13660 Federal Register / Vol. 77, No. 45 / Wednesday, March 7, 2012 / Notices 

1Section 2(a)(48) of the Act defines a BDC to be 

any closed-end 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. 

2The Company completed the initial public 

offering (‘‘IPO’’) of its shares of common stock on 

June 24, 2011. The Company’s common stock is 

traded on the NASDAQ Global Market under the 

symbol ‘‘FDUS’’. Prior to the closing of the IPO, 

through a series of transactions (‘‘Formation 

Transactions’’), the Company acquired all of the 

limited partnership interests in Fidus SBIC and all 

of the membership interests in the New General 

Partner, and each of these entities operates as a 

subsidiary of the Company. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

29974; 812–13879] 

Fidus Investment Corporation, et al.; 

Notice of Application 

March 1, 2012. 

AGENCY: Securities and Exchange 

Commission (the ‘‘Commission’’). 

ACTION: Notice of an application for an 

order under sections 6(c), 12(d)(1)(J), 

and 57(c) of the Investment Company 

Act of 1940 (‘‘Act’’) granting exemptions 

from sections 12(d)(1)(A), 18(a), 21(b), 

57(a)(1)–(a)(3), and 61(a) of the Act; 

under section 57(i) of the Act and rule 

17d–1 under the Act to permit certain 

joint transactions otherwise prohibited 

by section 57(a)(4) of the Act; and under 

section 12(h) of the Securities Exchange 

Act of 1934 (‘‘Exchange Act’’) granting 

an exemption from section 13(a) of the 

Exchange Act. 

APPLICANTS: Fidus Investment 

Corporation (‘‘Company’’), Fidus 

Mezzanine Capital, L.P. (‘‘Fidus SBIC’’), 

Fidus Investment GP, LLC (‘‘New 

General Partner’’), and Fidus Investment 

Advisors, LLC (‘‘Fidus Advisors’’). 

SUMMARY OF APPLICATION: Applicants 

request an order permitting the 

Company, a business development 

company (‘‘BDC’’) and Fidus SBIC, its 

wholly-owned small business 

investment company (‘‘SBIC’’) 

subsidiary that is also a BDC, to operate 

effectively as one company, specifically 

allowing them to (1) engage in certain 

transactions with each other; (2) invest 

in securities in which the other is or 

proposes to be an investor; (3) be subject 

to modified asset coverage requirement 

for senior securities issued by a BDC 

and its SBIC subsidiary; and (4) file 

certain reports with the Commission on 

a consolidated basis. 

DATES: Filing Dates: The application was 

filed on March 15, 2011, and amended 

on August 9, 2011, and February 28, 

2012. 

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 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 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: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

Applicants, c/o Edward H. Ross, Fidus 

Investment Corporation, 1603 Orrington 

Avenue, Suite 820, Evanston, Illinois 

60201. 

FOR FURTHER INFORMATION CONTACT: 

Barbara T. Heussler, Senior Counsel, at 

(202) 551–6990, or Jennifer L. Sawin, 

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 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 Maryland 

corporation, is an externally-managed, 

non-diversified, closed-end 

management investment company that 

has elected to be regulated as a BDC 

under the Act.1 On June 16, 2011, the 

Company filed a registration statement 

to register its common stock under 

Section 12 of the Exchange Act.2 In 

addition, the Company intends to elect 

to be treated as a regulated investment 

company (‘‘RIC’’) as defined under 

Subchapter M of the Internal Revenue 

Code of 1986, as amended and intends 

to continue to make such election in the 

future. The Company provides 

customized mezzanine debt and equity 

financing solutions to lower middle 

market companies that have revenues 

between $10 and $150 million. The 

Company’s board of directors (‘‘Board’’), 

consists of five members, three of whom 

are not ‘‘interested persons’’ of the 

Company within the meaning of section 

2(a)(19) of the Act. The Company’s 

investment objective is to provide 

attractive risk-adjusted returns by 

generating both current income from 

debt investments and capital 

appreciation from equity related 

investments. 

