Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 7647 

1Applicants request that the relief apply to 

applicants, as well as to any future Series and any 

other existing or future registered open-end 

management investment company or series thereof 

that is advised by the Adviser, uses the multimanager structure described in the application, and 

complies with the terms and conditions of the 

application (‘‘Subadvised Series’’). All registered 

open-end investment companies that currently 

intend to rely on the requested order are named as 

applicants. Any entity that relies on the requested 

order will do so only in accordance with the terms 

and conditions contained in the application. If the 

name of any Subadvised Series contains the name 

of a sub-adviser, then the name of the Adviser that 

serves as the primary adviser to the Subadvised 

Series, or a trademark or trade name that is owned 

by or publicly used to identify that Adviser, will 

precede the name of the sub-adviser. 

2Each Adviser is, or will be, registered with the 

Commission as an investment adviser under the 

Advisers Act. For purposes of the requested order, 

‘‘successor’’ is limited to an entity that results from 

a reorganization into another jurisdiction or a 

change in the type of business organization. 

3The term ‘‘Board’’ also includes the board of 

trustees or directors of a future Subadvised Series. 

4A ‘‘Sub-Adviser’’ for a Subadvised Series is (a) 

an indirect or direct ‘‘wholly-owned subsidiary’’ (as 

such term is defined in the Act) of the Adviser for 

that Series; (b) a sister company of the Adviser for 

that Series that is an indirect or direct ‘‘whollyowned subsidiary’’ (as such term is defined in the 

Act) of the same company that, indirectly or 

directly, wholly owns the Adviser (each of (a) and 

(b), a ‘‘Wholly-Owned Sub-Adviser’’ and 

collectively, the ‘‘Wholly-Owned Sub-Advisers’’), 

or (c) an investment sub-adviser for that Series that 

is not an ‘‘affiliated person’’ (as such term is defined 

in section 2(a)(3) of the Act) of the Series or the 

Adviser, except to the extent that an affiliation 

arises solely because the sub-adviser serves as a 

Continued 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642, on February 4, 2015, it filed with 

the Postal Regulatory Commission a 

Request of the United States Postal 

Service to Add Priority Mail 

International Regional Rate Boxes 

Contracts to the Competitive Products 

List, and Notice of Filing (Under Seal) 

of Contract and Application for NonPublic Treatment of Materials Filed 

Under Seal. Documents are available at 

www.prc.gov, Docket Nos. MC2015–31 

and CP2015–40. 

Stanley F. Mires, 

Attorney, Federal Requirements. 

[FR Doc. 2015–02742 Filed 2–10–15; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31447; File No. 812–14351] 

The Saratoga Advantage Trust and 

James Alpha Management, LLC; 

Notice of Application 

February 5, 2015. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application under 

section 6(c) of the Investment Company 

Act of 1940 (‘‘Act’’) for an exemption 

from section 15(a) of the Act and rule 

18f–2 under the Act, as well as from 

certain disclosure requirements. 

Summary of Application: Applicants 

request an order that would permit them 

to enter into and materially amend 

subadvisory agreements with WhollyOwned Sub-Advisers (as defined below) 

and non-affiliated sub-advisers without 

shareholder approval and would grant 

relief from certain disclosure 

requirements. 

Applicants: The Saratoga Advantage 

Trust (‘‘Trust’’), and James Alpha 

Management, LLC (‘‘Adviser’’). 

DATES: Filing Dates: The application was 

filed on August 19, 2014, and amended 

on December 12, 2014 and on January 

23, 2015. 

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 2, 2015, 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 Street 

NE., Washington, DC 20549–1090. 

Applicants: Michael W. Mundt, 

Stradley, Ronon Stevens & Young, 2600 

One Commerce Square, Philadelphia, 

PA 19103–7098. 

FOR FURTHER INFORMATION CONTACT: 

Emerson S. Davis, Senior Counsel, at 

(202) 551–6868, or Daniele Marchesani, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

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 Trust is organized as a 

Delaware statutory trust and is 

registered under the Act as an open-end 

management investment company. The 

Trust currently consists of fifteen series 

(‘‘Series’’), each with its own distinct 

investment objective, policies and 

restrictions. The Adviser is a Delaware 

limited liability company and is 

registered as an investment adviser 

under the Investment Advisers Act of 

1940 (‘‘Advisers Act’’).1

2. Each Series has or will have, as its 

investment adviser, the Adviser, or an 

entity controlling, controlled by or 

under common control with the Adviser 

or its successors (included in the term, 

the ‘‘Adviser’’).2 The Adviser serves or 

will serve as the investment adviser to 

each Subadvised Series (as defined 

below) pursuant to an investment 

advisory agreement with the Trust 

(‘‘Investment Management Agreement’’). 

