1446 Federal Register / Vol. 87, No. 7 / Tuesday, January 11, 2022 / Notices 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 17f–1(c) (17 CFR 240.17f–1(c) and 

Form X–17F–1A (17 CFR 249.100) 

under the Securities Exchange Act of 

1934 (15 U.S.C. 78a et seq.). 

Rule 17f–1(c) requires approximately 

10,100 entities in the securities industry 

to report lost, stolen, missing, or 

counterfeit securities certificates to the 

Commission or its designee, to a 

registered transfer agent for the issue, 

and, when criminal activity is 

suspected, to the Federal Bureau of 

Investigation. Such entities are required 

to use Form X–17F–1A to make such 

reports. Filing these reports fulfills a 

statutory requirement that reporting 

institutions report and inquire about 

missing, lost, counterfeit, or stolen 

securities. Since these reports are 

compiled in a central database, the rule 

facilitates reporting institutions to 

access the database that stores 

information for the Lost and Stolen 

Securities Program. 

We estimate that 10,100 reporting 

institutions will report that securities 

certificates are either missing, lost, 

counterfeit, or stolen annually and that 

each reporting institution will submit 

this report 30 times each year. The staff 

estimates that the average amount of 

time necessary to comply with Rule 

17f–1(c) and Form X17F–1A is five 

minutes per submission. The total 

burden is approximately 25,250 hours 

annually for the entire industry (10,100 

times 30 times 5 divided by 60). 

Rule 17f–1(c) is a reporting rule and 

does not specify a retention period. The 

rule requires an incident-based 

reporting requirement by the reporting 

institutions when securities certificates 

are discovered to be missing, lost, 

counterfeit, or stolen. Registering under 

Rule 17f–1(c) is mandatory to obtain the 

benefit of a central database that stores 

information about missing, lost, 

counterfeit, or stolen securities for the 

Lost and Stolen Securities Program. 

Reporting institutions required to 

register under Rule 17f–1(c) will not be 

kept confidential; however, the Lost and 

Stolen Securities Program database will 

be kept confidential. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to (i) www.reginfo.gov/public/do/ 

PRAMain and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o John R. Pezzullo, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: January 5, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00254 Filed 1–10–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34465; File No. 812–15190] 

HPS Corporate Lending Fund, et al. 

January 5, 2022. 

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 certain 

business development companies and 

closed-end management investment 

companies to co-invest in portfolio 

companies with each other and with 

affiliated investment funds. 

APPLICANTS: HPS Corporate Lending 

Fund (‘‘HPS Fund’’); HPS Investment 

Partners, LLC (‘‘HPS’’); Brickyard Direct 

Lending Fund, L.P.; Core Senior 

Lending Fund (A–A), L.P.; Core Senior 

Lending Fund, L.P.; HPS DPT Direct 

Lending Fund, L.P.; Hinode Direct 

Lending 2017 Fund, L.P.; Kitty Hawk 

Credit Fund, L.P.; HPS Investment 

Partners (UK) LLP; HPS Investment 

Partners (HK), Limited; HPS 

Investments Partners (AUS) Pty Ltd.; 

HPS ALSC Management, LLC; HPS 

Mezzanine Partners, LLC; HPS 

Mezzanine Partners II, LLC; HPS 

Mezzanine Management III, LLC; HPS 

Mezzanine Management 2019, LLC; HPS 

Opportunities SL Management, LLC; 

HPS RE Management, LLC; HPS 

Investment Partners CLO (US), LLC; 

HPS Investment Partners CLO (UK) LLP; 

HPS EF GP, LLC; HPS EL SLF 2016 GP, 

LLC; CGC, LLC; CGC III Partners LLC; 

Core Senior Lending Master Fund (PB), 

L.P.; HPS Core Senior Lending Portfolio 

(PB) II, L.P.; Credit Value Master Fund 

2016, L.P.; Credit Value Master Fund V, 

L.P.; Credit Value Ontario Fund V, L.P.; 

Credit Value Master Fund VI, L.P.; 

European Asset Value Fund (USD) II, 

L.P.; European Asset Value Offshore 

Fund (USD) II, L.P.; European Asset 

Value Offshore Fund II, L.P.; HPS 

European Liquid Loan Opportunities 

Master Fund, L.P.; HPS Mezzanine 

Partners 2019, L.P.; HPS Offshore 

Mezzanine Partners 2019 Co-Invest, 

L.P.; HPS Offshore Mezzanine Partners 

2019 Europe, SCSp; HPS Offshore 

Mezzanine Partners 2019, L.P.; HPS 

Special Situations Opportunity Fund, 

L.P.; HPS Special Situations 

Opportunity Offshore Fund, L.P.; HPS 

Specialty Loan Europe Fund V, SCSp; 

