Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Notices 13657 

review and notifying the public about 

how to submit comments on the 

proposed collection to OMB during the 

30-day comment period. 

DATES: Comments must be submitted to 

OMB on or before April 6, 2012. 

ADDRESSES: Submit all comments to the 

Office of Information and Regulatory 

Affairs, Attn: OMB Desk Officer for the 

Occupational Safety and Health Review 

Commission, Office of Management and 

Budget, Room 10235, Washington, DC 

20503, Telephone: (202) 395–6929/Fax: 

(202) 395–6881 (these are not toll-free 

numbers), email: 

OIRA_submission@omb.eop.gov. 

FOR FURTHER INFORMATION CONTACT: 

Requests for information or copies of the 

proposed information collection 

instrument should be directed to John 

X. Cerveny, Deputy Executive Secretary, 

Occupational Safety and Health Review 

Commission, 1120 20th Street NW., 

Ninth Floor, Washington, DC 20036– 

3457; Telephone (202) 606–5706; email 

address: pracomments@oshrc.gov. 

SUPPLEMENTARY INFORMATION: OSHRC’s 

Settlement Part program, codified at 29 

CFR 2200.120, is designed to encourage 

settlements on contested citations 

issued by the U.S. Department of 

Labor’s Occupational Safety and Health 

Administration (OSHA) and to reduce 

litigation costs. The program requires 

employers who receive job safety or 

health citations that include proposed 

penalties of $100,000 or more in total to 

participate in formal settlement talks 

presided over by an OSHRC 

Administrative Law Judge. If settlement 

efforts fail, the case would continue 

under OSHRC’s conventional 

proceedings, usually before a judge 

other than the one who presided over 

the settlement proceedings. 

To ensure the continued success of 

the program, OSHRC proposes to collect 

information from Settlement Part 

participants about their experiences 

with the program. The participants 

would be employers and Department of 

Labor personnel, Authorized Employee 

Representatives and their 

representatives, including attorneys, 

who have personally participated in 

cases from February 15, 2011 through 

February 14, 2012. The proposed 

information collection instrument is a 

written survey consisting of a series of 

multiple-choice questions that are 

intended to take a respondent no more 

than 30 minutes to complete. The 

respondents may skip any questions 

that they do not feel comfortable 

answering, and are permitted to 

comment further on their experiences at 

the end of the questionnaire. 

OSHRC has submitted the proposed 

information collection to OMB for 

review, as required by the PRA. OSHRC 

invites comments to be submitted to 

OMB on: (1) Whether the proposed 

collection of information is necessary 

for the proper performance of the 

agency’s functions, including whether 

the information will have practical 

utility; (2) the accuracy of the agency’s 

estimate of the burden of the proposed 

collection of information, including the 

validity of the methodology and 

assumptions used; (3) ways to enhance 

the quality, utility, and clarity of the 

information to be collected; and (4) 

ways to minimize the burden of the 

information collection on respondents, 

including through the use of automated 

collection techniques, when 

appropriate, and other forms of 

information technology. 

OMB Control Number: Not applicable, 

new request. 

Form Number: Not applicable. 

Type of Review: Regular submission 

(new information collection). 

Title: Survey of Participants in 

OSHRC Settlement Part Program. 

Description: Information collection 

required to evaluate the Review 

Commission’s Settlement Part process. 

Affected Public: Employer and 

Department of Labor (OSHA) personnel 

(settlement decision makers), 

Authorized Employee Representatives, 

and their representatives, including 

attorneys, who have personally 

participated in cases subject to 

Mandatory and Voluntary Settlement 

proceedings under 29 CFR 2200.120 

from February 15, 2011 through 

February 14, 2012. 

Estimated Number of Respondents: 

300. 

Estimated Time per Response: 30 

minutes. 

Estimated Total Reporting Burden: 

150 hours. 

Obligation to respond: Voluntary. 

Dated: March 2, 2012. 

Debra Hall, 

Acting Executive Director. 

