not 

participate together with one or more 

Affiliated Investors and/or one or more 

other Regulated Funds without 

obtaining and relying on the requested 

Order.7 Funds that are advised or subadvised by affiliates of Blackstone other 

than an Adviser or Primary Adviser will 

not participate in the Co-Investment 

Program. No Primary Adviser will be 

the source of any Potential CoInvestment Transactions under the 

requested Order. Potential CoInvestment Transactions will not be 

shared outside of the Co-Investment 

Program. 

7. Applicants state that a Regulated 

Fund may, from time to time, form a 

special purpose subsidiary (a ‘‘WhollyOwned Investment Subsidiary’’).8 A 

Wholly-Owned Investment Subsidiary 

would be prohibited from investing in a 

Co-Investment Transaction with another 

Regulated Fund or any Affiliated 

Investor because it would be a company 

controlled by its parent Regulated Fund 

for purposes of sections 17(d) and 

57(a)(4) of the Act and rule 17d–1 

thereunder. Applicants request that a 

Wholly-Owned Investment Subsidiary 

be permitted to participate in CoInvestment Transactions in lieu of the 

applicable Regulated Fund and that the 

Wholly-Owned Investment Subsidiary’s 

participation in any such transaction be 

treated, for purposes of the requested 


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9The term ‘‘Objectives and Strategies’’ means a 

Regulated Fund’s investment objectives and 

strategies, as described in the filings made with the 

Commission by the Regulated Fund under the 

Securities Exchange Act of 1934, as amended, the 

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

and the Act, and the Regulated Fund’s reports to 

shareholders. 

10The term ‘‘Board-Established Criteria’’ means 

criteria that the Board of the applicable Regulated 

Fund may establish from time to time to describe 

the characteristics of Potential Co-Investment 

Transactions regarding which an Adviser to the 

Regulated Fund should be notified under condition 

1 of the requested Order. The Board-Established 

Criteria will be consistent with the Regulated 

Fund’s then-current Objectives and Strategies. If no 

Board-Established Criteria are in effect, then the 

Regulated Fund’s Adviser will be notified of all 

Potential Co-Investment Transactions that fall 

within the Regulated Fund’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 earnings 

before interest, taxes, depreciation, and 

amortization of the issuer, asset class of the 

investment opportunity or required commitment 

size, and not on characteristics that involve 

discretionary assessment. The Adviser to the 

Regulated Fund may from time to time recommend 

criteria for the applicable Board’s consideration, but 

Board-Established Criteria will only become 

effective if approved by a majority of the NonInterested Trustees. The Non-Interested Trustees of 

a Regulated Fund 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 defined terms Eligible Trustees and 

Required Majority apply as if each Regulated Fund 

were a BDC subject to section 57(o) of the Act. 

12The term ‘‘Close Affiliate’’ means the Advisers, 

the Regulated Funds, the Affiliated Investors and 

any other person described in section 57(b) of the 

Act (after giving effect to rule 57b-1 thereunder) in 

respect of any Regulated Fund (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) of the Act. 

13The term ‘‘Remote Affiliate’’ means any person 

described in section 57(e) of the Act in respect of 

any Regulated Fund (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. 

Order, as though the parent Regulated 

Fund were participating directly. 

8. When considering Potential CoInvestment Transactions for any 

Regulated Fund, an Adviser will 

consider only the Objectives and 

Strategies,9 Board-Established Criteria,10

investment policies, investment 

positions, capital available for 

investment, and other pertinent factors 

applicable to that Regulated Fund. The 

participation of a Regulated Fund in a 

Potential Co-Investment Transaction 

may only be approved by a Required 

Majority, as defined in section 57(o) of 

the Act (a ‘‘Required Majority’’), of the 

trustees of the Board eligible to vote on 

that Co-Investment Transaction under 

section 57(o) of the Act (the ‘‘Eligible 

Trustees’’).11 When selecting 

investments for the Affiliated Investors, 

an Adviser will select investments 

separately for each Affiliated Investor, 

considering, in each case, only the 

investment objective, investment 

policies, investment position, capital 

available for investment, and other 

pertinent factors applicable to that 

particular Affiliated Investor. 

9. With respect to participation in a 

Potential Co-Investment Transaction by 

a Regulated Fund, the application 

Adviser will present each Potential CoInvestment Transaction and the 

proposed allocation of each investment 

opportunity to the Eligible Trustees. The 

Required Majority of a Regulated Fund 

will approve each Co-Investment 

Transaction prior to any investment by 

the Regulated Fund. 