HPS Specialty Loan Fund (JPY) V, L.P.; 

HPS Specialty Loan Fund V, L.P.; HPS 

Specialty Loan Fund V–L, L.P.; HPS 

Specialty Loan International Fund V, 

SCSp; HPS Specialty Loan International 

Fund V–L, L.P.; Institutional Credit 

Master Fund, L.P.; Liquid Loan 

Opportunities Master Fund, L.P.; 

Mayfair Alternative Credit Funds ICAV; 

Mezzanine Partners III, L.P.; Offshore 

Mezzanine Partners III Co-Invest, L.P.; 

Offshore Mezzanine Partners III, L.P.; 

Real Estate Credit Solutions Fund II, 

L.P.; Real Estate Credit Solutions 

Offshore Fund II, L.P.; Specialty Loan 

Fund 2016, L.P.; Specialty Loan Fund 

2016–L, L.P.; Specialty Loan 

Institutional Fund 2016–L, L.P.; Aspen 

Co-Invest, L.P.; Bronco Co-Invest, L.P; 

Endurance II Co-Invest, L.P.; Galaxy III 

Co-Invest, L.P.; Milano Co-Invest, L.P.; 

Neptune Co-Invest, L.P.; Patriot CoInvest, L.P.; Aiguilles Rouges Irish 

Specialty Loan Fund plc; Aiguilles 

Rouges Specialty Loan Fund, L.P.; 

Cactus Direct Lending Fund, L.P.; 

Cardinal Fund, L.P.; CST Specialty Loan 

Fund, L.P.; Falcon Credit Fund, L.P.; 

GIM Credit Lux S.A.; GIM Credit Master 

Lux S.a` r.l.; GIM II, L.P.; GIM, L.P.; HC 

Direct Lending Fund, L.P.; HN CoInvestment Fund, L.P.; HPS Core Senior 

Lending Co-Invest, L.P.; HPS Halite 

2020 Direct Lending Fund Limited; HPS 

KP Mezz 2019 Co-Invest, L.P.; HPS 

Magnetite Energy & Power Credit Fund, 

L.P.; HPS Magnetite Energy & Power 

Credit Offshore Fund, L.P.; HPS Ocoee 

Specialty Loan Fund, L.P.; HPS OH CoInvestment Fund, L.P.; HPS PA CoVerDate Sep<11>2014 20:22 Jan 10, 2022 Jkt 256001 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 E:\FR\FM\11JAN1.SGM 11JAN1

khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 7 / Tuesday, January 11, 2022 / Notices 1447 

1HPS Fund filed a Form N–54A on January 3, 

2022. See https://www.sec.gov/Archives/edgar/ 

data/1838126/000114036122000146/0001140361- 

22-000146-index.htm. Section 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. 

2 ‘‘Objectives and Strategies’’ means the 

investment objectives and strategies of a Regulated 

Entity (as defined below), as described in the 

Regulated Entity’s registration statement, other 

filings the Regulated Entity has made with the 

Commission under the Securities Act of 1933 (the 

‘‘Securities Act’’), or under the Securities Exchange 

Act of 1934, and the Regulated Entity’s reports to 

shareholders. 

3 ‘‘Board’’ means the board of directors or 

equivalent of any Regulated Entity. 

4 ‘‘Independent Trustees’’ means, with respect to 

any Board, the directors or trustees who are not 

‘‘interested persons’’ within the meaning of section 

2(a)(19) of the Act. 

5 ‘‘Regulated Entity’’ means HPS Fund and any 

Future Regulated Entity. ‘‘Future Regulated Entity’’ 

means any closed-end management investment 

company formed in the future that is registered 

under the 1940 Act or any closed-end management 

investment company that has elected to be 

regulated as a BDC, whose investment adviser is an 

Adviser, and that intends to participate in the coinvestment program described in the application. 

‘‘Adviser’’ means any Existing Adviser and any 

Future Adviser. ‘‘Future Adviser’’ means any future 

investment adviser that (i) controls, is controlled by 

or is under common control with HPS, (ii) is 

registered as an investment adviser under the 

Advisers Act, and (iii) is not a Regulated Entity or 

a subsidiary of a Regulated Entity. 