Each Investment Management 

Agreement has been or will be approved 

by the board of trustees of the Trust 

(‘‘Board’’),3 including a majority of the 

members of the Board who are not 

‘‘interested persons,’’ as defined in 

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

Subadvised Series or the Adviser 

(‘‘Independent Board Members’’) and by 

the shareholders of the relevant 

Subadvised Series as required by 

sections 15(a) and 15(c) of the Act and 

rule 18f–2 thereunder. The terms of the 

Investment Management Agreements 

comply or will comply with section 

15(a) of the Act. 

3. Under the terms of each Investment 

Management Agreement, the Adviser, 

subject to the supervision of the Board, 

will provide continuous investment 

management of the assets of each Series. 

The Adviser will periodically review a 

Series’ investment policies and 

strategies, and based on the need of a 

particular Series may recommend 

changes to the investment policies and 

strategies of the Series for consideration 

by the Board. For its services to each 

Series under the applicable Investment 

Management Agreement, the Adviser 

will receive an investment management 

fee from that Series. Each Investment 

Management Agreement provides or 

will provide that the Adviser may, 

subject to the approval of the Board, 

including a majority of the Independent 

Board Members, and the shareholders of 

the applicable Subadvised Series (if 

required), delegate portfolio 

management responsibilities of all or a 

portion of the assets of a Subadvised 

Series to one or more Sub-Advisers.4


tkelley on DSK3SPTVN1PROD with NOTICES
7648 Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 

sub-adviser to one or more Series (each, a ‘‘NonAffiliated Sub-Adviser’’). 

5Shareholder approval will continue to be 

required for any other sub-adviser changes and 

material amendments to an existing sub-advisory 

agreement with any sub-adviser other than a NonAffiliated Sub-Adviser or a Wholly-Owned SubAdviser (all such changes referred to as ‘‘Ineligible 

Sub-Adviser Changes’’), except as otherwise 

permitted by applicable law or by rule. 

6A ‘‘Multi-manager Notice’’ will be modeled on 

a Notice of Internet Availability as defined in rule 

14a–16 under the Securities Exchange Act of 1934 

(‘‘Exchange Act’’), and specifically will, among 

other things: (a) summarize the relevant information 

regarding the new Sub-Adviser (except as modified 

to permit Aggregate Fee Disclosure (as defined 

below); (b) inform shareholders that the Multimanager Information Statement is available on a 

Web site; (c) provide the Web site address; (d) state 

the time period during which the Multi-manager 

Information Statement will remain available on that 

Web site; (e) provide instructions for accessing and 

printing the Multi-manager Information Statement; 

and (f) instruct the shareholder that a paper or 

email copy of the Multi-manager Information 

Statement may be obtained, without charge, by 

contacting the Subadvised Series. A ‘‘Multimanager Information Statement’’ will meet the 

requirements of Regulation 14C, Schedule 14C and 

Item 22 of Schedule 14A under the Exchange Act 

for an information statement, except as modified by 

the order to permit Aggregate Fee Disclosure. Multimanager Information Statements will be filed with 

the Commission via the EDGAR system. 

4. Applicants request an order to 

permit the Adviser, subject to the 

approval of the Board of the relevant 

Subadvised Series, including a majority 

of the Independent Board Members, to, 

without obtaining shareholder approval: 

(i) select Sub-Advisers to manage all or 

a portion of the assets of a Series and 

enter into Sub-Advisory Agreements (as 

defined below) with the Sub-Advisers, 

and (ii) materially amend Sub-Advisory 

Agreements with the Sub-Advisers.5

The requested relief will not extend to 

any sub-adviser, other than a WhollyOwned Sub-Adviser, who is an 

affiliated person, as defined in section 

2(a)(3) of the Act, of the Subadvised 

Series, the Trust, or of the Adviser, 

other than by reason of serving as a subadviser to one or more of the 

Subadvised Series (‘‘Affiliated SubAdviser’’). 