2. Fidus SBIC, a Delaware limited 

partnership, is an SBIC licensed by the 

Small Business Administration (‘‘SBA’’) 

to operate under the Small Business 

Investment Act of 1958. On June 20, 

2011, Fidus SBIC filed an election to be 

regulated as a BDC within the meaning 

of Section 2(a)(48) on Form N–54A 

under the Act in connection with the 

effectiveness of its registration statement 

on Form N–5. On June 16, 2011, Fidus 

SBIC also filed a registration statement 

on Form 8–A to register its common 

stock under Section 12 of the Exchange 

Act. Fidus SBIC has the same 

investment objectives and strategies as 

the Company. The Company owns a 

99.99% limited partnership interest in 

Fidus SBIC; the New General Partner, a 

wholly-owned subsidiary of the 

Company, owns a 0.01% general 

partnership interest in Fidus SBIC. 

Fidus SBIC, therefore, is a whollyowned subsidiary of the Company, 

because the Company and the New 

General Partner own all of the 

partnership and voting interests in 

Fidus SBIC. Fidus SBIC is and will 

remain, at all times, a wholly-owned 

subsidiary of the Company and 

consolidated with the Company for 

financial reporting purposes. Fidus 

SBIC has a board of directors (‘‘Fidus 

SBIC Board’’) consisting of three 

persons who are not ‘‘interested 

persons’’ of Fidus SBIC within the 

meaning of section 2(a)(19) of the Act 

and two persons who are ‘‘interested 

persons’’ of Fidus SBIC. The members of 

Fidus SBIC Board are appointed each 

year by the equity owners of Fidus 

SBIC. The New General Partner has 

irrevocably delegated the authority to 

manage the business affairs of Fidus 

SBIC to the Fidus SBIC Board. The SBA 

has approved the members of the Fidus 

SBIC Board pursuant to SBA 

regulations. No person who is not also 

a member of the Board of the Company 

can serve as a member of the Fidus SBIC 

Board. 

3. Fidus Advisors is a Delaware 

limited liability company and serves as 

the investment adviser to the Company 

and Fidus SBIC. Fidus Advisors is 

registered as an investment adviser 

under the Investment Advisers Act of 

1940. Pursuant to an investment 

management agreement with the 

Company that satisfies the requirements 


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under Sections 15(a) and (c), Fidus 

Advisors manages the consolidated 

assets of the Company and Fidus SBIC. 

The investment professionals of Fidus 

Advisors are responsible for sourcing 

potential investments, conducting 

research and diligence on potential 

investments and equity sponsors, 

analyzing investment opportunities, 

structuring investments and monitoring 

the investments and portfolio 

companies of the Company and its 

wholly-owned subsidiaries, including 

Fidus SBIC. 

4. The New General Partner is a 

limited liability company organized 

under the laws of the state of Delaware. 

The New General Partner is the sole 

general partner of Fidus SBIC and its 

only role is to perform ministerial 

functions that result from decisions 

made by Fidus Advisors; the New 

General Partner is not able to prevent 

Fidus Advisors from acting 

independently. 

Applicants’ Legal Analysis 

1. Applicants request an order under 

sections 6(c), 12(d)(1)(J), 57(c) and 57(i) 

of the Act and rule 17d–1 under the Act 

granting exemptions from sections 

12(d)(1)(A), 18(a), 21(b), 57(a)(1), 

57(a)(2), 57(a)(3), and 61(a) of the Act 

and permitting certain joint transactions 

otherwise prohibited by section 57(a)(4) 

of the Act to permit the Company and 

Fidus SBIC to operate effectively as one 

company, specifically to: (a) Engage in 

certain transactions with each other; (b) 

invest in securities in which the other 

is or proposes to be an investor; and (c) 

be subject to modified consolidated 

asset coverage requirements for senior 

securities issued by a BDC and its 

subsidiary SBIC. Applicants also request 

an order under section 12(h) of the 

Exchange Act for an exemption for 

Fidus SBIC from section 13(a) of the 

Exchange Act, so as to allow filing of 

consolidated reports with the 

Commission. 

2. Section 12 of the Act is made 

applicable to BDCs by section 60 of the 

Act. Section 12(d)(1)(A) makes it 

unlawful for any registered investment 

company to purchase or otherwise 

acquire the securities of another 

investment company, except to the 

extent permitted by sections 

12(d)(1)(A)(i), (ii) and (iii). Rule 60a–1 

exempts the acquisition by a BDC of the 

securities of an SBIC that is operated as 

a wholly-owned subsidiary of the BDC 

from section 12(d)(1)(A) of the Act. 

Accordingly, since the Company has 

elected BDC status and since Fidus SBIC 

is, and will at all times be, operated as 

a wholly owned subsidiary of the 

Company, the transfer of assets from the 

Company to Fidus SBIC should be 

exempt from the provisions of section 

12(d)(1)(A) by virtue of rule 60a–1. 