6 ‘‘Affiliated Fund’’ means any Existing Affiliated 

Fund or any Future Affiliated Fund. ‘‘Future 

Affiliated Fund’’ means any investment fund that 

would be an ‘‘investment company’’ but for section 

3(c)(1) or 3(c)(7) of the Act, is formed in the future, 

whose investment adviser is an Adviser, and that 

intends to participate in the co-investment program 

described in the application. No Affiliated Fund is 

or will be a subsidiary of a Regulated Entity. 

Investment Fund, L.P.; HPS RR 

Specialty Loan Fund, L.P.; HPS VG CoInvestment Fund, L.P.; Jade Real Assets 

Fund, L.P.; Mauna Kea Fund, L.P.; 

Moreno Street Direct Lending Fund, 

L.P.; NDT Senior Loan Fund, L.P.; 

Presidio Loan Fund, L.P.; Private Loan 

Opportunities Fund, L.P.; Red Cedar 

Fund 2016, L.P.; Sandlapper Credit 

Fund, L.P.; SC Strategic Investment 

Fund, L.P.; Specialty Loan Fund—CX– 

2, L.P.; Specialty Loan VG Fund, L.P.; 

AP Mezzanine Partners III, L.P.; HPS AP 

Mezzanine Partners 2019, L.P.; HPS 

Hinode Mezzanine Partners 2020, L.P.; 

Specialty Loan Ontario Fund 2016, L.P.; 

EL Specialty Loan Secondary Fund, 

L.P.; HPS Offshore Strategic Investment 

Partners V, L.P.; HPS Strategic 

Investment Partners V, L.P.; HPS AP 

Strategic Investment Partners V, L.P.; 

HPS AD Co-Investment Holdings, L.P.; 

HPS Strategic Investment Management 

V, LLC; HPS Elbe Unlevered Direct 

Lending Fund, SCSp; HPS Specialty 

Loan Ontario Fund V, L.P.; Shelby CoInvest, L.P.; Core Senior Lending Fund 

II, SCSp; Core Senior Lending 

International Fund II, SCSp; HPS 

Offshore Strategic Investment Partners V 

Europe, SCSp; Segovia Loan Advisors 

(UK) LLP; HPS Core Senior Lending 

International Fund (EUR) II, SCSp; HPS 

Specialty Loan Fund (EUR) V, L.P.; 

Proxima Co-Invest, L.P.; Proxima 

Onshore Co-Invest, L.P.; HPS Specialty 

Loan Fund TX, L.P.; Salus Co-Invest, 

L.P.; Credit Value Fund VII, L.P.; Credit 

Value Offshore Fund VII, LP.; HPS Mint 

Co-Invest, L.P.; HPS Special Situations 

Opportunity Fund II, L.P.; HPS 

Specialty Situations Opportunity 

Offshore Fund II; SCSp; Credit Value 

Ontario Fund VII; L.P; HPS Specialty 

Situation Opportunity Fund II; HN SIP 

Co-Investment Fund, L.P.; Core Senior 

Lending Fund II Feeder, L.P; and HPS 

KP SIP V Co-Investment Fund, L.P. 

FILING DATES: The application was filed 

on December 30, 2020, and amended on 

April 21, 2021, August 5, 2021, 

November 5, 2021, and December 23, 

2021. 

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 emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov and serving applicants 

with a copy of the request by email. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on January 

31, 2022, 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 emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov. 

ADDRESSES: 

The Commission: Secretarys-Office@

sec.gov. 

Applicants: Yoohyun K. Choi at 

kathy.choi@hpspartners.com and 

Richard Horowitz, Esq. at 

richard.horowitz@dechert.com. 

FOR FURTHER INFORMATION CONTACT: 

Laura J. Riegel, Senior Counsel, at (202) 

551–3038, or Trace W. Rakestraw, 

Branch Chief, at (202) 551–6825 

(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 

website 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. HPS Fund is a Delaware statutory 

trust that is a non-diversified closed-end 

management investment company that 

has elected to be regulated as a business 

development company (‘‘BDC’’) under 

section 54(a) of the Act.1 HPS Fund’s 

Objectives and Strategies 2 are to 

generate attractive risk adjusted returns, 

predominately in the form of current 

income, with select investments 

exhibiting the ability to capture longterm capital appreciation, by investing 

primarily in newly originated senior 

secured debt and other securities of 

private U.S. companies within the 

middle market and upper middle 

market. The board of trustees (the 

‘‘Board’’) 3 of HPS Fund has five 

members, three of whom are not 

‘‘interested persons’’ of HPS Fund 

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

the Act (‘‘Independent Trustees’’).4

2. HPS, a Delaware limited liability 

company, is registered with the 

Commission as an investment adviser 

under the Investment Advisers Act of 

1940 (‘‘Advisers Act’’). HPS serves as 

the investment adviser to HPS Fund. 