[FR Doc. 2012–5546 Filed 3–6–12; 8:45 am] 

BILLING CODE 7600–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

29973; 812–13493] 

American Capital, Ltd., et al.; Notice of 

Application 

March 1, 2012. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘1940 Act’’) granting an exemption from 

section 12(d)(3) of the 1940 Act. 

Applicants: American Capital, Ltd. 

(the ‘‘Company’’), American Capital, 

LLC (‘‘AC LLC’’), American Capital 

Mortgage Management, LLC (‘‘ACMM’’), 

and European Capital Financial Services 

(Guernsey) Limited (‘‘ECFSG’’). 

SUMMARY: Summary of Application: The 

Company, AC LLC, ACMM, and ECFSG 

(collectively, the ‘‘Applicants’’) request 

an order (‘‘Order’’) of the Commission 

pursuant to section 6(c) of the 1940 Act 

granting an exemption from the 

provisions of section 12(d)(3) of the 

1940 Act, to the extent necessary at such 

time as AC LLC and the AC Subs (as 

defined below) are required to become 

registered investment advisers under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’), in order to allow: the 

Company to continue to hold up to 

100% of the outstanding membership 

interests of AC LLC; AC LLC to continue 

to hold up to 100% of the outstanding 

membership interests of the AC Subs 

and ACMM; ACMM to continue to hold 

up to 100% of the outstanding 

membership interests of American 

Capital AGNC Management, LLC (‘‘AC 

Agency’’) and American Capital MTGE 

Management, LLC (‘‘AC Mtge’’); and 

ECFSG to continue to hold up to 100% 

of the outstanding membership interests 

of European Capital Financial Services 

Limited (‘‘ECFS’’). 

DATES: Filing Dates: The application was 

filed on February 12, 2008, and 

amended on March 11, 2011, November 

23, 2011, February 22, 2012, and 

February 29, 2012. 

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 March 26, 2012, and 

should be accompanied by proof of 

service on the applicants, in the form of 

an affidavit or, for lawyers, a certificate 

of service. Hearing requests should state 

the nature of the writer’s interest, 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: Elizabeth M. Murphy, 

Secretary, Securities and Exchange 

Commission, 100 F Street NE., 


srobinson on DSK4SPTVN1PROD with NOTICES
13658 Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / 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 sections 55(a)(1) through 55(a)(3) of the 

1940 Act, makes available significant managerial 

assistance with respect to the issuers of such 

securities, and has elected to be subject to the 

provisions of sections 55 through 65 of the 1940 

Act. 

2Private Fund Investment Advisers Registration 

Act of 2010, Title IV of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act. Neither AC 

LLC nor any of the AC Subs qualify for any 

exemption from registration available under rules 

recently adopted by the Commission. Exemptions 

for Advisers to Venture Capital Funds, Private Fund 

Advisers With Less Than $150 Million in Assets 

Under Management, and Foreign Private Advisers, 

Release No. IA–3222 (June 22, 2011) (adopting 

release). 

3Rules Implementing Amendments to the 

Investment Advisers Act of 1940, SEC Release No. 

IA–3221 (July 22, 2011). AC LLC and the AC Subs 

will be registered as investment advisers under the 

Advisers Act, and the Company will not acquire 

any interest in an investment adviser that is not 

registered under the Advisers Act. 

4Rule 12d3–1 under the 1940 Act provides 

limited relief from the restrictions of section 

12(d)(3). Applicants do not believe the Company 

may rely on this relief with respect to its investment 

in AC LLC or the AC Subs because AC LLC’s and 

the AC Subs’ gross revenues derived from 

securities-related activities will exceed the rule’s 

quantitative limits for such revenues. 

Washington, DC 20549–1090. 

Applicants, 2 Bethesda Metro Center, 

14th Floor, Bethesda, MD 20814. 

FOR FURTHER INFORMATION CONTACT: Jill 

Ehrlich, Senior Counsel, at (202) 551– 

6819, or David P. Bartels, Branch Chief, 

at (202) 551–6821 (Division of 

Investment Management, Office of 

Investment Company Regulation). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http:// 

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

calling (202) 551–8090. 