5. Pursuant to each Investment 

Management Agreement, the Adviser 

has overall responsibility for the 

management and investment of the 

assets of each Subadvised Series. These 

responsibilities include recommending 

the removal or replacement of SubAdvisers, determining the portion of 

that Subadvised Series’ assets to be 

managed by any given Sub-Adviser and 

reallocating those assets as necessary 

from time to time. 

6. The Adviser may enter into subadvisory agreements with various SubAdvisers (‘‘Sub-Advisory Agreements’’) 

to provide investment management 

services to the Subadvised Series. The 

terms of each Sub-Advisory Agreement 

comply or will comply fully with the 

requirements of section 15(a) of the Act 

and have been or will be approved by 

the Board, including a majority of the 

Independent Board Members and the 

initial shareholder of the applicable 

Subadvised Series, in accordance with 

sections 15(a) and 15(c) of the Act and 

rule 18f–2 thereunder. The SubAdvisers, subject to the supervision of 

the Adviser and oversight of the Board, 

will determine the securities and other 

investments to be purchased, sold or 

entered into by a Subadvised Series and 

place orders with brokers or dealers that 

they select, or direct the Adviser to 

place such orders. The Adviser will 

compensate each Sub-Adviser out of the 

fee from the relevant Subadvised Series 

to the Adviser under the applicable 

Investment Management Agreement. A 

Subadvised Series also may pay 

advisory fees directly to a Sub-Adviser. 

7. Subadvised Series will inform 

shareholders of the hiring of a new SubAdviser pursuant to the following 

procedures (‘‘Modified Notice and 

Access Procedures’’): (a) within 90 days 

after a new Sub-Adviser is hired for any 

Subadvised Series, that Subadvised 

Series will send its shareholders either 

a Multi-manager Notice or a Multimanager Notice and Multi-manager 

Information Statement;6 and (b) the 

Subadvised Series will make the Multimanager Information Statement 

available on the Web site identified in 

the Multi-manager Notice no later than 

when the Multi-manager Notice (or 

Multi-manager Notice and Multimanager Information Statement) is first 

sent to shareholders, and will maintain 

it on that Web site for at least 90 days. 

In the circumstances described in the 

application, a proxy solicitation to 

approve the appointment of new SubAdvisers provides no more meaningful 

information to shareholders than the 

proposed Multi-manager Information 

Statement. Applicants state that each 

Board would comply with the 

requirements of sections 15(a) and 15(c) 

of the Act before entering into or 

amending Sub-Advisory Agreements. 

8. Applicants also request an order 

exempting the Subadvised Series from 

certain disclosure obligations that may 

require each Subadvised Series to 

disclose fees paid by the Adviser to each 

Sub-Adviser. Applicants seek relief to 

permit each Subadvised Series to 

disclose (as a dollar amount and a 

percentage of the Subadvised Series’ net 

assets): (a) the aggregate fees paid to the 

Adviser and any Wholly-Owned SubAdvisers; (b) the aggregate fees paid to 

Non-Affiliated Sub-Advisers; and (c) the 

fee paid to each Affiliated Sub-Adviser 

(collectively, the ‘‘Aggregate Fee 

Disclosure’’). 

Applicants’ Legal Analysis 

1. Section 15(a) of the Act states, in 

part, that it is unlawful for any person 

to act as an investment adviser to a 

registered investment company ‘‘except 

pursuant to a written contract, which 

contract, whether with such registered 

company or with an investment adviser 

of such registered company, has been 

approved by the vote of a majority of the 

outstanding voting securities of such 

registered company.’’ Rule 18f–2 under 

the Act provides that each series or class 

of stock in a series investment company 

affected by a matter must approve that 

matter if the Act requires shareholder 

approval. 

2. Form N–1A is the registration 

statement used by open-end investment 

companies. Item 19(a)(3) of Form N–1A 

requires a registered investment 

company to disclose in its statement of 

additional information the method of 

computing the ‘‘advisory fee payable’’ 

by the investment company, including 

the total dollar amounts that the 

investment company ‘‘paid to the 

adviser (aggregated with amounts paid 

to affiliated advisers, if any), and any 

advisers who are not affiliated persons 

of the adviser, under the investment 

advisory contract for the last three fiscal 

years.’’ 