3. The Existing Affiliated Funds are 

the investment funds identified on 

Schedule A to the application. Each 

Existing Affiliated Fund would be an 

investment company but for section 

3(c)(1) or section 3(c)(7) of the Act. 

4. The investment advisory 

subsidiaries and relying advisers of HPS 

identified on Schedule A to the 

application (each such investment 

adviser and HPS, an ‘‘Existing Adviser’’ 

and collectively, the ‘‘Existing 

Advisers’’), serve as investment advisers 

to the respective Existing Affiliated 

Funds. HPS controls the other Existing 

Advisers. 

5. Applicants seek an order (‘‘Order’’) 

to permit a Regulated Entity 5 and one 

or more other Regulated Entities and 

one or more Affiliated Funds 6 to (a) 

participate in the same investment 

opportunities through a proposed coinvestment program where such 

participation would otherwise be 

prohibited under section 17(d) or 

section 57(a)(4) and the rules under the 

Act; and (b) make additional 

investments in securities of such issuers 

(‘‘Follow-On Investments’’), including 

through the exercise of warrants, 

conversion privileges, and other rights 


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1448 Federal Register / Vol. 87, No. 7 / Tuesday, January 11, 2022 / Notices 

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. 

8The term ‘‘Wholly-Owned Investment Sub’’ 

means an entity (a) whose sole business purpose is 

to hold one or more investments on behalf of a 

Regulated Entity (and, in the case of an SBIC 

Subsidiary (as defined below), maintain a license 

under the Small Business Investment Act of 1958, 

as amended (the ‘‘SBA Act’’) and issue debentures 

guaranteed by the Small Business Administration 

(the ‘‘SBA’’); (b) that is wholly-owned by the 

Regulated Entity (with the Regulated Entity at all 

times holding, beneficially and of record, 100% of 

the voting and economic interests); (c) with respect 

to which the Regulated Entity’s Board has the sole 

authority to make all determinations with respect 

to the entity’s participation under the conditions of 

the application; and (d) that would be an 

investment company but for section 3(c)(1) or 

3(c)(7) of the Act. All subsidiaries of the Regulated 

Entity participating in the Co-Investment 

Transactions will be Wholly-Owned Investment 

Subs. The term ‘‘SBIC Subsidiary’’ means a WhollyOwned Investment Sub that is licensed by the SBA 

to operate under the SBA Act as a small business 

investment company (an ‘‘SBIC’’). 

9The Regulated Entities, however, will not be 

obligated to invest, or co-invest, when investment 

opportunities are referred to them. 

10 ‘‘Board-Established Criteria’’ means criteria 

that the Board of the applicable Regulated Entity 

may establish from time to time to describe the 

characteristics of Potential Co-Investment 

Transactions which would be within the Regulated 

Entity’s then-current Objectives and Strategies that 

the applicable Adviser should consider as 

appropriate for the Regulated Entity. If no BoardEstablished Criteria are in effect for a Regulated 

Entity, then such Adviser will consider all Potential 

Co-Investment Transactions that fall within the 

then-current Objectives and Strategies for that 

Regulated Entity. Board-Established Criteria will be 

objective and testable, meaning that they will be 

based on observable information, such as 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 a Regulated Entity may 

from time to time recommend criteria for the 

applicable Board’s consideration, but BoardEstablished Criteria will only become effective if 

approved by a majority of the Independent 

Trustees. The Independent Trustees of a Regulated 

Entity 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. 

11 In the case of a Regulated Entity that is a 

registered fund, the Board members that make up 

the Required Majority will be determined as if the 

Regulated Entity were a BDC subject to section 

57(o). 

to purchase securities of the issuers. 

‘‘Co-Investment Transaction’’ means any 

transaction in which a Regulated Entity 

(or its Wholly-Owned Investment Sub, 

as defined below) participate together 

with one or more other Regulated 

Entities and/or Affiliated Funds in 

reliance on the requested Order. 