10. Applicants state that the majority 

of the GSO Advisers’ employees work 

on matters for Close Affiliates 12 and 

information about potential investment 

opportunities is routinely disseminated 

among such Adviser’s employees. Other 

than to satisfy compliance obligations, 

information regarding Potential CoInvestment Transactions will not be 

shared with Remote Affiliates,13 which 

would include other investment 

advisers that operate in other Blackstone 

business groups, except in unusual 

circumstances, as the Blackstone 

business groups each generally target 

different investment strategies or asset 

classes and there are information barrier 

policies in place between the Blackstone 

business groups. Applicants further note 

within the GSO Advisers, the personnel 

overlap and coordination among 

portfolio management teams ensures 

that all relevant investment 

opportunities will be brought to the 

attention of each Regulated Fund (as 

defined below) managed by the 

respective Adviser. Applicants submit 

that the GSO Advisers will receive all 

information regarding all investment 

opportunities that fall within the thencurrent Objectives and Strategies and 

Board-Established Criteria of each 

Regulated Fund managed by the 

respective Adviser. 

11. Applicants submit that, in the 

event that a Potential Co-Investment 

Transaction would be within the 

investment objectives and strategies of 

the Existing Sub-Advised Affiliated 

Fund, the respective Adviser shall have 

the primary responsibility for the 

investment, including making the initial 

investment recommendation, and dayto-day monitoring of the investment. 

Applicants further note that the Adviser 

will be responsible for complying with 

the conditions of the requested Order. 

Applicants state that if the Adviser and 

Primary Adviser agree that the Existing 

Sub-Advised Affiliated Fund should 

invest in the Potential Co-Investment 

Transaction and at what size of 

investment, then the Adviser would, 

consistent with the conditions of the 

requested Order, determine an 

allocation for the Regulated Funds and 

Affiliated Investors, including such 

Existing Sub-Advised Affiliated Fund. 

12. Applicants acknowledge that 

some of the Affiliated Investors may not 

be funds advised by an Adviser because 

they are Affiliated Proprietary Accounts. 

Applicants do not believe the 

participation of these Affiliated 

Proprietary Accounts in Co-Investment 

Transactions should raise issues under 

the conditions of the requested Order 

because allocation policies and 

procedures of the account owners 

provide that investment opportunities 

are offered to client accounts before they 

are offered to Affiliated Proprietary 

Accounts. 

13. Under condition 14, 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 

Fund (‘‘Shares’’), then the Holders will 

vote such Shares as directed by an 

independent third party when voting on 

(1) the election of directors; (2) the 

removal of one or more directors; or (3) 

all other matters under either the Act or 

applicable state law affecting the 

Board’s composition, size or manner of 

election. 

14. No Non-Interested Trustee of a 

Regulated Fund will have a financial 

interest in any Co-Investment 

Transaction, other than indirectly 

through share ownership in one of the 

Regulated Funds. 

Applicants’ Legal Analysis 

1. Section 57(a)(4) of the Act prohibits 

certain affiliated persons of a BDC from 

participating in joint transactions with 

the BDC or a company controlled by a 

BDC in contravention of rules as 

prescribed by the Commission. Under 

section 57(b)(2) of the Act, any person 

who is directly or indirectly controlling, 

controlled by, or under common control 

with a BDC is subject to section 57(a)(4) 

of the Act. Section 57(i) of the Act 

provides that, until the Commission 

prescribes rules under section 57(a)(4) 

of the Act, the Commission’s rules 

under section 17(d) of the Act 

applicable to registered closed-end 

investment companies will be deemed 

to apply to transactions subject to 


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14No Primary Adviser will be the source of any 

Potential Co-Investment Transactions under the 

requested Order. 