Applicants’ Representations 

1. The Company, incorporated in 

Delaware in 1986, is a non-diversified, 

closed-end investment company that 

has elected to be regulated as a business 

development company (‘‘BDC’’) within 

the meaning of section 2(a)(48) under 

the 1940 Act.1 The Company’s primary 

business objectives are to increase its 

net operating income and net asset 

value by investing primarily in senior 

debt, subordinated debt and equity of 

middle market businesses with 

attractive current yields and potential 

for equity appreciation and realized 

gains. Most of the Company’s 

investments are made in connection 

with buyout transactions, which are 

sponsored either by the Company or 

another entity. The Company also 

makes investments in certain structured 

financial products and alternative asset 

funds managed by AC LLC, as well as 

certain portfolio companies in which 

the Funds (as defined below) also are 

investors. 

2. The Company is internally 

managed with an eight-member board 

and a senior management staff 

consisting of eight executive officers 

(one of whom also is a director). Seven 

of the eight current members of the 

board are not ‘‘interested persons’’ of 

the Company as defined in section 

2(a)(19) of the 1940 Act. In addition to 

approving investment decisions, the 

Company’s directors are actively 

involved in the oversight of the 

Company’s affairs, and the Company 

relies extensively on the judgment and 

experience of its directors. 

3. The Company’s alternative asset 

fund management business is conducted 

through AC LLC, a Delaware limited 

liability company that was created in 

2007 and is a wholly-owned subsidiary 

of the Company. AC LLC currently 

manages a number of private investment 

funds and two public real estate 

investment trusts (collectively, the 

‘‘Funds’’) through the following direct 

and indirect subsidiaries (collectively, 

the ‘‘AC Subs’’): American Capital 

Equity Management, LLC (‘‘ACEM’’); 

American Capital Equity Management 

II, LLC (‘‘ACEM2’’); American Capital 

Asset Management, LLC (‘‘ACAM’’); 

American Capital CRE Management, 

LLC (‘‘ACREM’’); AC Agency; AC Mtge; 

ECFSG; and ECFS. 

4. ACEM, ACEM2, ACAM, ACREM, 

and ECFSG are each wholly-owned by 

AC LLC. ECFS is wholly-owned by 

ECFSG. AC Agency and AC Mtge are 

wholly-owned subsidiaries of ACMM. 

ACMM is owned by AC LLC, with one 

employee of ACMM owning a less than 

25% economic (non-voting) interest, 

and AC LLC owning a 100% voting 

interest. The Company, AC LLC, and the 

AC Subs utilize certain overlapping 

personnel, as described in the 

application. 

5. The AC Subs generally earn base 

management fees based on the gross 

assets or net asset value of the Funds 

they manage, and certain of them earn 

incentive income based on the 

performance of the Funds. ACREM 

earns collateral administration fees 

based on the collateral balance in the 

Fund it manages. 

6. AC LLC and the AC Subs currently 

rely on the registration exemption set 

forth in section 203(b)(3) of the Advisers 

Act, which provides generally that an 

investment adviser with fewer than 15 

clients is not required to register with 

the Commission. However, the DoddFrank Wall Street Reform and Consumer 

Protection Act 2 eliminated this 

exemption, and AC LLC and the AC 

Subs will, based on their assets under 

management, be required to register 

with the Commission.3

Applicants’ Legal Analysis 

1. Section 12(d)(3) makes it unlawful 

for any registered investment company, 

and any company controlled by a 

registered investment company, to 

acquire any interest in the business of 

a person who is either an investment 

adviser of an investment company or an 

investment adviser registered under the 

Advisers Act, unless (a) such person is 

a corporation all the outstanding 

securities of which are owned by one or 

more registered investment companies; 

and (b) such person is primarily 

engaged in the business of underwriting 

and distributing securities issued by 

other persons, selling securities issued 

by other persons, selling securities to 

customers, or any one or more of such 

or related activities, and the gross 

income of such person normally is 

derived principally from such business 

or related activities. Section 60 of the 

1940 Act states that section 12 shall 

apply to a BDC to the same extent as if 

it were a registered closed-end 

investment company. 