‘‘Potential Co-Investment Transaction’’ 

means any investment opportunity in 

which a Regulated Entity (or its WhollyOwned Investment Subs) could not 

participate together with one or more 

other Regulated Entities and/or one or 

more Affiliated Funds without obtaining 

and relying on the Order.7

6. Applicants state that any of the 

Regulated Entities, from time to time, 

form one or more Wholly-Owned 

Investment Subs.8 Such a subsidiary 

would be prohibited from investing in a 

Co-Investment Transaction with any 

other Regulated Entity or Affiliated 

Fund because it would be a company 

controlled by its parent Regulated Entity 

for purposes of section 57(a)(4) and rule 

17d–1. Applicants request that each 

Wholly-Owned Investment Sub be 

permitted to participate in CoInvestment Transactions in lieu of its 

parent Regulated Entity and that the 

Wholly-Owned Investment Sub’s 

participation in any such transaction be 

treated, for purposes of the Order, as 

though the parent Regulated Entity were 

participating directly. Applicants 

represent that this treatment is justified 

because a Wholly-Owned Investment 

Sub would have no purpose other than 

serving as a holding vehicle for the 

Regulated Entity’s investments and, 

therefore, no conflicts of interest could 

arise between the Regulated Entity and 

the Wholly-Owned Investment Sub. The 

Regulated Entity’s Board would make 

all relevant determinations under the 

conditions with regard to a WhollyOwned Investment Sub’s participation 

in a Co-Investment Transaction, and the 

Regulated Entity’s Board would be 

informed of, and take into 

consideration, any proposed use of a 

Wholly-Owned Investment Sub in the 

Regulated Entity’s place. If the 

Regulated Entity proposes to participate 

in the same Co-Investment Transaction 

with any of its Wholly-Owned 

Investment Subs, the Board will also be 

informed of, and take into 

consideration, the relative participation 

of the Regulated Entity and the WhollyOwned Investment Sub. 

7. The Advisers expects that any 

portfolio company that is an appropriate 

investment for a Regulated Entity 

should also be an appropriate 

investment for one or more other 

Regulated Entities and/or one or more 

Affiliated Funds, with certain 

exceptions based on available capital or 

diversification.9 When considering 

Potential Co-Investment Transactions 

for any Regulated Entity, the applicable 

Adviser will consider only the 

Objectives and Strategies, BoardEstablished Criteria,10 investment 

policies, investment positions, capital 

available for investment, and other 

pertinent factors applicable to that 

Regulated Entity. Applicants believe 

that the use of Board-Established 

Criteria for each of the Regulated 

Entities is appropriate based on the 

potential size and scope of HPS’ 

advisory business. Applicants argue that 

in addition to the other protections 

offered by the conditions, using BoardEstablished Criteria in the allocation of 

Potential Co-Investment Transactions 

will further reduce the risk of 

subjectivity in the Adviser’s 

determination of whether an investment 

opportunity is appropriate for a 

Regulated Entity. In connection with the 

Board’s annual review of the continued 

appropriateness of any BoardEstablished Criteria under condition 9, 

the Regulated Entity’s Adviser will 

provide information regarding any CoInvestment Transaction (including, but 

not limited to, Follow-On Investments) 

effected by the Regulated Entity that did 

not fit within the then-current BoardEstablished Criteria. 

8. Other than pro rata dispositions 

and Follow-On Investments as provided 

in conditions 7 and 8, and after making 

the determinations required in 

conditions 1 and 2(a), for each 

Regulated Entity, the applicable Adviser 

will present each Potential CoInvestment Transaction and the 

proposed allocation to the directors or 

trustees of the Board eligible to vote 

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

Trustees’’), and the ‘‘required majority,’’ 

as defined in section 57(o) of the Act 

(‘‘Required Majority’’) 11 will approve 

each Co-Investment Transaction prior to 

any investment by the participating 

Regulated Entity. 

9. With respect to the pro rata 

dispositions and Follow-On Investments 

provided in conditions 7 and 8, a 

Regulated Entity may participate in a 

pro rata disposition or Follow-On 

Investment without obtaining prior 

approval of the Required Majority if, 

among other things: (i) The proposed 

participation of each Regulated Entity 

and each Affiliated Fund in such 

disposition is proportionate to its 

outstanding investments in the issuer 

immediately preceding the disposition 

or Follow-On Investment, as the case 

may be; and (ii) the Board of the 

Regulated Entity has approved that 

Regulated Entity’s participation in pro 

rata dispositions and Follow-On 

Investments as being in the best 

interests of the Regulated Entity. If the 

Board does not so approve, any such 

disposition or Follow-On Investment 

will be submitted to the Regulated 

Entity’s Eligible Trustees. The Board of 

any Regulated Entity may at any time 

rescind, suspend, or qualify its approval 

of pro rata dispositions and Follow-On 


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Federal Register / Vol. 87, No. 7 / Tuesday, January 11, 2022 / Notices 1449 

Investments with the result that all 

dispositions and/or Follow-On 

Investments must be submitted to the 

Eligible Trustees. 