However, the provisions of section 

12(d)(1) also apply to the activities of 

Fidus SBIC since Fidus SBIC has elected 

BDC status under the Act. Any loans or 

advances by Fidus SBIC to the Company 

might be deemed to violate section 

12(d)(1)(A)(ii) or (iii) if the loans or 

advances are construed as purchases of 

the securities of the Company by Fidus 

SBIC. 

3. Applicants request an exemption 

under section 12(d)(1)(J) from section 

12(d)(1)(ii) and (iii) of the Act to permit 

the acquisition by Fidus SBIC of any 

securities of the Company representing 

indebtedness. Section 12(d)(1)(J) of the 

Act provides that the Commission may 

exempt persons or transactions from any 

provision of section 12(d)(1) if and to 

the extent such exception is consistent 

with the public interest and the 

protection of investors. Applicants state 

that the requested relief meets this 

standard because Fidus SBIC’s wholly 

owned subsidiary status and 

consolidated financial reporting with 

the Company will both eliminate the 

possibility of overreaching and prevent 

confusion as to the financial status of 

the Company to the Company’s 

stockholders, who are the investors that 

the Act is intended to protect. 

4. Section 18(a) 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) 

applies section 18 to a BDC to the same 

extent as if the BDC were a registered 

closed-end investment company, subject 

to certain exceptions. Section 18(k), 

however, provides an exemption from 

sections 18(a)(1)(A) and (B) (relating to 

senior securities representing 

indebtedness) for SBICs. 

5. Applicants state that a question 

exists as to whether the Company must 

comply with the asset coverage 

requirements of section 18(a) on a 

consolidated basis because the 

Company may be an indirect issuer of 

senior securities with respect to Fidus 

SBIC indebtedness. To do so would 

mean that the Company would treat as 

its own all assets held directly by the 

Company and Fidus SBIC and would 

also treat as its own any liabilities of 

Fidus SBIC, including liabilities of 

Fidus SBIC with respect to senior 

securities as to which Fidus SBIC is 

exempt from the provisions of sections 

18(a)(1)(A) and (B) by virtue of section 

18(k). Accordingly, applicants request 

relief under section 6(c) of the Act from 

sections 18(a) and 61(a) of the Act to 

permit the Company to exclude from its 

consolidated asset coverage ratio any 

senior security representing 

indebtedness that is issued by Fidus 

SBIC. 

6. 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, without the requested relief from 

sections 18(a) and 61(a), the ability of 

Fidus SBIC to obtain the kind of 

financing that would be available to the 

Company if it were to conduct the SBIC 

operations itself would be restricted. 

Applicants state that applying section 

18(k) to the Company with respect to 

any senior security representing 

indebtedness that is issued by Fidus 

SBIC would not harm the public interest 

by exposing investors to risks of 

unconstrained leverage, because the 

SBA regulates the capital structure of 

Fidus SBIC. 

7. Sections 57(a)(1) and (2) of the Act 

generally prohibit, with certain 

exceptions, sales or purchases of any 

security or other property between BDCs 

and certain of their affiliates as 

described in section 57(b) of the Act. 

Section 57(b) includes any person, 

directly or indirectly, who controls, is 

controlled by, or is under common 

control with the BDC. Applicants state 

that the Company is an affiliated person 

of Fidus SBIC by reason of its direct 

ownership of all of the limited 

partnership interests in Fidus SBIC and 

its indirect ownership of all the general 

partnership interests in Fidus SBIC 

through its 100% ownership of the New 

General Partner. Fidus SBIC is an 

affiliated person of the Company 

because it is deemed to be under the 

control of the Company. Accordingly, 

the Company and Fidus SBIC are related 

to each other in the manner set forth in 

section 57(b). 

8. Applicants state that there may be 

circumstances when it is in the interests 

of the Company and its stockholders 

that Fidus SBIC invest in securities of 

an issuer that may be deemed to be a 

controlled portfolio affiliate of the 

Company or that the Company invest in 

securities of an issuer that may be 

deemed to be a controlled portfolio 

affiliate of Fidus SBIC. Applicants 

therefore request an exemption from 

sections 57(a)(1) and 57(a)(2) of the Act 

to permit any transaction solely between 

the Company and Fidus SBIC with 


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3Applicants state that they are not seeking relief 

from Section 57(a)(3) for loans from the Company 

to Fidus SBIC because under the existing control 

structure, no such relief is necessary. 

respect to the purchase or sale of 

securities or other property. Applicants 

also seek an exemption from the 

provisions 57(a)(1) and (2) to allow any 

transaction involving the Company and/ 

or Fidus SBIC and portfolio affiliates of 

either or both of the Company and/or 

Fidus SBIC, but only to the extent that 

the transaction would not be prohibited 

if the Company and Fidus SBIC were 

one company. 