15 ‘‘Available Capital’’ means (a) for each 

Regulated Entity, the amount of capital available for 

investment determined based on the amount of cash 

on hand, liquidity considerations, existing 

commitments and reserves, if any, the targeted 

leverage level, targeted asset mix, risk return and 

target-return profile, tax implications, regulatory or 

contractual restrictions or consequences and other 

investment policies and restrictions set from time 

to time by the Board of the applicable Regulated 

Entity or imposed by applicable laws, rules, 

regulations or interpretations, and (b) for each 

Affiliated Investor, the amount of capital available 

for investment determined based on the amount of 

cash on hand, liquidity considerations, existing 

commitments and reserves, if any, the targeted 

leverage level, targeted asset mix, risk return and 

target-return profile, tax implications, regulatory or 

contractual restrictions or consequences and other 

investment policies and restrictions set from time 

to time by the Affiliated Investors’ directors, general 

partners, or adviser or imposed by applicable laws, 

rules, regulations or interpretations. 

section 57(a)(4) of the Act. Because the 

Commission has not adopted any rules 

under section 57(a)(4) of the Act, rule 

17d–1 thereunder applies. 

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

17d–1 under the Act prohibit affiliated 

persons of a registered investment 

company from participating in joint 

transactions with the company unless 

the Commission has granted an order 

permitting such transactions. In passing 

upon applications under rule 17d–1, the 

Commission considers whether the 

company’s participation in the joint 

transaction 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. 

3. Applicants state that certain 

transactions effected as part of the CoInvestment Program may be prohibited 

by sections 17(d) and 57(a)(4) of the Act 

and rule 17d–1 thereunder without a 

prior exemptive order of the 

Commission to the extent that the 

Affiliated Investors fall within the 

category of persons described by section 

17(d) or section 57(b) of the Act, as 

modified by rule 57b–1 thereunder with 

respect to a Regulated Fund. Applicants 

believe that the proposed terms and 

conditions will ensure would ensure 

that the conflicts of interest that section 

17(d) and section 57(a)(4) of the Act 

were designed to prevent would be 

addressed and the standards for an 

order under rule 17d–1 under the Act 

are met. 

Applicants’ Conditions 

Applicants agree that any Order 

granting the requested relief shall be 

subject to the following conditions: 

1. (a) Each Adviser will establish, 

maintain and implement policies and 

procedures reasonably designed to 

ensure that each Adviser is promptly 

notified, for each Regulated Fund the 

Adviser manages, of all Potential CoInvestment Transactions 14 that (i) an 

Adviser considers for any other 

Regulated Fund or Affiliated Investor 

and (ii) fall within the Regulated Fund’s 

then-current Objectives and Strategies 

and Board-Established Criteria. 

(b) When an Adviser to a Regulated 

Fund is notified of a Potential CoInvestment Transaction under condition 

1(a), such Adviser will make an 

independent determination of the 

appropriateness of the investment for 

the Regulated Fund in light of the 

Regulated Fund’s then-current 

circumstances. 

2. (a) If the Adviser deems a Regulated 

Fund’s participation in any Potential 

Co-Investment Transaction to be 

appropriate for the Regulated Fund, it 

will then determine an appropriate level 

of investment for the Regulated Fund. 

(b) If the aggregate amount 

recommended by the applicable Adviser 

to be invested by the applicable 

Regulated Fund in the Potential CoInvestment Transaction, together with 

the amount proposed to be invested by 

the other participating Regulated Funds 

and Affiliated Investors, collectively, in 

the same transaction, exceeds the 

amount of the investment opportunity, 

then the investment opportunity will be 

allocated among them pro rata based on 

each participant’s Available Capital 

up 15 to the amount proposed to be 

invested by each. The applicable 

Adviser will provide the Eligible 

Trustees of each participating Regulated 

Fund with information concerning each 

participating party’s Available Capital to 

assist the Eligible Trustees with their 

review of the Regulated Fund’s 

investments for compliance with these 

allocation procedures. 

(c) After making the determinations 

required in conditions 1 and 2(a), the 

applicable Adviser will distribute 

written information concerning the 

Potential Co-Investment Transaction 

(including the amount proposed to be 

invested by each participating Regulated 

Fund and Affiliated Investor) to the 

Eligible Trustees of each participating 

Regulated Fund for their consideration. 