10. No Independent Trustee of a 

Regulated Entity will have a direct or 

indirect financial interest in any CoInvestment Transaction (other than 

indirectly through share ownership in 

one of the Regulated Entities), including 

any interest in any company whose 

securities would be acquired in a CoInvestment Transaction. 

11. Applicants also represent that if 

the Advisers, the principal owners of 

any of the Advisers (the ‘‘Principals’’), 

or any person controlling, controlled by, 

or under common control with the 

Advisers or the Principals, and the 

Affiliated Funds (collectively, the 

‘‘Holders’’) own in the aggregate more 

than 25% of the outstanding voting 

shares of a Regulated Entity (the 

‘‘Shares’’), then the Holders will vote 

such Shares as required under condition 

14. 

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). 

Applicants submit that each of the 

Regulated Entities and Affiliated Funds 

could be deemed to be a person related 

to each Regulated Entity in a manner 

described by section 57(b) by virtue of 

being under common control. Section 

57(i) of the Act provides that, until the 

Commission prescribes rules under 

section 57(a)(4), 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 

section 57(a)(4). Because the 

Commission has not adopted any rules 

under section 57(a)(4), rule 17d–1 also 

applies to joint transactions with 

Regulated Entities that are BDCs. 

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

1 under the Act are applicable to 

Regulated Entities that are registered 

closed-end investment companies. 

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 in the absence 

of the requested relief, the Regulated 

Entities would be, in many 

circumstances, limited in their ability to 

participate in attractive and appropriate 

investment opportunities. Applicants 

believe that the proposed terms and 

conditions will ensure that the CoInvestment Transactions are consistent 

with the protection of each Regulated 

Entity’s shareholders and with the 

purposes intended by the policies and 

provisions of the Act. Applicants state 

that the Regulated Entities’ participation 

in the Co-Investment Transactions will 

be consistent with the provisions, 

policies, and purposes of the Act and on 

a basis that is not different from, or less 

advantageous than, that of other 

participants. 

Applicants’ Conditions 

Applicants agree that the Order will 

be subject to the following conditions: 

1. (a) Each Adviser will establish, 

maintain and implement policies and 

procedures reasonably designed to 

ensure that it identifies for each 

Regulated Entity all Potential CoInvestment Transactions that (i) the 

Adviser considers for any other 

Regulated Entity or Affiliated Fund and 

(ii) fall within the Regulated Entity’s 

then-current Objectives and Strategies 

and Board-Established Criteria. 

(b) When an Adviser identifies a 

Potential Co-Investment Transaction for 

a Regulated Entity under condition 1(a), 

the Adviser will make an independent 

determination of the appropriateness of 

the investment for the Regulated Entity 

in light of the Regulated Entity’s thencurrent circumstances. 

2. (a) If an Adviser deems a Regulated 

Entity’s participation in any Potential 

Co-Investment Transaction to be 

appropriate for the Regulated Entity, the 

Adviser will then determine an 

appropriate level of investment for the 

Regulated Entity. 

(b) If the aggregate amount 

recommended by an Adviser to be 

invested by the applicable Regulated 

Entity in the Potential Co-Investment 

Transaction, together with the amount 

proposed to be invested by the other 

participating Regulated Entities and 

Affiliated Funds, collectively, in the 

same transaction, exceeds the amount of 

the investment opportunity, the 

investment opportunity will be 

allocated among them pro rata based on 

each participant’s capital available for 

investment in the asset class being 

allocated, up to the amount proposed to 

be invested by each. Each Adviser will 

provide the Eligible Trustees of each 

participating Regulated Entity with 

information concerning each 

participating party’s available capital to 

assist the Eligible Trustees with their 

review of the applicable Regulated 

Entity’s investments for compliance 

with these allocation procedures. 