3. Rule 20a–1 under the Act requires 

proxies solicited with respect to a 

registered investment company to 

comply with Schedule 14A under the 

Exchange Act. Items 22(c)(1)(ii), 

22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 

Schedule 14A, taken together, require a 

proxy statement for a shareholder 

meeting at which the advisory contract 

will be voted upon to include the ‘‘rate 

of compensation of the investment 

adviser,’’ the ‘‘aggregate amount of the 

investment adviser’s fee,’’ a description 

of the ‘‘terms of the contract to be acted 

upon,’’ and, if a change in the advisory 

fee is proposed, the existing and 

proposed fees and the difference 

between the two fees. 

4. Regulation S–X sets forth the 

requirements for financial statements 

required to be included as part of a 

registered investment company’s 

registration statement and shareholder 

reports filed with the Commission. 

Sections 6–07(2)(a), (b), and (c) of 

Regulation S–X require a registered 

investment company to include in its 

financial statement information about 

the investment advisory fees. 

5. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction or any 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 7649 

7Applicants will only comply with conditions 7, 

8, 9 and 12 if they rely on the relief that would 

allow them to provide Aggregate Fee Disclosure. 

class or classes of persons, securities, or 

transactions from any provisions of the 

Act, or from any rule thereunder, if 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 their requested relief meets 

this standard for the reasons discussed 

below. 

6. Applicants assert that the 

shareholders expect the Adviser, subject 

to the review and approval of the Board, 

to select the Sub-Advisers who are in 

the best position to achieve the 

Subadvised Series’ investment 

objective. Applicants assert that, from 

the perspective of the shareholder, the 

role of the Sub-Advisers is substantially 

equivalent to the role of the individual 

portfolio managers employed by an 

investment adviser to a traditional 

investment company. Applicants 

believe that permitting the Adviser to 

perform the duties for which the 

shareholders of the Subadvised Series 

are paying the Adviser the selection, 

supervision and evaluation of the SubAdvisers without incurring unnecessary 

delays or expenses is appropriate in the 

interest of the Subadvised Series’ 

shareholders and will allow such 

Subadvised Series to operate more 

efficiently. Applicants state that each 

Investment Management Agreement will 

continue to be fully subject to section 

15(a) of the Act and rule 18f–2 under 

the Act and approved by the Board, 

including a majority of the Independent 

Board Members, in the manner required 

by sections 15(a) and 15(c) of the Act. 

Applicants are not seeking an 

exemption with respect to the 

Investment Management Agreements. 

7. Applicants assert that disclosure of 

the individual fees that the Adviser 

would pay to the Sub-Advisers of 

Subadvised Series that operate under 

the multi-manager structure described 

in the application would not serve any 

meaningful purpose. Applicants 

contend that the primary reasons for 

requiring disclosure of individual fees 

paid to Sub-Advisers are to inform 

shareholders of expenses to be charged 

by a particular Subadvised Series and to 

enable shareholders to compare the fees 

to those of other comparable investment 

companies. Applicants believe that the 

requested relief satisfies these objectives 

because the advisory fee paid to the 

Adviser will be fully disclosed and, 

therefore, shareholders will know what 

the Subadvised Series’ fees and 

expenses are and will be able to 

compare the advisory fees a Subadvised 

Series is charged to those of other 

investment companies. Applicants 

assert that the requested disclosure 

relief would benefit shareholders of the 

Subadvised Series because it would 

improve the Adviser’s ability to 

negotiate the fees paid to Sub-Advisers. 

Applicants state that the Adviser may be 

able to negotiate rates that are below a 

Sub-Adviser’s ‘‘posted’’ amounts if the 

Adviser is not required to disclose the 

Sub-Advisers’ fees to the public. 

Applicants submit that the relief 

requested to use Aggregate Fee 

Disclosure will encourage Sub-Advisers 

to negotiate lower subadvisory fees with 

the Adviser if the lower fees are not 

required to be made public. 

8. For the reasons discussed above, 

applicants submit that the requested 

relief meets the standards for relief 

under section 6(c) of the Act. Applicants 

state that the operation of the 

Subadvised Series in the manner 

described in the application must be 

approved by shareholders of a 

Subadvised Series before that 

Subadvised Series may rely on the 

requested relief. In addition, applicants 

state that the proposed conditions to the 

requested relief are designed to address 

any potential conflicts of interest, 

including any posed by the use of 

Wholly-Owned Sub-Advisers, and 

provide that shareholders are informed 

when new Sub-Advisers are hired. 