A Regulated Fund will co-invest with 

one or more other Regulated Funds and/ 

or one or more Affiliated Investors only 

if, prior to the Regulated Fund’s 

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 Fund and its 

shareholders and do not involve 

overreaching in respect of the Regulated 

Fund or its shareholders on the part of 

any person concerned; 

(ii) the Potential Co-Investment 

Transaction is consistent with: 

(A) the interests of the shareholders of 

the Regulated Fund; and 

(B) the Regulated Fund’s then-current 

Objectives and Strategies; 

(iii) the investment by any other 

Regulated Funds or Affiliated Investors 

would not disadvantage the Regulated 

Fund, and participation by the 

Regulated Fund would not be on a basis 

different from or less advantageous than 

that of other Regulated Funds or 

Affiliated Investors; provided that, if 

any other Regulated Fund or Affiliated 

Investor, but not the Regulated Fund 

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, such event shall not 

be interpreted to prohibit the Required 

Majority from reaching the conclusions 

required by this condition (2)(c)(iii), if: 

(A) The Eligible Trustees will have 

the right to ratify the selection of such 

director or board observer, if any; 

(B) the applicable Adviser agrees to, 

and does, provide periodic reports to 

the Regulated Fund’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 

(C) any fees or other compensation 

that any Affiliated Investor or any 

Regulated Fund or any affiliated person 

of any Affiliated Investor or any 

Regulated Fund receives in connection 

with the right of an Affiliated Investor 

or a Regulated Fund 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 each may, in 

turn, share its portion with its affiliated 

persons), and the participating 

Regulated Funds in accordance with the 

amount of each party’s investment; and 

(iv) the proposed investment by the 

Regulated Fund will not benefit the 

Advisers, the Affiliated Investors, the 

other Regulated Funds or any Primary 

Adviser or any affiliated person of any 


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32178 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices 

16This exception applies only to Follow-On 

Investments by a Regulated Fund in issuers in 

which that Regulated Fund already holds 

investments. 

17The term ‘‘Related Party’’ means (i) any Close 

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

any Adviser has knowledge, any Remote Affiliate. 

18Any Affiliated Proprietary Account that is not 

advised by an Adviser is itself deemed to be an 

Adviser for purposes of Conditions 7(a)(i) and 

8(a)(i). 

of them (other than the parties to the CoInvestment Transaction), except 

(A) to the extent permitted by 

condition 13; 

(B) to the extent permitted by section 

17(e) or 57(k) of the Act, as applicable; 

(C) indirectly, as a result of an interest 

in the securities issued by one of the 

parties to the Co-Investment 

Transaction; or 

(D) in the case of fees or other 

compensation described in condition 

2(c)(iii)(C). 

3. Each Regulated Fund has the right 

to decline to participate in any Potential 

Co-Investment Transaction or to invest 

less than the amount proposed. 

4. The applicable Adviser will present 

to the Board of each Regulated Fund, on 

a quarterly basis, a record of all 

investments in Potential Co-Investment 

Transactions made by any of the other 

Regulated Funds or Affiliated Investors 

during the preceding quarter that fell 

within the Regulated Fund’s thencurrent Objectives and Strategies and 

Board Established Criteria that were not 

made available to the Regulated Fund, 

and an explanation of why the 

investment opportunities were not 

offered to the Regulated Fund. All 

information presented to the Board 

pursuant to this condition will be kept 

for the life of the Regulated Fund 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 8,16

a Regulated Fund will not invest in 

reliance on the Order in any issuer in 

which a Related Party 17 has an 

investment. The Adviser will maintain 

books and records that demonstrate 

compliance with this condition for each 

Regulated Fund. 

6. A Regulated Fund will not 

participate in any Potential CoInvestment Transaction unless the 

terms, conditions, price, class of 

securities to be purchased, settlement 

date, and registration rights will be the 

same for each participating Regulated 

Fund and Affiliated Investor. The grant 

to an Affiliated Investor or another 

Regulated Fund, but not the Regulated 

Fund, 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 conditions 2(c)(iii)(A), (B) 

and (C) are met. 

7. (a) If any Affiliated Investor or any 

Regulated Fund elects to sell, exchange 

or otherwise dispose of an interest in a 

security that was acquired in a CoInvestment Transaction, the applicable 

Adviser will: 18

(i) notify each Regulated Fund that 

participated in the Co-Investment 

Transaction of the proposed disposition 

at the earliest practical time; and 

(ii) formulate a recommendation as to 

participation by each Regulated Fund in 

the disposition. 

(b) Each Regulated Fund 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 

participating Affiliated Investors and 

Regulated Funds. 