9. Section 57(c) provides that the 

Commission will exempt a proposed 

transaction from the provisions of 

sections 57(a)(1), (2), and (3) of the Act 

if the terms of the proposed transaction, 

including the consideration to be paid 

or received, are reasonable and fair and 

do not involve overreaching of any 

person concerned, and the proposed 

transaction is consistent with the policy 

of the BDC concerned and the general 

purposes of the Act. 

10. Applicants submit that the 

requested relief from sections 57(a)(1) 

and (2) meets this standard. Applicants 

represent that the proposed operations 

as one company will enhance the 

efficient operations of the Company and 

its wholly owned subsidiary, Fidus 

SBIC, and allow them to deal with 

portfolio companies as if the Company 

and Fidus SBIC were one company. 

Applicants contend that the terms of the 

proposed transactions are reasonable 

and fair and do not involve 

overreaching of the Company or its 

stockholders by any person, and that the 

requested order would permit the 

Company and Fidus SBIC to carry out 

more effectively their purposes and 

objectives of investing primarily in 

small business concerns. Applicants 

also state that since Fidus SBIC will be 

a wholly owned subsidiary of the 

Company and since no officers or 

directors of the Company or Fidus SBIC 

(or any controlling persons or other 

‘‘upstream affiliates’’ of the Company) 

will have any prohibited financial 

interest in the transactions described, 

there can be no overreaching on the part 

of any persons and no harm to the 

public interest in transactions solely 

between the Company and Fidus SBIC. 

Finally, applicants note that the 

proposed transactions are consistent 

with the policy of the Company and 

Fidus SBIC as specified in filings with 

the Commission and reports to 

stockholders, as well as consistent with 

the policies and provisions of the Act. 

11. Section 57(a)(3) of the Act makes 

it unlawful for certain affiliated persons 

of a BDC, and certain affiliated persons 

of those persons, set out in section 57(b) 

to borrow money or other property from 

such BDC or from any company 

controlled by the BDC, except as 

permitted by section 21(b) or section 62. 

Section 21(b) of the Act (made 

applicable to BDCs by section 62) 

provides that it shall be unlawful for a 

BDC to lend any money or property, 

directly or indirectly, to any person that 

controls or is under common control 

with the BDC, except to any company 

that owns all of the outstanding 

securities of the BDC other than 

directors’ qualifying shares. 

12. The Company is an affiliated 

person of Fidus SBIC by reason of its 

direct ownership of all of the limited 

partnership interests in Fidus SBIC and 

its indirect ownership of all of the 

general partnership interests in Fidus 

SBIC through its 100% ownership of the 

New General Partner. The Company 

does not directly own all of the 

outstanding securities of Fidus SBIC 

because the New General Partner holds 

a 0.01% general partnership interest in 

Fidus SBIC and Fidus SBIC has issued 

SBA guaranteed debentures and, in the 

future, may have other outstanding 

securities in the form of indebtedness. 

Fidus SBIC is an affiliated person of the 

Company because it is deemed to be 

under the control of the Company. 

Accordingly, the Company is related to 

Fidus SBIC in the manner set forth in 

section 57(b) and Fidus SBIC is related 

to the Company in the manner set forth 

in section 57(b). 

13. Applicants state that there may be 

instances when it would be in the best 

interests of the Company and its 

stockholders for the Company to make 

loans to Fidus SBIC or for Fidus SBIC 

to make loans to the Company. 

Applicants note that, in the case of 

loans from Fidus SBIC to the Company, 

the loans would be prohibited by 

section 21(b) and section 57(a)(3) 

because the borrower controls the 

lender and the lender may have 

outstanding securities not owned by the 

borrower. Accordingly, applicants 

request an order under section 6(c) 

exempting from the provisions of 

section 21(b) the lending of money or 

other property by Fidus SBIC to the 

Company. Applicants argue that 

because these transactions are solely 

between the Company and Fidus SBIC, 

its wholly-owned subsidiary, they will 

have no substantive economic effect and 

there is be no basis for overreaching or 

harm to the public interest. Applicants 

also request an order under section 57(c) 

exempting from the provisions of 

section 57(a)(3) the borrowing of money 

or property by the Company from Fidus 

SBIC.3 Applicants submit that the 

requested relief meets the standards of 

section 57(c). 

