34724 Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices 

and alternate payees) in connection 

with benefit entitlement or amounts. A 

small number of appeals are filed by 

companies in connection with other 

matters, such as plan coverage under 

section 4021 of ERISA or liability under 

sections 4062(b)(1), 4063, or 4064. For 

appeals of benefit determinations, PBGC 

has optional forms for filing appeals 

(Form 724) and requests for extensions 

of time to appeal (Form 723). PBGC 

needs the required information to 

resolve matters raised in appeals of 

PBGC’s initial determinations. 

PBGC is proposing some minor 

editorial and formatting changes to 

Forms 723 and 724. In addition, it is 

proposing to make the forms fillable 

online. These are intended to make the 

forms easier for appellants to complete. 

The collection of information under 

the regulation has been approved under 

OMB control number 1212–0061 

(expires July 31, 2022). On March 30, 

2022, PBGC published in the Federal 

Register (at 87 FR 18402) a notice 

informing the public of its intent to 

request an extension of this collection of 

information, as modified. No comments 

were received. PBGC is requesting that 

OMB extend approval of the collection, 

with modifications, for three years. An 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless it 

displays a currently valid OMB control 

number. 

PBGC estimates that each year there 

will be 300 appeals and 75 requests for 

extensions filed annually under this 

regulation. The total estimated annual 

burden of the collection of information 

is 293 hours and $37,400. 

Issued in Washington, DC. 

Stephanie Cibinic, 

Deputy Assistant General Counsel for 

Regulatory Affairs, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2022–12221 Filed 6–6–22; 8:45 am] 

BILLING CODE 7709–02–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. IC– 

34605; 811–21869] 

NexPoint Diversified Real Estate Trust 

June 1, 2022. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for 

deregistration under Section 8(f) of the 

Investment Company Act of 1940 (the 

‘‘Act’’). 

SUMMARY OF APPLICATION: NexPoint 

Diversified Real Estate Trust requests an 

order declaring that it has ceased to be 

an investment company. 

APPLICANT: NexPoint Diversified Real 

Estate Trust (‘‘Applicant’’). 

FILING DATES: The application was filed 

on March 31, 2021 and was amended on 

September 13, 2021, November 5, 2021, 

December 2, 2021 and May 19, 2022. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the request will be 

issued unless the Commission orders a 

hearing. Interested persons may request 

a hearing by emailing the Commission’s 

Secretary at Secretarys-Office@sec.gov 

and serving Applicant with a copy of 

the request by email, if an email address 

is listed for Applicant below, or 

personally or by mail, if a physical 

address is listed for Applicant below. 

Hearing requests should be received by 

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

27, 2022 and should be accompanied by 

proof of service on Applicant, 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 to the Commission’s Secretary 

at Secretarys-Office@sec.gov. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

Stephanie Vitiello, NexPoint Diversified 

Real Estate Trust, 300 Crescent Court, 

Suite 700, Dallas, TX 75201, info@

nexpoint.com; Thomas A. DeCapo and 

Kenneth E. Burdon, Skadden, Arps, 

Slate, Meagher & Flom LLP, 500 

Boylston Street, Boston, MA 02116; and 

R. Charles Miller, K&L Gates, LLP, 1601 

K Street NW, Washington, DC 20006. 

FOR FURTHER INFORMATION CONTACT: Kyle 

R. Ahlgren, Acting Branch Chief; Marc 

Mehrespand, 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. 

Applicant’s Representations 

1. Applicant is a Delaware statutory 

trust and is a non-diversified, closedend management investment company 

registered under the Act. Prior to 

Applicant’s Special Meeting of 

Shareholders held on August 28, 2020 

(the ‘‘Special Meeting’’), Applicant was 

named ‘‘NexPoint Strategic 

Opportunities Fund’’ and it sought to 

achieve the primary investment 

objectives of providing its common 

shareholders both current income and 

capital appreciation by investing in 

structured products, equities, other 

investment companies, real estate 

investment trusts (‘‘REITs’’), and a 

variety of loans and other debt 

obligations. 