(c) After making the determinations 

required in conditions 1(b) 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 

Entity and each participating Affiliated 

Fund) to the Eligible Trustees of its 

participating Regulated Entity for their 

consideration. A Regulated Entity will 

enter into a Co-Investment Transaction 

with one or more other Regulated 

Entities or Affiliated Funds only if, prior 

to the Regulated Entity’s participation in 

the Potential Co-Investment 

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 Entity and its 

equity holders and do not involve 

overreaching in respect of the Regulated 

Entity or its equity holders on the part 

of any person concerned; 

(ii) the Potential Co-Investment 

Transaction is consistent with: 

(A) The interests of the Regulated 

Entity’s equity holders; and 

(B) the Regulated Entity’s then-current 

Objectives and Strategies; 

(iii) the investment by any other 

Regulated Entities or any Affiliated 

Funds would not disadvantage the 

Regulated Entity, and participation by 

the Regulated Entity would not be on a 

basis different from or less advantageous 

than that of any other Regulated Entities 

or any Affiliated Funds; provided that, 

if any other Regulated Entity or any 

Affiliated Fund, but not the Regulated 

Entity 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; and 

(B) the Adviser agrees to, and does, 

provide periodic reports to the Board of 


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1450 Federal Register / Vol. 87, No. 7 / Tuesday, January 11, 2022 / Notices 

12This exception applies only to Follow-On 

Investments by a Regulated Entity in issuers in 

which that Regulated Entity already holds 

investments. 

the Regulated Entity 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 Regulated Entity or any 

Affiliated Fund or any affiliated person 

of any Regulated Entity or any Affiliated 

Fund receives in connection with the 

right of a Regulated Entity or an 

Affiliated 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 Funds (who 

may each, in turn, share its portion with 

its affiliated persons) and the 

participating Regulated Entities in 

accordance with the amount of each 

party’s investment; and 

(iv) the proposed investment by the 

Regulated Entity will not benefit any 

Adviser, the other Regulated Entities, 

the Affiliated Funds, or any affiliated 

person of any of them (other than the 

parties to the Co-Investment 

Transaction), except (A) to the extent 

permitted by condition 13, (B) to the 

extent permitted by sections 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 Entity 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 Entity, 

on a quarterly basis, a record of all 

investments in Potential Co-Investment 

Transactions made by any other 

Regulated Entity or Affiliated Fund 

during the preceding quarter that fell 

within the Regulated Entity’s thencurrent Objectives and Strategies and 

Board-Established Criteria that were not 

made available to the Regulated Entity, 

and an explanation of why the 

investment opportunities were not 

offered to the Regulated Entity. All 

information presented to the Board 

pursuant to this condition will be kept 

for the life of the Regulated Entity 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 8,12

a Regulated Entity will not invest in 

reliance on the Order in any issuer in 

which another Regulated Entity, 

Affiliated Fund, or any affiliated person 

of another Regulated Entity or Affiliated 

Fund is an existing investor. The 

applicable Adviser will maintain books 

and records that demonstrate 

compliance with this condition for such 

Regulated Entity. 

6. A Regulated Entity 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 

Entity and Affiliated Fund. The grant to 

another Regulated Entity or an Affiliated 

Fund, but not the Regulated Entity, 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 Regulated Entity or 

Affiliated Fund elects to sell, exchange 

or otherwise dispose of an interest in a 

security that was acquired in a CoInvestment Transaction, the applicable 

Advisers will: 

(i) Notify each Regulated Entity 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 Entity 

in the disposition. 

(b) Each Regulated Entity 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 Regulated Entities and 

Affiliated Funds. 

(c) A Regulated Entity may participate 

in such disposition without obtaining 

prior approval of the Required Majority 

if: (i) The proposed participation of each 

Regulated Entity and each Affiliated 

Fund in such disposition is 

proportionate to its outstanding 

investments in the issuer immediately 

preceding the disposition; (ii) the Board 

of the Regulated Entity has approved as 

being in the best interests of the 

Regulated Entity 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 Entity 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 such Regulated 

Entity’s participation to such Regulated 

Entity’s Eligible Trustees, and such 

Regulated Entity will participate in such 

disposition solely to the extent that a 

Required Majority determines that it is 

in such Regulated Entity’s best interests. 

(d) Each Regulated Entity and each 

Affiliated Fund will bear its own 

expenses in connection with any such 

disposition. 

8. (a) If a Regulated Entity or an 

Affiliated 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 Entity that 

participated in the Co-Investment 

Transaction of the proposed transaction 

at the earliest practical time; and 

(ii) formulate a recommendation as to 

the proposed participation, including 

the amount of the proposed Follow-On 

Investment, by each Regulated Entity. 

(b) A Regulated Entity may participate 

in such Follow-On Investment without 

obtaining prior approval of the Required 

Majority if: (i) The proposed 

participation of each Regulated Entity 

and each Affiliated Fund 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 Entity has approved as being 

in the best interests of the Regulated 

Entity 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 

Entity’s participation to the Eligible 

Trustees, and the Regulated Entity will 

participate in such Follow-On 

Investment solely to the extent that a 

Required Majority determines that it is 

in the Regulated Entity’s best interests. 