14. Section 57(a)(4) of the Act 

generally prohibits joint transactions 

involving any BDC or a company it 

controls and certain persons related to 

the BDC as specified in section 57(b) of 

the Act, acting as principal in 

contravention of such rules and 

regulations as the Commission may 

prescribe for the purpose of limiting or 

preventing participation by the BDC or 

controlled company on a basis less 

advantageous than that of the other 

participant. Section 57(i) of the Act 

provides that rules and regulations 

under section 17(d) of the Act, such as 

rule 17d–1, will apply to transactions 

subject to section 57(a)(4) in the absence 

of rules under that section. The 

Commission has not adopted rules 

under section 57(a)(4) with respect to 

joint transactions and, accordingly, the 

standards set forth in rule 17d–1 govern 

applicants’ request for relief. Rule 17d– 

1 under the Act (made applicable to 

BDCs by section 57(i)) prohibits 

affiliated persons of a registered 

investment company, or an affiliated 

person of such person, or, when 

applying rule 17d–1 to implement 

section 57(a)(4), a person related to a 

BDC in a manner described in Section 

57(b), acting as principal, from 

participating in any joint transaction or 

arrangement in which the BDC or a 

company it controls is a participant, 

unless the Commission has issued an 

order authorizing the arrangement. 

15. Applicants request relief under 

section 57(i) and rule 17d–1to permit 

any joint transaction that would 

otherwise be prohibited by section 

57(a)(4) between the Company and 

Fidus SBIC with respect to any 

transaction involving investments by 

the Company or Fidus SBIC in portfolio 

companies in which either is or is 

proposed to become an investor, but 

only to the extent that the transaction 

would not be prohibited if Fidus SBIC 

(and all of its assets and liabilities) were 

deemed to be part of the Company, and 

not a separate company. 

16. In determining whether to grant 

an order under section 57(i) and rule 

17d–1, the Commission considers 

whether the participation of the BDC 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. Applicants state that the 

proposed transactions are consistent 

with the policy and provisions of the 


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1 15 U.S.C. 78ee. 

2 15 U.S.C. 78ee(b). 

3 15 U.S.C. 78ee(c). 

4See 15 U.S.C. 78ee(j)(1) (The Commission must 

adjust the rates under Sections 31(b) and (c) to a 

‘‘uniform adjusted rate that, when applied to the 

baseline estimate of the aggregate dollar amount of 

sales for such fiscal year, is reasonably likely to 

produce aggregate fee collections under [Section 31] 

(including assessments collected under [Section 

31(d)]) that are equal to the regular appropriation 

Continued 

Act and will enhance the interests of the 

Company’s stockholders while retaining 

for them the important protections 

afforded by the Act. In addition, because 

the joint participants will conduct their 

operations as though they comprise one 

company, the participation of one will 

not be on a basis different from or less 

advantageous than the others. 

Accordingly, applicants submit that the 

standard for relief under section 57(i) 

and rule 17d–1 is satisfied. 

17. Section 54 of the Act provides that 

a closed-end company may elect BDC 

treatment under the Act if the company 

has either a class of equity securities 

registered under section 12 of the 

Exchange Act or has filed a registration 

statement pursuant to section 12 of the 

Exchange Act for a class of its equity 

securities. Section 12(g) of the Exchange 

Act requires issuers with specified 

assets and a specified number of 

security holders to register under the 

Exchange Act. As a BDC, the Company 

has registered its common stock under 

section 12(b) of the Exchange Act. In 

order to elect BDC treatment under the 

Act, Fidus SBIC voluntarily registered 

its securities under the Exchange Act 

even though it is not required to do so 

by section 12(g) of the Exchange Act. 

18. By filing a registration statement 

under section 12 of the Exchange Act, 

absent an exemption, Fidus SBIC would 

be required to make periodic filings 

with the Commission, even though 

Fidus SBIC will have only one equity 

holder. Section 13 of the Exchange Act 

is the primary section requiring such 

filings. Accordingly, applicants request 

an order under section 12(h) of the 

Exchange Act exempting Fidus SBIC 

from the reporting requirements of 

section 13(a) of the Exchange Act. 