2. Section 6(c) of the 1940 Act 

provides that the Commission may 

conditionally or unconditionally 

exempt any person, security or 

transaction from any provision of the 

1940 Act or any rule thereunder if and 

to the extent that such exemption is 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the 1940 Act. 

3. Applicants do not expect that AC 

LLC and the AC Subs would be brokerdealers that primarily engage in the 

business of underwriting and 

distributing securities issued by other 

persons. Accordingly, provided that the 

‘‘related activities’’ phrase of section 

12(d)(3)(B) is not interpreted to include 

investment advisory services, when it 

becomes necessary for AC LLC and the 

AC Subs to register as investment 

advisers, the Company’s current 

ownership of AC LLC and the AC Subs 

could cause the Company to be in 

violation of the provisions of section 

12(d)(3).4 Therefore, Applicants request 

the Order pursuant to section 6(c) of the 

1940 Act granting an exemption from 

the provisions of section 12(d)(3) of the 

1940 Act, to the extent necessary at such 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Notices 13659 

5The Company will only rely on the Order with 

respect to its investments in AC LLC and the AC 

Subs, AC LLC will only rely on the Order with 

respect to the AC Subs, ACMM will only rely on 

the Order with respect to AC Agency and AC Mtge, 

and ECFSG will only rely on the Order with respect 

to ECFS. 

6Applicants nevertheless state that they are 

focused on ensuring that any potential conflicts of 

interest are identified and addressed. Among other 

things, Applicants represent that, although the 

Company, AC LLC, and the AC Subs utilize 

overlapping personnel, their legal and compliance 

teams would generally implement procedures to 

restrict communications between investment 

professionals should a conflict arise. Applicants 

also represent that each maintains investment 

committees that follow consistent processes for 

investment decisions and vote separately on behalf 

of each fund. Applicants believe this structure 

facilitates the detection and avoidance of potential 

conflicts of interest throughout the investment 

process, as well as during the time a portfolio 

investment is held. 

7Applicants also assert that the Company’s 

ownership of AC LLC and the AC Subs does not 

raise concerns of ‘‘propping’’ because the Company 

is not dependent on AC LLC or any AC Sub either 

for revenue or investment advice and because the 

advisory subsidiaries will not issue any public 

securities to ‘‘prop up.’’ 

8Taxation as a RIC relieves the Company of 

federal income tax on its net investment income 

and net realized capital gains, if any, to the extent 

that they are distributed to stockholders. 

time as AC LLC and the AC Subs are 

required to become registered 

investment advisers, in order to allow: 

the Company to continue to hold up to 

100% of the outstanding membership 

interests of AC LLC; AC LLC to continue 

to hold up to 100% of the outstanding 

membership interests of the AC Subs 

and ACMM; ACMM to continue to hold 

up to 100% of the outstanding 

membership interests of AC Agency and 

AC Mtge; and ECFSG to continue to 

hold up to 100% of the outstanding 

membership interests of ECFS.5

4. Applicants state that section 

12(d)(3) was intended (a) to prevent 

investment companies from exposing 

their assets to the entrepreneurial risks 

of securities-related businesses and (b) 

to prevent potential conflicts of interest 

and certain reciprocal practices between 

investment companies and securitiesrelated businesses. 

5. Applicants submit that the 

Company’s retention of its majority 

ownership of AC LLC and the AC Subs 

does not raise the issues regarding 

entrepreneurial risk that section 12(d)(3) 

was designed to prevent. Applicants 

state that the form of organization of 

many securities-related businesses has 

changed since 1940, when section 

12(d)(3) was adopted, from general 

partnerships to structures that are 

characterized by limited liability. 

Applicants assert that AC LLC and the 

AC Subs do not expose the Company’s 

stockholders to the risk of unlimited 

liability because each is organized as a 

separate entity whose owners have 

limited liability. 