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

Investment: 

(i) The amount of a Follow-On 

Investment is not based on the 

Regulated Entities’ and the Affiliated 

Funds’ outstanding investments 

immediately preceding the Follow-On 

Investment; and 

(ii) the aggregate amount 

recommended by the applicable 

Advisers to be invested by each 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 7 / Tuesday, January 11, 2022 / Notices 1451 

13Applicants are not requesting and the staff of 

the Commission is not providing any relief for 

transaction fees received in connection with any 

Co-Investment Transaction. 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Regulated Entity in the Follow-On 

Investment, together with the amount 

proposed to be invested by the 

participating Affiliated Funds in the 

same transaction, exceeds the amount of 

the opportunity; then the amount 

invested by each such party will be 

allocated among them pro rata based on 

each party’s capital available for 

investment in the asset class being 

allocated, 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 Independent Trustees of each 

Regulated Entity will be provided 

quarterly for review all information 

concerning Potential Co-Investment 

Transactions that fell within the 

Regulated Entity’s then-current 

Objectives and Strategies and BoardEstablished Criteria, including 

investments in Potential Co-Investment 

Transactions made by other Regulated 

Entities and Affiliated Funds, that the 

Regulated Entity considered but 

declined to participate in, and 

concerning Co-Investment Transactions 

in which the Regulated Entity 

participated, so that the Independent 

Trustees may determine whether all 

Potential Co-Investment Transactions 

and Co-Investment Transactions during 

the preceding quarter, including those 

Potential Co-Investment Transactions 

which the Regulated Entity considered 

but declined to participate in, comply 

with the conditions of the Order. In 

addition, the Independent Trustees will 

consider at least annually (a) the 

continued appropriateness for the 

Regulated Entity of participating in new 

and existing Co-Investment 

Transactions and (b) the continued 

appropriateness of any BoardEstablished Criteria. 

10. Each Regulated Entity will 

maintain the records required by section 

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

Regulated Entities were a BDC and each 

of the investments permitted under 

these conditions were approved by the 

Required Majority under section 57(f). 

11. No Independent Trustee of a 

Regulated Entity will also be a director, 

general partner, managing member or 

principal, or otherwise be an ‘‘affiliated 

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

Affiliated Fund. 

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 Securities 

Act) will, to the extent not payable by 

the Advisers under their respective 

investment advisory agreements with 

the Regulated Entities and the Affiliated 

Funds, be shared by the Affiliated 

Funds and the Regulated Entities 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 13 (including 

break-up or commitment fees but 

excluding brokerage or underwriting 

compensation permitted by section 

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

received in connection with a CoInvestment Transaction will be 

distributed to the participating 

Regulated Entities and Affiliated Funds 

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 Entities and Affiliated Funds 

based on the amounts they invest in 

such Co-Investment Transaction. None 

of the Advisers, the Affiliated Funds, 

the other Regulated Entities or any 

affiliated person of the Regulated 

Entities or Affiliated Funds 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 Entities and Affiliated 

Funds, the pro rata transaction fees 

described above and fees or other 

compensation described in condition 

2(c)(iii)(C), (b) brokerage or 

underwriting compensation permitted 

by section 17(e) or 57(k) of the Act or 

(c) in the case of an Adviser, investment 

advisory fees paid in accordance with 

the investment advisory agreement 

between the Adviser and the Regulated 

Entity or Affiliated Fund). 

14. If the Holders own in the aggregate 

more than 25 percent of the Shares of 

a Regulated Entity, then the Holders 

will vote such Shares in the same 

percentages as the Regulated Entity’s 

other shareholders (not including the 

Holders) 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. 

15. Each Regulated Entity’s chief 

compliance officer, as defined in rule 

38a–1(a)(4), will prepare an annual 

report for its Board each year that 

evaluates (and documents the basis of 

that evaluation) the Regulated Entity’s 

compliance with the terms and 

conditions of the application and the 

procedures established to achieve such 

compliance. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00244 Filed 1–10–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93900; File No. SR– 

NYSEARCA–2021–104] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Equities Fees and Charges With 

Respect to a Regulatory Fee Related to 

the Central Registration Depository 

January 5, 2022. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

22, 2021, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Arca Equities Fees and Charges 

(the ‘‘Fee Schedule’’) with respect to a 

regulatory fee related to the Central 

Registration Depository (‘‘CRD system’’), 

which is collected by the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’). The Exchange proposes to 

implement the fee change on January 2, 

2022. The proposed rule change is 


khammond on DSKJM1Z7X2PROD with NOTICES