2. At the Special Meeting, Applicant’s 

shareholders approved a proposal (the 

‘‘Business Change Proposal’’) to change 

Applicant’s business from a registered 

investment company to a diversified 

REIT that focuses primarily on investing 

in various commercial real estate 

property types and across the capital 

structure, including but not limited to: 

equity, mortgage debt, mezzanine debt 

and preferred equity. Notably, the proxy 

statement in connection with the 

Business Change Proposal stated that, if 

approved, Applicant would realign its 

portfolio so that it will not be 

considered an investment company 

under the Act and apply to the 

Commission for an order declaring that 

Applicant has ceased to be an 

investment company. Applicant 

represents that, in accordance with the 

Business Change Proposal, it began 

operating during its 2021 taxable year so 

that it may qualify for taxation as a REIT 

for federal tax purposes. 

3. Applicant states that, following the 

Special Meeting, it began to implement 

the Business Change Proposal, 

including changing its name to 

‘‘NexPoint Diversified Real Estate 

Trust’’ (effective November 8, 2021), 

reorganizing, winding down or 

divesting its legacy portfolio assets and 

realigning its portfolio such that it is no 

longer an investment company under 

the Act. Applicant states that it holds 

itself out as a diversified REIT, and that 

its periodic reports to shareholders, 

press releases and website indicate that 

Applicant is implementing the Business 

Change Proposal. 

4. Applicant’s investment advisory 

agreement (‘‘IAA’’) with its investment 

adviser, NexPoint Advisors, L.P. (the 

‘‘Adviser’’), remains in effect. Applicant 

anticipates that if Applicant receives the 

order, the Adviser would continue to 

provide the day-to-day management of 

Applicant’s operations pursuant to the 

IAA, except that the terms of the IAA 

would likely be amended to remove 

certain provisions required by the Act 

and to otherwise conform the IAA to 

terms more customary for publicly 

traded REITs. Applicant represents that 

its officers devote significant time to 


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Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices 34725 

1Applicant represents that as of May 18, 2022, for 

purposes of Section 3(a)(1)(C) of the Act: (1) 

approximately 76% of NREO’s total assets consisted 

of fee interests in real property and its interest in 

a majority-owned subsidiary (as defined in Section 

2(a)(24) of the Act) that is not an investment 

company and is not relying on Section 3(c)(1) or 

3(c)(7) (the ‘‘NREO Subsidiary’’); and (2) 

approximately 92.6% of the NREO Subsidiary’s 

total assets consisted of interests in four majorityowned subsidiaries (as defined in Section 2(a)(24) 

of the Act) that are not investment companies and 

are not relying on Section 3(c)(1) or 3(c)(7) (such 

subsidiaries of the NREO Subsidiary, ‘‘NREO REIT 

Sub I’’, ‘‘NREO REIT Sub II’’, ‘‘NREO REIT Sub III’’ 

and ‘‘NREO REIT Sub IV’’). Applicant further 

represents that NREO REIT Sub I is excluded from 

the definition of ‘‘investment company’’ by Section 

3(c)(5)(C) of the Act, and that none of NREO REIT 

Sub II, NREO REIT Sub III, or NREO REIT Sub IV 

is an investment company within the meaning of 

Section 3(a) of the Act or is relying on Section 

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

2Applicant represents that Applicant owns 100% 

of the voting securities of NREC and NREO and 

Continued 

Applicant’s new business strategy, 

including in connection with the 

formation of business objectives, plans 

and strategies and sourcing of real estate 

investment opportunities. 

5. Applicant represents that it 

currently operates as a diversified REIT 

and originates commercial mortgage 

loans and otherwise invests in 

commercial real estate through two 

wholly-owned private REIT 

subsidiaries, NexPoint Real Estate 

Opportunities, LLC (‘‘NREO’’) and 

NexPoint Real Estate Capital LLC 

(‘‘NREC’’), and a majority-owned private 

REIT subsidiary, NexPoint Storage 

Partners, Inc. (‘‘NSP’’ and, together with 

NREO and NREC, the ‘‘Subsidiaries’’). 