19. Section 12(h) of the Exchange Act 

provides that the Commission may 

exempt an issuer from section 13 of the 

Exchange Act if the Commission finds 

that by reason of the number of public 

investors, amount of trading interest in 

the securities, the nature and extent of 

the activities of the issuer, income or 

assets of the issuer, or otherwise, that 

such action is not inconsistent with the 

public interest or the protection of 

investors. Fidus SBIC has only one 

investor, which is itself a reporting 

company, and no public investors. 

There will be no trading in Fidus SBIC 

securities, so no public interest or 

investor protective purpose will be 

served by separate Fidus SBIC reporting. 

Further, applicants state that the nature 

and extent of Fidus SBIC’s activities are 

such that its activities will be fully 

reported through consolidated reporting 

in accordance with normal accounting 

rules. Accordingly, applicants believe 

that the requested exemption meets the 

standards of section 12(h) of the 

Exchange Act. 

Applicants’ Conditions 

Applicants agree that the requested 

order will be subject to the following 

conditions: 

1. The Company will at all times own 

and hold, beneficially and of record, all 

of the outstanding limited partnership 

interests in Fidus SBIC and all of the 

outstanding membership interests in the 

New General Partner, or otherwise own 

and hold beneficially all of the 

outstanding voting securities and equity 

interests of Fidus SBIC. 

2. Fidus SBIC will have investment 

policies not inconsistent with those of 

the Company, as set forth in the 

Company’s registration statement. 

3. No person shall serve as a member 

of the Fidus SBIC Board unless such 

person shall also be a member of the 

Company’s Board. The Fidus SBIC 

Board will be appointed by the equity 

owners of Fidus SBIC. 

4. The Company will not itself issue 

or sell any senior security and the 

Company will not cause or permit Fidus 

SBIC to issue or sell any senior security 

of which the Company or Fidus SBIC is 

the issuer except to the extent permitted 

by section 18 (as modified for BDCs by 

section 61); provided that immediately 

after the issuance or sale of any such 

senior security by either the Company 

or Fidus SBIC, the Company and Fidus 

SBIC on a consolidated basis, and the 

Company individually, shall have the 

asset coverage required by section 18(a) 

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

determining whether the Company and 

Fidus SBIC on a consolidated basis have 

the asset coverage required by section 

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

senior securities representing 

indebtedness of Fidus SBIC 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. 

5. The Company will acquire 

securities of Fidus SBIC representing 

indebtedness only if, in each case, the 

prior approval of the SBA has been 

obtained. In addition, the Company and 

Fidus SBIC will purchase and sell 

portfolio securities between themselves 

only if, in each case, the prior approval 

of the SBA has been obtained. 

6. No person shall serve or act as 

investment adviser to Fidus SBIC unless 

the Board and the stockholders of the 

Company shall have taken such action 

with respect thereto that is required to 

be taken pursuant to the Act by the 

functional equivalent of the Fidus SBIC 

Board and the equity holders of Fidus 

SBIC. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5515 Filed 3–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66495/March 1, 2012] 

Order Making Fiscal Year 2012 MidYear Adjustments to Transaction Fee 

Rates 

I. Background 

Section 31 of the Securities Exchange 

Act of 1934 (‘‘Exchange Act’’) requires 

each national securities exchange and 

national securities association to pay 

transaction fees to the Commission.1

Specifically, Section 31(b) requires each 

national securities exchange to pay to 

the Commission fees based on the 

aggregate dollar amount of sales of 

certain securities transacted on the 

exchange.2 Section 31(c) requires each 

national securities association to pay to 

the Commission fees based on the 

aggregate dollar amount of sales of 

certain securities transacted by or 

through any member of the association 

other than on an exchange.3

Section 31 of the Exchange Act 

requires the Commission to annually 

adjust the fee rates applicable under 

Sections 31(b) and (c) to a uniform 

adjusted rate, and in some 

circumstances, to also make a mid-year 

adjustment. The Dodd-Frank Act 

amendments to Section 31 of the 

Exchange Act establish a new method 

for annually adjusting the fee rates 

applicable under Sections 31(b) and (c) 

of the Exchange Act. Specifically, the 

Commission must now adjust the fee 

rates to a uniform adjusted rate that is 

reasonably likely to produce aggregate 

fee collections (including assessments 

on security futures transactions) equal 

to the regular appropriation to the 

Commission for the applicable fiscal 

year.4 For fiscal year 2012, the regular 


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