(c) A Regulated Fund may participate 

in such disposition without obtaining 

prior approval of the Required Majority 

if: (i) The proposed participation of each 

Regulated Fund and each Affiliated 

Investor in such disposition is 

proportionate to its outstanding 

investments in the issuer immediately 

preceding the disposition; (ii) the Board 

of the Regulated Fund has approved as 

being in the best interests of the 

Regulated Fund the ability to participate 

in such dispositions on a pro rata basis 

(as described in greater detail in the 

application); and (iii) the Board of the 

Regulated Fund is provided on a 

quarterly basis with a list of all 

dispositions made in accordance with 

this condition. In all other cases, the 

Adviser will provide its written 

recommendation as to the Regulated 

Fund’s participation to the Eligible 

Trustees, and the Regulated Fund will 

participate in such disposition solely to 

the extent that a Required Majority 

determines that it is in the Regulated 

Fund’s best interests. 

(d) Each Affiliated Investor and each 

Regulated Fund will bear its own 

expenses in connection with any such 

disposition. 

8. (a) If any Affiliated Investor or any 

Regulated Fund desires to make a 

Follow-On Investment in a portfolio 

company whose securities were 

acquired in a Co-Investment 

Transaction, the applicable Advisers 

will: 

(i) Notify each Regulated Fund that 

participated in the Co-Investment 

Transaction of the proposed transaction 

at the earliest practicable time; and 

(ii) formulate a recommendation as to 

the proposed participation, including 

the amount of the proposed Follow-On 

Investment, by each Regulated Fund. 

(b) A Regulated Fund may participate 

in such Follow-On Investment without 

obtaining prior approval of the Required 

Majority if: (i) the proposed 

participation of each Regulated Fund 

and each Affiliated Investor in such 

investment is proportionate to its 

outstanding investments in the issuer 

immediately preceding the Follow-On 

Investment; and (ii) the Board of the 

Regulated Fund has approved as being 

in the best interests of the Regulated 

Fund the ability to participate in 

Follow-On Investments on a pro rata 

basis (as described in greater detail in 

the application). In all other cases, the 

Adviser will provide its written 

recommendation as to the Regulated 

Fund’s participation to the Eligible 

Trustees, and the Regulated Fund will 

participate in such Follow-On 

Investment solely to the extent that a 

Required Majority determines that it is 

in the Regulated Fund’s best interests. 

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

Investment: 

(i) The amount of the opportunity is 

not based on the Regulated Funds’ and 

the Affiliated Investors’ outstanding 

investments immediately preceding the 

Follow-On Investment; and 

(ii) the aggregate amount 

recommended by the applicable Adviser 

to be invested by the applicable 

Regulated Fund in the Follow-On 

Investment, together with the amount 

proposed to be invested by the other 

participating Regulated Funds and 

Affiliated Investors, collectively, in the 

same transaction, exceeds the amount of 

the investment opportunity; then the 

amount invested by each such party will 

be allocated among them pro rata based 

on each party’s Available Capital, up to 

the amount proposed to be invested by 

each. 

(d) 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. 

9. The Non-Interested Trustees of 

each Regulated Fund will be provided 

quarterly for review all information 

concerning Potential Co-Investment 

Transactions that fell within the 

Regulated Fund’s then-current 

Objectives and Strategies and BoardEstablished Criteria, including 

investments in Potential Co-Investment 

Transactions made by other Regulated 

Funds or Affiliated Investors that the 


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Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices 32179 

19Applicants are not requesting and the staff is 

not providing any relief for transaction fees 

received in connection with any Co-Investment 

Transaction. 

Regulated Fund considered but declined 

to participate in, and concerning CoInvestment Transactions in which the 

Regulated Fund participated, so that the 

Non-Interested Trustees may determine 

whether all Potential Co-Investment 

Transactions and Co-Investment 

Transactions during the preceding 

quarter, including those Potential CoInvestment Transactions which the 

Regulated Fund considered but declined 

to participate in, comply with the 

conditions of the Order. In addition, the 

Non-Interested Trustees will consider at 

least annually: (a) The continued 

appropriateness for the Regulated Fund 

of participating in new and existing CoInvestment Transactions, and (b) the 

continued appropriateness of any 

Board-Established Criteria. 

10. Each Regulated Fund will 

maintain the records required by section 

57(f)(3) of the Act as if each of the 

Regulated Funds were a BDC and each 

of the investments permitted under 

these conditions were approved by the 

Required Majority under section 57(f) of 

the Act. 

11. No Non-Interested Trustee of a 

Regulated Fund will also be a director, 

general partner, managing member or 

principal, or otherwise an ‘‘affiliated 

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

of the Affiliated Investors. 