Applicant represents that none of the 

Subsidiaries is an ‘‘investment 

company’’ within the meaning of 

Section 3(a) of the Act, and none of the 

Subsidiaries is relying on the exclusion 

from the definition of ‘‘investment 

company’’ in Sections 3(c)(1) or 3(c)(7) 

of the Act. 

6. Applicant represents that, as of 

May 18, 2022: (1) Approximately 16% 

of Applicant’s total assets were 

comprised of ‘‘investment securities’’ 

for purposes of Sections 3(a)(1)(C) and 

3(a)(2) of the Act (‘‘Investment 

Securities’’); and (2) approximately 

24%, 17%, and 10% of the total assets 

of NREO,1 NREC, and NSP, respectively, 

were comprised of Investment 

Securities. Applicant represents that it 

may establish other wholly-owned 

subsidiaries to carry out specific 

activities, consistent with Applicant’s 

business of operating as a diversified 

REIT. 

7. Applicant represents that for the 

period from May 30, 2021 through May 

1, 2022 (the ‘‘Transition Period’’), it 

derived approximately 86% of its net 

income after taxes from investment 

securities (as defined in Section 3(a)(2) 

of the Act). Applicant notes that this 

high percentage of investment-related 

income during the Transition Period 

was due to Applicant’s activity in 

realigning its portfolio to become a 

diversified REIT, the continued holding 

of legacy collateralized loan obligation 

(‘‘CLO’’) positions while awaiting a 

material realization event for the 

principal asset underlying these CLOs, 

Metro-Goldwyn-Mayer Studios Inc. 

(‘‘MGM’’), and the receipt of the 

proceeds from the acquisition of MGM 

by Amazon.com, Inc., which closed on 

March 17, 2022 (the ‘‘MGM 

Transaction’’). Applicant represents that 

now that the MGM Transaction has 

closed, neither Applicant nor the legacy 

CLOs maintain any positons that upon 

disposition are expected to result— 

individually or in aggregate—in the 

generation of income from investment 

securities that would be material to 

Applicant. Applicant further represents 

that for the period from May 2, 2022 

through December 31, 2022, on a pro 

forma basis, Applicant expects to derive 

approximately 5% of its net income 

after taxes from investment securities. 

Finally, Applicant represents that it 

does not expect to derive any material 

portion of its net income after taxes 

from investment securities, and that it 

does not expect any of its subsidiaries 

(including the Subsidiaries and any 

future subsidiaries) to derive a material 

portion of its net income after taxes 

from investment securities. 

8. Applicant represents that upon 

deregistering as an investment company 

it will issue a press release to 

shareholders indicating that it is no 

longer a registered investment company 

and will cease indicating in its financial 

statements that it is a registered 

investment company. 

9. Applicant states that it is not 

currently a party to any litigation or 

administrative proceeding and has 

timely complied with its obligations to 

file annual and other reports with the 

Commission. 

10. Applicant represents that, if the 

requested order is granted, it expects 

that its common shares will continue to 

be traded on The New York Stock 

Exchange. 

Applicant’s Legal Analysis 

1. Section 8(f) of the Act provides that 

whenever the Commission, upon 

application or its own motion, finds that 

a registered investment company has 

ceased to be an investment company, 

the Commission shall so declare by 

order and upon the taking effect of such 

order, the registration of such company 

shall cease to be in effect. 

2. Section 3(a)(1)(A) of the Act defines 

an ‘‘investment company’’ as any issuer 

which ‘‘is or holds itself out as being 

engaged primarily, or proposes to 

engage primarily, in the business of 

investing, reinvesting, or trading in 

securities.’’ Section 3(a)(1)(B) of the Act 

defines an ‘‘investment company’’ as 

any issuer which ‘‘is engaged or 

proposes to engage in the business of 

issuing face-amount certificates of the 

installment type, or has been engaged in 

such business and has any such 

certificate outstanding.’’ 