Applicants assert that conditions 6, 10 

and 11 are designed to provide the 

Board with sufficient independence and 

the resources and information it needs 

to monitor and address any conflicts of 

interest with affiliated persons of the 

Adviser, including Wholly-Owned SubAdvisers. Applicants state that, 

accordingly, they believe the requested 

relief 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’ Conditions 

Applicants agree that any order 

granting the requested relief will be 

subject to the following conditions:7

1. Before a Subadvised Series may 

rely on the order requested in the 

application, the operation of the 

Subadvised Series in the manner 

described in the application, including 

the hiring of Wholly-Owned SubAdvisers, will be, or has been, approved 

by a majority of the Subadvised Series’ 

outstanding voting securities as defined 

in the Act, or, in the case of a new 

Subadvised Series whose public 

shareholders purchase shares on the 

basis of a prospectus containing the 

disclosure contemplated by condition 2 

below, by the sole initial shareholder 

before offering the Subadvised Series’ 

shares to the public. 

2. The prospectus for each 

Subadvised Series will disclose the 

existence, substance, and effect of any 

order granted pursuant to the 

application. Each Subadvised Series 

will hold itself out to the public as 

employing the multi-manager structure 

described in the application. Each 

prospectus will prominently disclose 

that the Adviser has the ultimate 

responsibility, subject to oversight by 

the Board, to oversee the Sub-Advisers 

and recommend their hiring, 

termination and replacement. 

3. The Adviser will provide general 

management services to a Subadvised 

Series, including overall supervisory 

responsibility for the general 

management and investment of the 

Subadvised Series’ assets. Subject to 

review and approval of the Board, the 

Adviser will (a) set a Subadvised Series’ 

overall investment strategies, (b) 

evaluate, select, and recommend SubAdvisers to manage all or a portion of 

a Subadvised Series’ assets, and (c) 

implement procedures reasonably 

designed to ensure that Sub-Advisers 

comply with a Subadvised Series’ 

investment objective, policies and 

restrictions. Subject to review by the 

Board, the Adviser will (a) when 

appropriate, allocate and reallocate a 

Subadvised Series’ assets among 

multiple Sub-Advisers; and (b) monitor 

and evaluate the performance of SubAdvisers. 

4. A Subadvised Series will not make 

any Ineligible Sub-Adviser Changes 

without the approval of the 

shareholders of the applicable 

Subadvised Series. 

5. Subadvised Series will inform 

shareholders of the hiring of a new SubAdviser within 90 days after the hiring 

of the new Sub-Adviser pursuant to the 

Modified Notice and Access Procedures. 

6. At all times, at least a majority of 

the Board will be Independent Board 

Members, and the selection and 

nomination of new or additional 

Independent Board Members will be 

placed within the discretion of the thenexisting Independent Board Members. 

7. Independent Legal Counsel, as 

defined in rule 0–1(a)(6) under the Act, 

will be engaged to represent the 

Independent Board Members. The 

selection of such counsel will be within 

the discretion of the then-existing 

Independent Board Members. 

8. The Adviser will provide the 

Board, no less frequently than quarterly, 

with information about the profitability 


tkelley on DSK3SPTVN1PROD with NOTICES
7650 Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 

1As defined in section 2(a)(43) of the Act, a 

‘‘wholly-owned subsidiary’’ of a person means a 

company 95% or more of the outstanding voting 

securities of which are owned by such person, or 

by a company which, within the meaning of this 

paragraph, is a wholly-owned subsidiary of such 

person. 

of the Adviser on a per Subadvised 

Series basis. The information will reflect 

the impact on profitability of the hiring 

or termination of any sub-adviser during 

the applicable quarter. 

9. Whenever a sub-adviser is hired or 

terminated, the Adviser will provide the 

Board with information showing the 

expected impact on the profitability of 

the Adviser. 

10. Whenever a sub-adviser change is 

proposed for a Subadvised Series with 

an Affiliated Sub-Adviser or a WhollyOwned Sub-Adviser, the Board, 

including a majority of the Independent 

Board Members, will make a separate 

finding, reflected in the Board minutes, 

that such change is in the best interests 

of the Subadvised Series and its 

shareholders, and does not involve a 

conflict of interest from which the 

Adviser or the Affiliated Sub-Adviser or 

Wholly-Owned Sub-Adviser derives an 

inappropriate advantage. 