12. 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) 

will, to the extent not payable by the 

Advisers under their respective 

investment advisory agreements with 

Affiliated Investors and the Regulated 

Funds, be shared by the Regulated 

Funds 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. 

13. Any transaction fee 19 (including 

break-up, structuring, monitoring or 

commitment fees but excluding broker’s 

fees contemplated by section 17(e) or 

57(k) of the Act, as applicable), received 

in connection with a Co-Investment 

Transaction will be distributed to the 

participating Regulated Funds and 

Affiliated Investors on a pro rata basis 

based on the amounts they invested or 

committed, as the case may be, in such 

Co-Investment 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 Act, and the account will 

earn a competitive rate of interest that 

will also be divided pro rata among the 

participating Regulated Funds and 

Affiliated Investors based on the amount 

they invest in such Co-Investment 

Transaction. None of the Advisers, the 

Primary Advisers, the Affiliated 

Investors, the other Regulated Funds nor 

any affiliated person of the Regulated 

Funds or 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 Funds and the 

Affiliated Investors, the pro rata 

transaction fees described above and 

fees or other compensation described in 

condition 2(c)(iii)(C), and (b) in the case 

of an Adviser or Primary Adviser, 

investment advisory fees paid in 

accordance with their respective 

agreements between the Advisers and 

the Regulated Fund or Affiliated 

Investor). 

14. If the Holders own in the aggregate 

more than 25% of the Shares, then the 

Holders will vote such Shares as 

directed by an independent third party 

when voting on (1) the election of 

trustees; (2) the removal of one or more 

trustees; or (3) all other matters under 

either the Act or applicable state law 

affecting the Board’s composition, size 

or manner of election. 

15. Each Regulated Fund’s chief 

compliance officer, as defined in rule 

38a–1(a)(4) under the Act, will prepare 

an annual report for its Board each year 

that evaluates (and documents the basis 

of that evaluation) the Regulated Fund’s 

compliance with the terms and 

conditions of the application and the 

procedures established to achieve such 

compliance. 

16. The Affiliated Proprietary 

Accounts will not be permitted to invest 

in a Potential Co-Investment 

Transaction except to the extent the 

aggregate demand from the Regulated 

Funds and the other Affiliated Investors 

is less than the total investment 

opportunity. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14844 Filed 7–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice 10459] 

In the Matter of the Designation of alAshtar Brigades (AAB), aka Saraya alAshtar, as a Foreign Terrorist 

Organization Pursuant to Section 219 

of the Immigration and Nationality Act, 

as Amended 

Based upon a review of the 

Administrative Record assembled in 

this matter, and in consultation with the 

Attorney General and the Secretary of 

the Treasury, I conclude that there is a 

sufficient factual basis to find that the 

relevant circumstances described in 

section 219 of the Immigration and 

Nationality Act, as amended (hereinafter 

‘‘INA’’) (8 U.S.C. 1189), exist with 

respect to al-Ashtar Brigades (AAB), 

also known as Saraya al-Ashtar. 

Therefore, I hereby designate the 

aforementioned organization and its 

aliases as a foreign terrorist organization 

pursuant to section 219 of the INA. 

This determination shall be published 

in the Federal Register. 

Dated: June 19, 2018. 

Michael R. Pompeo, 

Secretary of State. 

[FR Doc. 2018–14837 Filed 7–10–18; 8:45 am] 

BILLING CODE 4710–AD–P 

DEPARTMENT OF STATE 

[Public Notice 10460] 

In the Matter of the Designation of alAshtar Brigades (AAB), aka Saraya alAshtar, as a Specially Designated 

Global Terrorist 

Acting under the authority of and in 

accordance with section 1(b) of 

Executive Order 13224 of September 23, 

2001, as amended by Executive Order 

13268 of July 2, 2002, and Executive 

Order 13284 of January 23, 2003, I 

hereby determine that the person known 

as al-Ashtar Brigades (AAB), also known 

as Saraya al-Ashtar, committed, or poses 

a significant risk of committing, acts of 

terrorism that threaten the security of 

U.S. nationals or the national security, 

foreign policy, or economy of the United 

States. 

Consistent with the determination in 

section 10 of Executive Order 13224 that 

prior notice to persons determined to be 

subject to the Order who might have a 

constitutional presence in the United 

States would render ineffectual the 

blocking and other measures authorized 

in the Order because of the ability to 

transfer funds instantaneously, I 

determine that no prior notice needs to 

be provided to any person subject to this 


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