3. Section 3(a)(1)(C) of the Act defines 

an ‘‘investment company’’ as any issuer 

which ‘‘is engaged or proposes to engage 

in the business of investing, reinvesting, 

owning, holding, or trading in 

securities, and owns or proposes to 

acquire investment securities having a 

value exceeding 40 per centum of the 

value of such issuer’s total assets 

(exclusive of Government securities and 

cash items) on an unconsolidated 

basis.’’ Section 3(a)(2) of the Act defines 

‘‘investment securities’’ as ‘‘all 

securities except (A) Government 

securities, (B) securities issued by 

employees’ securities companies, and 

(C) securities issued by majority-owned 

subsidiaries of the owner which (i) are 

not investment companies, and (ii) are 

not relying on the exception from the 

definition of investment company in 

paragraph (1) or (7) of subsection (c).’’ 

4. Applicant states that it is no longer 

an investment company as defined in 

Section 3(a)(1)(A), 3(a)(1)(B) or Section 

3(a)(1)(C). With regard to Section 

3(a)(1)(A), Applicant represents that it 

now operates as a diversified REIT, and 

argues that its historical development, 

its public representations, the activities 

of its directors and officers, the nature 

of its present assets and the sources of 

its present income support this 

assertion. 

5. With regard to Section 3(a)(1)(B), 

Applicant represents that it is not 

engaged, and does not propose to 

engage, in the business of issuing faceamount certificates of the installment 

type, has not been engaged in such 

business and does not have any such 

certificate outstanding. 

6. With regard to Section 3(a)(1)(C), 

Applicant represents that Investment 

Securities comprise less than 40% of the 

value of Applicant’s total assets because 

Applicant’s interests in the Subsidiaries 

(which, as discussed above, Applicant 

represents are not themselves 

investment companies and do not rely 

on Section 3(c)(1) or 3(c)(7) of the Act) 

in aggregate exceed 60% of the value of 

Applicant’s total assets.2


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34726 Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices 

53% of the voting securities of NSP. Applicant 

further represents that, to ensure that the value of 

Investment Securities owned by Applicant is less 

than 40% of its total assets, Applicant will own at 

least 50% of the voting securities of any 

subsidiaries that it may form that are not 

themselves investment companies and are not 

relying on the exclusion from the definition of 

investment company set forth in Section 3(c)(1) or 

Section 3(c)(7) of the Act. 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(4). 

5Capitalized terms not defined herein are defined 

in the Rules, By-Laws and Organization Certificate 

of DTC (the ‘‘Rules’’), available at www.dtcc.com/ 

∼/media/Files/Downloads/legal/rules/dtc_rules.pdf. 

6Available at http://www.dtcc.com/∼/media/ 

Files/Downloads/legal/fee-guides/ 

dtcfeeguide.pdf?la=en. 

7See Policy Statement, supra note 5. 

8See Rule 2, Section 1, supra note 5. 

9See Rule 2, Section 3, supra note 5. 

10See Fee Guide, supra note 6, at 16. 

11 Id. 

12See Rule 3 (setting forth qualifications for 

eligibility for Participants) and Section 3 of Rule 2 

(setting forth Persons/entity types that may become 

Pledgees), supra note 5. 

13See Rule 2, supra note 5. 

14See Rule 2 and the Policy Statement, supra 

note 5 (setting forth Required Documentation and 

other requirements that an Applicant must satisfy 

prior to DTC’s approval of the Applicant’s 

Application). 

15See Fee Guide, supra note 6, at 16. 

16See Securities Exchange Act Release No. 83544 

(June 28, 2018), 83 FR 31223 (July 3, 2018) (SR– 

DTC–2018–002). 

17The Portal is a closed website that allows 

Applicants to retrieve the Application forms and 

templates for the Required Documentation, and to 

submit their completed Application materials, 

including Required Documentation, to DTC. 