6. Applicants also submit that the 

Company’s retention of its majority 

ownership of AC LLC and the AC Subs 

does not raise the issues regarding 

conflicts of interest and reciprocal 

practices that section 12(d)(3) was 

designed to prevent. Because the 

Company is the sole owner of AC LLC 

and the sole or majority owner of each 

AC Sub and will maintain a majority 

voting interest and economic interest in 

AC LLC and each of the AC Subs, 

Applicants believe that ultimately the 

interests of the companies are generally 

aligned and that the likelihood of 

conflicts of interest arising is low. 

Applicants also assert that there are 

generally no investment allocation 

conflicts between the Company and the 

Funds.6 Applicants represent that the 

procedures and policies that the 

Company has adopted with respect to 

AC LLC and the AC Subs and the 

methods of operations proposed will 

ensure that the Company will continue 

to be operated and managed in the 

interests of its stockholders and that 

ownership by it of AC LLC and the AC 

Subs will otherwise be consistent with 

the purposes fairly intended by the 

policy and provisions of the 1940 Act. 

Applicants also represent that, at such 

time as AC LLC and the AC Subs are 

required to register as investment 

advisers under the Advisers Act, they 

will maintain formal policies and 

procedures related to their operations 

(including appointing a chief 

compliance officer) that are designed to 

ensure that management of AC LLC and 

the AC Subs is conducted in the best 

interests of the Funds, as well as their 

shareholders.7

7. Applicants further submit that the 

conditions to the requested relief 

proposed in the Application will protect 

the Company from potential conflicts of 

interest and reciprocal practices by 

making it impossible for the Company 

to become a minority owner of AC LLC 

or any AC Sub, and the Company’s 

board of directors will periodically 

review whether continued ownership of 

the advisory businesses is warranted. In 

addition, Applicants assert that the 1940 

Act would not prevent the Company 

from engaging directly in the activities 

that it conducts through AC LLC and the 

AC Subs. 

8. Applicants state that registering AC 

LLC and the AC Subs as investment 

advisers and maintaining a majority of 

both their voting rights and economic 

interests, will enable the Company to 

continue to increase its earnings 

potential through AC LLC’s existing 

advisory business, as well as other 

potential advisory business, and 

maintain and, ultimately, increase the 

profitability of the Company. Applicants 

also state that the organizational 

structure of the Company and its 

investment management affiliates could 

assist the Company in qualifying as a 

‘‘regulated investment company’’ 

(‘‘RIC’’) under Subchapter M of the 

Internal Revenue Code of 1986.8

9. Applicants represent that the 

Company’s management and its board 

believe that ensuring the ability to 

continue to own and invest in AC LLC 

is in the best interests of the Company’s 

stockholders and its business. 

Applicants state that requiring the 

Company to divest itself of AC LLC and 

the AC Subs would cause substantial 

economic harm to the Company and, 

thus, the Company’s stockholders. 

10. Accordingly, Applicants represent 

that the requested relief is appropriate 

in the public interest and consistent 

with the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the 1940 Act. 

Applicants’ Conditions 

Applicants agree that the Order of the 

Commission granting the requested 

relief shall be subject to the following 

conditions: 

1. The Company will not dispose of 

the interests of AC LLC or an AC Sub 

if, as a result, the Company would own, 

directly or indirectly, 50 percent or less 

of the outstanding voting interests or 

economic interests of AC LLC or the AC 

Sub unless the Company disposes of 

100 percent of its membership interests 

in AC LLC or the AC Sub. 

2. The board of directors of the 

Company will review at least annually 

the investment management business of 

the Company, AC LLC and the AC Subs 

in order to determine whether the 

benefits derived by the Company 

warrant the continuation of the 

ownership by the Company of AC LLC 

and the AC Subs and, if appropriate, 

will approve (by at least a majority of 

the directors of the Company who are 

not ‘‘interested persons’’ of the 

Company as defined by the 1940 Act) at 

least annually, such continuation. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5514 Filed 3–6–12; 8:45 am] 

BILLING CODE 8011–01–P 


srobinson on DSK4SPTVN1PROD with NOTICES