11. No director, trustee or officer of a 

Subadvised Series, or partner, director, 

manager or officer of the Adviser, will 

own directly or indirectly (other than 

through a pooled investment vehicle 

that is not controlled by such person), 

any interest in a Sub-Adviser, except for 

(a) ownership of interests in the Adviser 

or any entity, other than a WhollyOwned Sub-Adviser, that controls, is 

controlled by, or is under common 

control with the Adviser, or (b) 

ownership of less than 1% of the 

outstanding securities of any class of 

equity or debt of a publicly traded 

company that is either a Sub-Adviser or 

an entity that controls, is controlled by, 

or is under common control with a SubAdviser. 

12. Each Subadvised Series will 

disclose the Aggregate Fee Disclosure in 

its registration statement. 

13. In the event the Commission 

adopts a rule under the Act providing 

substantially similar relief to that 

requested in the application, the 

requested order will expire on the 

effective date of that rule. 

14. Any new Sub-Advisory 

Agreement or any amendment to a 

Subadvised Series’ existing Investment 

Management Agreement or SubAdvisory Agreement that directly or 

indirectly results in an increase in the 

aggregate advisory rate payable by the 

Subadvised Series will be submitted to 

the Subadvised Series’ shareholders for 

approval. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02745 Filed 2–10–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31448; File No. 812–14407] 

NexPoint Credit Strategies Fund, et al.; 

Notice of Application 

February 5, 2015. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 17(b) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) granting an exemption from 

section 17(a) of the Act, and under 

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

1 thereunder permitting certain joint 

transactions. 

APPLICANTS: NexPoint Credit Strategies 

Fund (‘‘NHF’’), NexPoint Residential 

Trust, Inc. (‘‘NXRT REIT’’), Freedom 

REIT, LLC (‘‘Freedom REIT’’) (each, a 

‘‘Fund,’’ and together, the ‘‘Funds’’), 

NexPoint Advisors, L.P. (‘‘NHF 

Adviser’’), and NexPoint Real Estate 

Advisors, L.P. (‘‘NXRT Adviser’’) (each, 

an ‘‘Adviser,’’ and together, the 

‘‘Advisers’’), NexPoint Residential Trust 

Operating Partnership, L.P. (‘‘NXRT 

OP’’), and NexPoint Residential Merger 

Company, LLC (‘‘NXRT LLC’’) 

(collectively, the ‘‘Applicants’’). 

SUMMARY: Summary of Application: 

Applicants seek an order to permit NHF 

to transfer certain real estate assets (the 

‘‘Multifamily Properties’’) held by 

Freedom REIT, NHF’s wholly-owned 

subsidiary, to NXRT REIT, a real estate 

investment trust (‘‘REIT’’) and NHF’s 

wholly-owned subsidiary, in exchange 

for NXRT REIT common stock; to permit 

NHF to distribute such common stock to 

NHF’s shareholders; and to permit 

NXRT Adviser to enter into an 

investment advisory agreement with 

NXRT REIT. 

DATES: Filing Dates: The application was 

filed on December 22, 2014 and 

amended on February 4, 2015. 

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 February 25, 2015 and 

should be accompanied by proof of 

service on the 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 Street 

NE., Washington, DC 20549–1090. The 

Applicants: c/o David J. Harris, Esq., 

and Thomas J. Friedmann, Esq., Dechert 

LLP, 1900 K Street NW., Washington, 

DC 20006–6808. 

FOR FURTHER INFORMATION CONTACT: Anil 

K. Abraham, Senior Special Counsel, at 

(202) 551–2614, or James M. Curtis, 

Branch Chief, at (202) 551–6712 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

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. NHF was organized as a Delaware 

statutory trust and is registered under 

the Act as a non-diversified, closed-end 

management investment company. NHF 

has elected to be treated as a regulated 

investment company (‘‘RIC’’) under 

Subchapter M of the Internal Revenue 

Code of 1986, as amended (the ‘‘Code’’). 

NHF’s investment objectives are to 

provide both current income and capital 

appreciation, which it seeks to achieve 

by investing primarily in bonds and 

other debt obligations, including belowinvestment grade debt obligations, and 

equity. 

2. Freedom REIT, a direct, whollyowned subsidiary 1 of NHF, was 

organized on October 12, 2012 as a 

Delaware limited liability company and 

subsequently elected to be treated as a 

REIT under section 856 of the Code. 

Freedom REIT is considered a single 

investment for purposes of determining 


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