18See Fee Guide, supra note 6, at 16. 

19See Policy Statement, supra note 5. 

7. Applicant states that it is thus 

qualified for an order of the Commission 

pursuant to Section 8(f) of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12165 Filed 6–6–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95017; File No. SR–DTC– 

2022–005] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Eliminate 

Certain Fees Charged to Applicants 

June 1, 2022. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 24, 

2022, The Depository Trust Company 

(‘‘DTC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II and III below, which Items 

have been prepared by the clearing 

agency. DTC filed the proposed rule 

change pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(4) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change 5 consists of 

modifications to the (i) DTC Fee Guide 

(‘‘Fee Guide’’) 6 and (ii) Policy 

Statement on the Admission of 

Participants and Pledgees (‘‘Policy 

Statement’’),7 to eliminate certain fees 

charged to legal entities that formally 

make an application (‘‘Application’’) to 

DTC to become either a Participant 8

(each, a ‘‘Participant Applicant’’) or a 

Pledgee 9 (each, a ‘‘Pledgee Applicant’’) 

of DTC (Participant Applicants and 

Pledgee Applicants, referred to 

collectively as ‘‘Applicants’’). 

More specifically, the Fee Guide will 

be amended to remove a charge to (A) 

each Participant Applicant of $5,000 in 

connection with its Application to 

become a Participant 10 (‘‘Participant 

Application Fee’’), and (B) each Pledgee 

Applicant of $2,500 in connection with 

its Application to become a Pledgee 11

(‘‘Pledgee Application Fee’’) (Participant 

Application Fee and Pledgee 

Application Fee, collectively referred to 

as ‘‘Application Fees’’). The Policy 

Statement will be amended to remove 

text relating to the Application Fees. 

These proposed changes are described 

in greater detail below. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change consists of 

modifications to the Fee Guide and 

Policy Statement to eliminate certain 

fees charged to Applicants. More 

specifically, the Fee Guide will be 

amended to remove the Application 

Fees. The Policy Statement will be 

amended to remove text relating to the 

Application Fees. These proposed 

changes are described in greater detail 

below. 

Background 

DTC may approve an Applicant that 

is eligible for admission as a Participant 

or Pledgee 12 only upon a determination 

by DTC that the Applicant meets 

reasonable standards of financial 

condition, operational capability and 

character at the time of its Application 

and on an ongoing basis thereafter.13 To 

facilitate DTC’s review of an 

Application so that DTC may determine 

whether the Applicant satisfies these 

standards, the Applicant must satisfy 

DTC’s Application requirements in form 

and substance satisfactory to DTC, 

including, but not limited to, required 

documentation (‘‘Required 

Documentation’’), in accordance with 

the Rules.14

DTC charges each Applicant the 

applicable Application Fee as 

established by the Fee Guide.15 The 

Application Fees were implemented to 

help offset expenses associated with the 

review of Applications.16 Payment of 

the full amount of the Application Fee 

is due as of the date DTC provides the 

Applicant with access to DTC’s online 

Application portal (‘‘Portal’’) 17 and 

related payment instructions.18 An 

Application Fee is non-refundable 19

regardless of the outcome of the 

respective Application (i.e., approval, 

disapproval or expiration). 

DTC’s clearing agency affiliates, 

National Securities Clearing Corporation 

(‘‘NSCC’’) and Fixed Income Clearing 

Corporation (‘‘FICC’’), follow similar 

membership application processes and 

require similar documentation from 

their respective applicants as described 

above for DTC. However, despite 

following similar membership 

application processes, DTC charges 

Application Fees, while NSCC and FICC 

do not. DTC believes harmonizing its 

practice with its affiliates’ practices 

would reduce inconsistency between 

the respective application processes and 

provide enhanced consistency relating 

to requirements for applicants, in 

particular where an entity applies to 


jspears on DSK121TN23PROD with NOTICES1